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Over-improved and over-priced

Posted by Rona Fischman May 31, 2012 01:55 PM

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This entry is for all the agents that are reading. I got his email from an agent I will call “Isabella.” She needs some advice from agents who have worked with difficult clients. She has a seller who is displeased with what would-be buyers expected to pay for their house. They cannot accept that their house is worth less than they thought it was worth.

I think the problem is one of expectations. These sellers did not believe that their agent had an accurate idea of the price. It turns out that the agent had the price too high. This double-blow has soured the relationship.

Agents, how would you turn this around? Would you quit the listing, or hang in with these owners of an over-developed house. How do you explain that neighborhood matters?

Here's the short story: Young couple moved into the home (in my neighborhood) in 2002. In 2009 they decided to remodel the home taking it from a modest 1500 sf to 2400 sf; they did this by adding a second story on the existing ranch. THEN they did everything, and I mean everything right: new hardwoods through-out, central air, Anderson windows, and gorgeous doors, beautiful accessories (light fixtures, etc), gorgeous solid wood cabinets, top-shelf stainless appliances.... Well I could go on and on, but I think you are getting the pictures.

The one thing they did not consider: our neighborhood is a very pleasant cul de sac of 1/2 acre lots with pretty capes and well-kept ranches. This remodel is a center-entrance colonial and hands down the BEST house in the neighborhood. We worked really hard on the price and I had many members of my office go through the house and give me their opinion of value. Reviewed neighborhood sales and used colonials in other neighborhoods for comparison. We came to an agreement on the price (although they wanted $15,000 more) and listed the home. It has been a month and we have been fairly popular and received one "almost" offer and then last week a firm offer.

This offer created havoc with my sellers. They were shocked that it was $25,000 below asking ($475,000) and requested some closing costs and refrigerator, curtains etc. They just cannot get over the fact that they did not get a full price offer! Or an offer within $5,000 to $7,000 of asking. We negotiated but could not come to agreement and every meeting I had with the sellers was very, very tough. I spent hours going over comps, previous sales, and reminding them they had the best house in the neighborhood and the offer reflected neighborhood values.

We were within $17,000 of asking when they shut everything down. I am in a state of shock. We had talked, before listing, about negotiations, about compromise, about a home is worth what a buyer wants to pay for it, etc., etc. AND this is their third home so they are not novices. Of all the sellers I have had (and that’s a lot!), this couple has been impossible. Tough getting in to showing because "they lead such busy lives", tough getting them to return a phone call, tough when they come back during a showing and sit outside the house "waiting".

Can this relationship be saved? Should it be saved?

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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