RE sale pricing/strategy

[Susie]

Just want to run this listing scenario by H&G...

Our next door neighbors are going to be selling the same size/style house as us, on a same-size lot as us, basically at the same time as us.  They have a new build that will be complete in June-ish, and we just went into contract on a purchase with closing to occur by 5/26, so neither of us can meaningfully delay.  It's not ideal.  We're also friends, so we're trying to do what we need to do, without actively diminishing each others' opportunities.

In Jan/Feb., our agent saw our house, and said $260-300k was the broad range for listing price, and timeline/season dependent, most likely we'd list in the $280-290k ballpark.  We bought in 2008, also a hot market, for $240k, so I figured $289,900 sounded good.  Zillow (I know, I know, but it tends to be pretty accurate in our market) has been showing values in the $270-289ks the last year.

Our RE market is bananas right now.  Zillow has inflated our value to $301k, I think the first time we've ever been >$300k.  Our neighbors, who previously planned to list at $290k on the advice of their agent, have now decided to list on 4/9 at $320k.  

Comparing our two houses, they're very similar.
- same layout (mirror images)
- both 4 bedroom / 1.5 bath
- both partly finished basement
- both updated bathrooms
- both nice landscaping/yards, 0.25 acre

In our school district, for 4 bedroom homes, the entire market is currently limited to 2 properties:
- $329,900 - 5 beds/2 baths.  Bad layout*, very dated throughout except for the updated baths.  Dark trim, kitchen needs gutting.  Meh curb appeal.  Located on our street, hasn't sold in 2 weeks on market.
- $437,900 - 4 beds/2 baths.  New construction.  0.25 acre.

*By bad, I mean... it's very similar to ours, but has a 5th bedroom over the garage.  So, 5 beds upstairs, 1 bath upstairs, and a 2nd full bath randomly in the family room, nowhere near bedrooms.  It also has a 1st floor laundry room, but it's so small as to be a negative, and the garage is super pinched as well because of it.  I'm stoked about 1st floor laundry in the new house but... they should've just left this in the basement! 

This makes comps a little tough to have confidence in pricing, but our agent is now saying $320-325k for our house, and basically ASAP.

My feeling is that we should wait a week, and list the week of 4/12 - 16, so that 4/17-18 is our first weekend of showings.  That will be a week after our neighbors.  That way we can see how $320k is received, and avoid stepping on their toes.  It also gives us an extra week to prep, and gives my 200+ daffodils in the yard time to get into bloom for better curb appeal.  We could list at $319,900, and let multiple offers carry it higher if it's worth it.

I'm very wary of listing too high, but we're also buying in this market so I want to make that back as much as we can on the sale.  WWYD with this info?

[hbomdiggity]

I think waiting a week makes sense. If neighbors price is legit, you’ll get someone that lost out and knows they need to pony up this time. If neighbors over-shot, they’ll have to come down anyway and that’s the risk they took.

[scm1011]

I agree 100% with hbomdiggity. You may benefit from going on the market 2nd if other offers missed out on your neighbor's house and decide to up their offer to avoid missing out on a nearly identical house. Good luck!

[clairebear]

As a realtor I would absolutely reccomend going second. If things are getting multiple offers within days of listing theirs should be under contract by the time you list. You can definitely test the waters by seeing what happens with his house. And hopefully since they are friendly neighbors they would share what they ultimately accepted! 

[Susie]

Ok, thanks for confirming! This is our first time selling, and it's all happening really fast now that we found our new house.

[expectantsteelerfan]

Susie, if you wouldn't mind, could you update on what your house ends up selling for (because in this market I'm confident it will sell within a week).
We are in such a similar situation...bought our house for $235K, earlier this year I would have put $279,900 as the absolute most we'd list for, but houses with the same floor plan in our neighborhood have been going for $350-$400K (they mostly do have a fully finished basement and ours is only partially finished, and most also have a deck and we don't), and zillow estimates ours at $343K. We're not ready to list yet because we keep losing out on the few houses that come up that we like, and we're back to thinking we're going to build, and if so I am pretty sure by the time our new house is done we will have missed out on this crazy inflated market unfortunately. But like you, I really couldn't imagine listing over $300K, but if we were listing right now, we would.

I think your plan sounds good. Good luck again on closing and getting yours listed and sold!

[Susie]

expectantsteelerfan, sure, happy to share when it happens.

[definitelyO]

can your agent also talk with your neighbor's agent and have interested buyers sent your way in a Pre-MLS type of situation?

[aprilsails]

Yes do list second. In my neighbourhood last summer two similar houses went up the same week. One was clearly better for the price, and it went fast. I’m assuming the owners took the first full price offer that came in. The next week the second, less objectively desirable house went for $30k more because there was a fight by buyers to get the one that was left and they didn’t want to be outbid again. That was quite odd to see and really showed how much demand is driving the market right now.

Similarly when DH and I bought our first house the same model on a corner lot went up right when we were thinking about buying. We remarked that it would be perfect for us but weren’t quite ready to buy. We hadn’t verified financing, etc. When the same house went up one month later down the street we pounced and paid more than the corner lot house. Because we had looked enough to know that was the house we liked best and nothing better suited to our needs for size bad location was likely to come up. I spent 10 years being wistful about that corner lot. It was white with green roof and trim and looked like an Anne of Green Gables house. Lol.

[Susie]

expectantsteelerfan , our neighbor's listing went live yesterday at $319k.  They had a bunch of showings today, and have one offer in hand, another supposedly on the way.  More showings tomorrow with offers likely.  They'll be done and dusted this weekend for sure, it does not seem like listing at $319k was too aggressive.

I will follow up as this develops, lol.  We had our listing photos done yesterday, and our listing is going live next Fri. 4/16 with showings to start Sat. 4/17.

ETA:  They had 2 offers as of this afternoon, $319k and $330k.  They are planning to accept the $330k tonight.  We'll see what our agent recommends, but I'm thinking of also listing at $319k, or maybe $325k.

[dutchgirl678]

That is good news for your neighbors. I am glad you waited to list your house. I would list yours for $325k. I bet it will go quickly as well and maybe even over asking. The market is crazy right now.

We live in a house that was built in 2018 in a brand new neighborhood. The house behind us was bought in 2019 for $608k. They listed last month for $699k. And I talked to the owner yesterday (he is also the selling realtor) and he said they accepted an offer for $730k!

[lessel]

Good luck! When we listed, our buyer had just lost a bidding war on a house a block away from us. So they came in high and didn’t fuss with a lot during inspections, etc. I think you’re in a good spot!

[Susie]

Our listing went live this morning at $324,900. So far we have 12 showings this weekend, with more appointments continuing to trickle in.

ETA:  now 14 showings.

ETA2:  now 18 showings.  

[dutchgirl678]

I'm glad to hear you listed it at $325k (roughly). And that you have so many showings lined up already! I'm sure you will have multiple offers by the end of the weekend. I bet it will go over the listing price.

[hbomdiggity]

Apr 16, 2021 13:13:29 GMT -5 Susie said:

ETA2:  now 18 showings.  

That’s awesome! Do you have plans to leave for the weekend?

[Susie]

Apr 16, 2021 18:23:31 GMT -5 hbomdiggity said:

Apr 16, 2021 13:13:29 GMT -5 Susie said:

ETA2:  now 18 showings.  

That’s awesome! Do you have plans to leave for the weekend?

H took the kids and dog to his parents house.  We figured it would be busy (although not quite this busy!) so that had been the plan all along, because there was no way we could juggle everything with all of them here.  The kids make messes faster than I can clean up, and the little guy still needs naps.  I'm staying here but will just go to the office for both days, and try to pay attention to catching up on work.

[heygrey]

Apr 16, 2021 19:01:52 GMT -5 Susie said:

H took the kids and dog to his parents house.  We figured it would be busy (although not quite this busy!) so that had been the plan all along, because there was no way we could juggle everything with all of them here.  The kids make messes faster than I can clean up, and the little guy still needs naps.  I'm staying here but will just go to the office for both days, and try to pay attention to catching up on work.

Given the market currently, I'm not surprised you have so much interest! I'm sure you will get a great offer at the end of this. Realtors have a general idea of how many showings are booked and buyers know they can't lowball and expect to win. 


Friends of ours sold recently. They are empty nesters with no pets, but they spent the night in their camper in the driveway for the weekend of their showings. Anything to keep the house spotless! 

[Susie]

Update as of 2pm, day 1 of showings.  We originally had 12 showings scheduled for today, 6 for tomorrow.  So far, 2 today have cancelled, 5 have completed, 5 to go: 

-- Edited to update with additions --

     - 9:30am has submitted an offer for $330k, VA loan.  $10k earnest money, no down payment otherwise specified.  Offer good through tomorrow 8pm.  They offered asking price and lost last week at our neighbor's, but have related that they like our house even better.  They sound pretty enthused.

    - 10:30am has also submitted an offer for $330k, conventional funding, $3k earnest money, 10% down.

    - 11:00am ?

    - 12:30pm - not considering an offer.  Feedback received:  "They liked the layout upstairs but felt the kitchen was too small for them. Would like ,ore privacy in the backyard as well. Well maintained and cared for. Shows nicely. Thank you"  --  (Susie note:  fair enough.  Those are two of the reasons we're moving.)

    - 1:00pm - not considering an offer.  "She thought the bedrooms were a little too small for her family. She has kids who need to share. Such a great home though, we can tell they take pride in it. Thank you for the showing!"

    - 2:00pm ?

    - 3:15pm ?

    - 4:15pm ?

    - 4:30pm ?

    - 5:30pm - not considering an offer.  Feedback received:  "They wanted to make it work, but would need to figure out putting in a full bath and laundry on first floor. Such a lovely home!"

--

Anybody have any feedback on how a VA loan will affect the transaction vs. a conventional loan?  

[expectantsteelerfan]

I hope you will consider the VA loan against other loans, and talk to you realtor about it.

We used a VA loan the 1st time we bought (in 2014), and our realtor warned us it might mean that the inspection flags more things, and she pointed out several things in the house she thought the inspection would flag specifically because of the VA loan, things like not having a railing going down the basement steps, some paint chipping off the patio roof, etc. The VA loans are known for being more picky about safety stuff, and that makes sellers often hesitant to accept them. But that was NOT our experience at all. The VA loan didn't require a SINGLE THING on the inspection to be fixed in order for us to buy the house.

The other thing about a VA loan is that it does not require 20% down payment to avoid PMI. We utilized that the 1st time around. This is where you should look specifically at the offer and talk to your realtor.  While someone could certainly be in a position to afford the house even if they don't have 20% down (because that was us!), not having 20% down *might* be an indication that they will have trouble closing financially compared to someone who does.

This time around, we are still considering doing a VA loan, but just because the rate for that loan is lower than a conventional loan. We have more than 20% to put down, but we'd still like the lower interest rate. Our realtor warned us though that in this market, some people might accept an offer of the same price as ours that is a conventional loan over ours because of the hesitancy with VA loans, so we are prepared to pay the higher rate to be more competitive, but it sucks.

So I hope if you get similar offers in terms of price/other terms, you don't discount the VA loan just because it's a VA loan!

[Susie]

expectantsteelerfan , we're not ruling out the VA loan, but my worry is specifically the appraisal.  Houses in our market are selling for more than they are appraising for right now.  The market shot up fast, and too few of the spring 2021 prices have closed for the appraisals to catch up.  We experienced that on our purchase.  The appraisal came back at $435k, just north of asking ($429,900) and south of our contract price ($450k).  We're talking with the lender about comps, etc., but if the appraisal does not nudge up, we're going to need to bring extra cash to the table.  (Seller's concession won't be on the table for unrelated reasons.)  

That sort of issue is easier to bear when you're doing conventional, planning for 20% down, and what you thought would get you to 80% LTV is a tad short, so maybe you stomach PMI for a short while to get the house.  But if you were only prepared to put 5% down or so, then there's just less flexibility to close the sale.

These buyers are offering just over 3% as earnest money, which is a strong start.  I just want to go into this with eyes open.

[origami]

My parents just sold to buyers with a VA loan. Super fast close, no weird issues. They were told they needed a fence in part of the backyard because there was a steep drop-off but (1) the buyers paid, DIYd it and it passed, (2) that may have come up with a different buyer because it was definitely a hazard. Their house needed work like new windows (some leaked) and a new roof, but wasn’t in horrible shape, if that matters.

[tacoflavoredkisses]

We are selling to a VA loan buyer (closing next week). I’m happy to PM with you if you want!

[mrsukyankee]

I came on just to see this post and glad to see you got so many viewings and an offer already!

[Susie]

I updated above... we have gotten a 2nd offer, same price.  Now that I have the luxury of 2 offers in hand, I almost appreciate the kind comments just as much.  Things like room size, yard size, etc... those weren't things we could change anyway.  It makes me feel <3 that the general consensus is so favorable and kind about the things we can and did work hard on.

[ktw]

Apr 17, 2021 19:08:46 GMT -5 Susie said:

I updated above... we have gotten a 2nd offer, same price.  Now that I have the luxury of 2 offers in hand, I almost appreciate the kind comments just as much.  Things like room size, yard size, etc... those weren't things we could change anyway.  It makes me feel <3 that the general consensus is so favorable and kind about the things we can and did work hard on.

I usually consider myself to be pretty pragmatic, so I was honestly taken by surprise by how much I was affected by feedback comments when we were selling (fortunately, they were largely positive). It’s an emotional roller coaster! I’m glad things are going well, so far!

[expectantsteelerfan]

I've never sold a house before, so I didn't realize that the sellers hear the feedback that you tell your realtor when you're viewing a house! I think I'm going to be more tight-lipped about the comments I make when going through a house now! I mean I'll be honest about what we like/don't like, I just won't make as many off-handed comments if they are't necessary.

I hate our house so much, and we haven't put a lot of effort into making it better (though we do have a small list of things we need to do before we list), so even though I normally take criticism to heart and have a hard time letting it roll off me, hopefully I won't care if other people have negative things to say about it when we do list it (as long as it still sells!).

[mccallister84]

Apr 18, 2021 7:11:46 GMT -5 expectantsteelerfan said:

I've never sold a house before, so I didn't realize that the sellers hear the feedback that you tell your realtor when you're viewing a house! I think I'm going to be more tight-lipped about the comments I make when going through a house now! I mean I'll be honest about what we like/don't like, I just won't make as many off-handed comments if they are't necessary.

I hate our house so much, and we haven't put a lot of effort into making it better (though we do have a small list of things we need to do before we list), so even though I normally take criticism to heart and have a hard time letting it roll off me, hopefully I won't care if other people have negative things to say about it when we do list it (as long as it still sells!).

Most (if not all?) realtors use an app for scheduling showings. Then after the showing, the realtor can enter feedback. I would assume most realtors are going to use their professional discretion about what to enter here and only leave feedback that may be helpful. They aren’t going to list every off hand comment you make.

[Susie]

I was tired last night and didn't read all the way through to the addendum page of the 2nd offer, so I didn't appreciate that it contained an escalation clause in it, going up $2k over any other offer up to a ceiling of $350k.  So right now it's effectively a $332k offer.

Our agent recommends that instead of taking an offer tonight, we ask for best & final from everyone, no escalation clauses, by a set time tomorrow.  If that escalation clause buyer really wants the house, they'll pony up more than $330k, and probably more than $332k.  

This makes sense to me... plus we have 9 showings today, almost as many as yesterday.  We may still see another offer.

also, expectantsteelerfan, yes, what mccallister84 said about the app.  We get texts from the app whenever showings are scheduled, so we know when they are happening and what agency the showing agent is from.  It's set up so that for this weekend, while we are cleared out of the house, showing agents can just make appointments between like 9:30am and 6pm, and the texts are just FYIs for us.  Starting tomorrow, if we were continuing to show (which we probably won't), they'd need us to approve the showing time via a link in the text.  Via the same app, showing agents can send feedback to our agent, who forwards the feedback to us.  It's not detailed, probably mostly entered on a phone.  I wouldn't worry too much about your agent saying too much.

[Susie]

Offer #3 is in, $340k.

We've now officially hit the milestone of +$100k from what we paid in 2008!

[bee20]

So glad this is going well for you and you'll have a couple offers to pick from! You have made some really beautiful updates to the house and it's showing well (I saw your pictures in the projects thread).