“You have to believe we are magic.” So said Olivia Newton-John in her 1980 classic hit “Magic.” Currently, I have a client who believes we are (I am) magic, and while I appreciate the vote of confidence, it is clear I have not spent nearly enough time engulfed in the studies of Hogwarts wizardry. I have been unable to make this proverbial rabbit appear out of the hat.
Last week, my 6-year-old nephew prepared a magic show for me to watch. First, he made one of his legs disappear, then he made a string of scarfs that he pulled from his hat turn into different colors. It was quite impressive. For his last trick, he pulled a literal (stuffed animal) rabbit out of his hat. Perhaps I could procure some advice from him.
A couple of months ago, I had a gentleman contact me about listing his house. He currently lives in a different state, so his home here has been used as a rental for the past year. Now he wants to purchase a home in the state he is living in and so he needs to sell this home to do so. The tenants' lease was getting ready to expire, so the timing was right.
I made an appointment with the tenants to tour the home and then I pulled comparisons. With the current condition of the home, as well as age built, number of finished bedrooms and baths, and area, I made a recommendation of price. I sent him my comparisons so he could see where I came up with the recommended price.
After getting all the paperwork signed and coordinating with the renters for showings, my client called me and said he wanted to list it $25,000 over my recommended price. I informed him that I could not support that, and neither could an appraiser, even if someone were willing to pay that. I also reminded him that the home was not in optimal condition. He said that one of the houses on the street had sold for $25,000 over what I recommended, so his should be able to as well, since it is a seller’s market. I reiterated that the home he was comparing to his had a finished basement, and his was zero percent complete, as well as the fact that his home was seven years older than the home he was comparing it to. The comparison had been recently remodeled with wood floors, granite counters and refinished cabinets, and his home had red Kool-Aid stains on the floor, original finishes and vermillion walls, as well as peeling vinyl on the floors. He did not relent.
After two months, and just as many showings, I reached out again to give the usual weekly update and reminder that we needed to reduce price. This time, however, I also let him know that several neighbors had contacted me now about their concern regarding the condition of the home, the yard and the fence. Now that the home is vacant, it is at a much higher risk of vandals as well. As a result, the home is now worth even less than my original recommended price.
A famous magician once explained his magic this way: he thinks of something that seems impossible, then figures out a way to make it possible, and the results are spectacular.
It begs the question; which would be considered the spectacular here? Getting an offer at ask price and having it appraise above value as well, or my client following my advise and reducing price to where it could sell?
Jen Kirchhoefer is an associate broker and Realtor. She can be reached at email@example.com or 801-645-2134.