Yesterday I had the pleasure of showing a house where the owners have done everything right to make it appealing to potential buyers. Great curb appeal — the house had been recently painted, the gardens were popping with blooms (I want to know their secret for big peonies), the lawn was mowed. Inside, the house was spotless. Prior to putting the house on the market, the owners had a pre-sale home inspection (with reports available to potential buyers), fixed repair items and had the septic pumped. They had a nice display of information on a sideboard, including a color handout with photos and house features, a copy of the survey, the home inspection report and utility information.
I wish more sellers would follow their lead. They’re doing everything right. So why isn’t their house selling? (Which, by the way, isn’t a ‘dog’, its an attractive house in a nice setting with considerable second home market appeal.) Price. Their house has been priced around $400,000, in one of those ‘orphan’ categories where we don’t have a lot of buyers. This is a phenomenon I’ve written about a lot before. Buyers cluster around certain price points. The moderate second home buyer is shopping roughly in a range of $275,000 to $325,000, while the upper end buyer here is looking at $500,000+. Buyers aren’t spaced out evenly along a price continuum. Its kind of like looking down at cities in the midwest from a plane at night — there’s a cluster of lights for one city that dribble out into darkness and then grows into another cluster of lights. The problem with many $400,000 houses on the market right now isn’t that they’re not ‘worth it’, in terms of square footage, acreage, etc., but rather that they’re too expensive for the mid-range $300,000 buyer and not fabulous enough for the upper end $500,000+ buyer. (Of course, there are also plenty of $400,000 houses on the market that aren’t even close to being worth it in objective terms, but that’s another story.)
I’m finding the mood among buyers to be interested and motivated — but conservative. A $300,000 buyer might be willing to go to $325,000, or even $350,000 if they found an absolutely fabulous house they fell in love with. But they’re not stretching to $375,000 or $400,000. A year or two ago they might have, but not now. And that’s the conundrum facing the owners of that house with the great peonies who’ve done everything right. At the end of the day, a successful sale depends on having a price that’s as appealing as the peonies.