Cut price to sell...too hard a concept?

edited November 2007 in Seattle Real Estate
"......Even markets that were considered relatively stable are bloated with unsold homes.

'People were telling me Boston and Seattle were OK,' said Morgan, who recently visited both cities. 'I've got news for those folks. They aren't OK.'.........."


http://www.bloomberg.com/apps/news?pid= ... refer=home

Comments

  • I disagree that selling is all about price. I'd say that well over half of buyers will not consider a house that hasn't been staged even if the price is 25% below the competition. Just watch HGTV to see all the houses that don't sell in months sell soon after getting a $2K update.

    Sure any house will sell for $1, but the hard part for sellers is finding a fair market price. The same buyers who will nix a house due to lack of staging or a hair in the sink are the ones who will not consider any house that's not "new on market", even if its price has dropped to 75% of the price of comparables. So lowering the price doesn't always work to find a fair market price. Sometimes it's better that the sellers take the house off the market and relist it later for a lower price, so they don't have to sell the house for far below the fair market price.

    And of course the bubble itself shows that selling is not all about price.
  • Markor wrote:
    Just watch HGTV to see all the houses that don't sell in months sell soon after getting a $2K update.

    Any credibility you might have had is now lost. Next you're going to tell us that people are still making money flipping houses because you saw it on "Flip this House" and that none of the "Real Housewives of Orange County" had boob jobs.
  • edited November 2007
    Your rudeness smells like bitterness. I'm just posting an observation that you are free to take with a grain of salt.
  • Markor wrote:
    And of course the bubble itself shows that selling is not all about price.

    That's a peculiar assertion. Would you care to expand on how ultra low interest rates, mystical refi's, and the promise of ever increasing prices played no roll in the housing bubble?

    But thinking it through...

    Perhaps the invention of granite countertops and sub-zero freezers in 2001 causes a whirlwind of buying activity as people who previously had no interest in home ownership (and therefore must have been geeks living in their parent's basement) ran out, got married, found high paying tech jobs, moved to Seattle, and bought homes.
  • By "the bubble itself shows that selling is not all about price" I'm pointing out that the bubble was created by people paying more than fair market values. As long as buyers are paying something other than the fair market value, selling is not all about price.
  • Then, you have to acknowledge it's about no money down, ARM's, and double digit equity appreciation, which drives up the price.

    Otherwise no one could "afford", it at current prices.
  • Sure. Lots of things can conspire to make house prices different than fair market prices. A can of paint can increase the price a buyer will pay by a hundred times the cost of the paint.
  • Markor wrote:
    I disagree that selling is all about price. I'd say that well over half of buyers will not consider a house that hasn't been staged even if the price is 25% below the competition.

    If it is true that "over half of buyers" will not consider a 25% savings just because of a lack of something as superficial as staging, then this society is in more trouble than I thought!

    Markor - you wouldn't happen to do staging as part of your livlihood, would you?
  • I believe the point was that people are (were), paying above fair market primarily due to the too easy credit and no upfront costs, not because of the effects of staging.

    You cannot put lipstick on a pig and expect it to fly. You cannot fool all of the people all of the time. It's only the some of the people, that many mistake for all of them now. The question is, how is that working for ya?
  • TJ_98370 wrote:
    Markor - you wouldn't happen to do staging as part of your livlihood, would you?
    The opposite. I wouldn't stage as a seller. I figure if the buyer needs that, then they'll be picky about everything else, like the inspection.
  • Welcome to Bizarro Land!
    Markor wrote:
    I'd say that well over half of buyers will not consider a house that hasn't been staged even if the price is 25% below the competition.
    Markor wrote:
    The opposite. I wouldn't stage as a seller. I figure if the buyer needs that, then they'll be picky about everything else, like the inspection.


    Note, '=>' means 'implies' in logic and '^' means 'AND' in logic.

    1) axioms of economics
    a) Rational Buyer => Buys At Lowest Cost.
    b) Rational Seller => Sells At Highest Price.

    2) common sense
    a) Rational Buyer => Examines Purchase For [Damage|Fraud|Errors]

    3) Markor Statements
    a) Staging a House => 25% Higher Sales Price
    b) Staging a House => Picky buyers => Request an Inspection.

    3a implies that a rational seller will stage a house. But 3b implies that will attract buyers who want inspections. Which 2a defines as rational buyers, which are the kinds of buyers who purchase at a lower price.

    Sorry Markor, but you've got a contradiction.
  • Posts that try to show logic problems are the most boring ones.

    No logical contradiction in my statements. I didn't say that I think buyers will pay more for a staged home. Your #3a is not my statement. Staging can help a seller, but I don't think the cost is worth it.

    Take an extreme example. Suppose the seller pukes on the kitchen floor just before an open house. Should the seller leave the puke or clean it up? A rational buyer should be delighted to see the puke because it could mean a significant price reduction and keep other buyers away. What percentage of buyers will leave in disgust? I'd guesstimate over 90%. And it's a safe bet that none of the remaining buyers will be delighted. So the seller should clean up the puke. And that makes my point that selling is not all about price. Most buyers are not rational.
  • Markor wrote:
    Posts that try to show logic problems are the most boring ones.

    You're quite right. I'll avoid anything logical in the future. Hurrah!
  • Markor wrote:
    Posts that try to show logic problems are the most boring ones.

    You're quite right. I'll avoid anything logical in the future. Hurrah!

    RCC - We must try not to bore or offend Markor in any way.
  • I'd settle for just not being rude.
  • deejayoh wrote:
    RCC - We must try not to bore or offend Markor in any way.

    You should also cut out all those graphs and charts then. Nothing against them, but compared to 'going by the gut' all that work you put in sure has way too much information. :wink:

    Markor wrote:
    I'd settle for just not being rude.

    I'm sorry, but your posts really did conflict with each other. First you exaggerated the extent to which buyers will foolishly throw money at the smallest staging (can of paint or something). Then you claimed that all this free money was not worth pursuing because it might be some work.

    Meanwhile, you pulled numbers out of...I don't know where.
    -Any staging at all will pull in an extra 25%. Really?
    -Over half of all buyers will not consider a house which wasn't staged. Will they consider a stage which isn't enclosed?
    -Houses are not price sensitive. Wha?!?
    -A house on the market 2 months can't sell even with a 75% price drop. Did the tobacco companies do that study??
    -90% of buyers will avoid purchasing houses brimming in puke. Well, I'll give you that one.

    You can't make numbers up, form assertions on them, and then expect everyone to stand around nodding like that bird that drinks water.

    45.jpg
  • I saw this and thought it somehow just fit the direction of this thread...
    A young man named John received a parrot as a gift. The parrot had a bad attitude and an even worse vocabulary. Every word out of the bird's mouth was rude, obnoxious and laced with profanity.

    John tried and tried to change the bird's attitude by consistently saying only polite words, playing soft music, and anything else he could think of to "clean up" the bird's vocabulary.

    But finally John got fed up, and yelled at the parrot. The parrot just yelled back. So John shook the parrot, but the parrot got angrier and ruder. In desperation, John threw up his hands, grabbed the bird and put him in the freezer.

    For a few minutes the parrot squawked and kicked and screamed. Then suddenly there was total quiet.

    Fearing that he'd hurt the parrot, John quickly opened the door to the freezer.

    The parrot calmly stepped out onto John's outstretched arms and said, "I believe I may have offended you with my rude language and actions. I'm sincerely remorseful for my inappropriate transgressions, and I promise to do everything I can to correct my rude and unforgivable behavior."

    John was stunned at the change in the bird's attitude.

    He was about to ask the parrot what had made for such a dramatic change
    in his behavior, when the bird asked, "May I ask what the turkey did?"

    Happy Thanksgiving.
  • First you exaggerated the extent to which buyers will foolishly throw money at the smallest staging (can of paint or something).
    In your opinion.
    Then you claimed that all this free money was not worth pursuing because it might be some work.
    There's no free money. If a house is fairly priced at $x and more than half of buyers will not consider it if it's not staged, it will eventually sell for $x to one of the buyers who doesn't need staging. Staging buys liquidity; it doesn't necessarily bring in a higher price.
    Will they consider a stage which isn't enclosed?
    Huh?
    -Houses are not price sensitive. Wha?!?
    I didn't say that.
    -A house on the market 2 months can't sell even with a 75% price drop. Did the tobacco companies do that study??
    I didn't say that either.
    -90% of buyers will avoid purchasing houses brimming in puke. Well, I'll give you that one.
    See, no evidence needed. Apparently opinions are okay unless you disagree with them.
    You can't make numbers up, form assertions on them, and then expect everyone to stand around nodding like that bird that drinks water.
    I didn't expect you to agree with me.
  • edited November 2007
    Markor wrote:
    Will they consider a stage which isn't enclosed?
    Huh?
    Intentional lunacy on that quote. It wasn't meant to sound sane.
    Markor wrote:
    -Houses are not price sensitive. Wha?!?
    I didn't say that.
    Markor wrote:
    I disagree that selling is all about price.
    Markor wrote:
    -A house on the market 2 months can't sell even with a 75% price drop. Did the tobacco companies do that study??
    I didn't say that either.
    Markor wrote:
    who will not consider any house that's not "new on market", even if its price has dropped to 75% of the price of comparables
  • DJO, that was a humorous story. It kind of reminds me of an episode of The Office.
    Angela: I have this crazy thought, that I know is crazy, that maybe Dwight killed my cat. When I got home, Sprinkles' body was in the freezer where Dwight said he left her, but all my bags of frozen french fries had been clawed to shreds.
  • Intentional lunacy on that quote. It wasn't meant to sound sane.
    OK. The two sets of things you quoted, yours and mine, are not the same. I didn't say what you think I did.

    If selling is not all about price, selling can still be somewhat or even mostly about price.

    If the price has dropped to 75% of the price of comparables, it's a 25% price drop, not a 75% price drop.
  • Markor wrote:
    If the price has dropped to 75% of the price of comparables, it's a 25% price drop, not a 75% price drop.

    Ooops, that one I truly apologize for. I understood you meant a 25% drop (which makes way more sense than 75% anyways), and that's what I meant to type. I think I had just read 75% and typed a '7' instead of a '2' accidentally. I'm sorry I misrepresented what you said.
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