Selling a House When the Market Stinks

Selling house bad market

07 Jun Selling a House When the Market Stinks


Buy this house today!

Sell this house!

Ok, I have to admit. To say the market in our area stinks is putting it lightly. I really don’t think it stinks. I think it flat out sucks. So when we made the decision to move to Iowa, we knew we weren’t exactly going to have a smooth transition. We knew selling a house in a bad market would not be easy.

But we didn’t fully know what we were in for either. The true value of real estate is whatever someone is willing to pay for it. It doesn’t matter how much you paid for the property or how much money you put into remodeling or fixing things. If a buyer isn’t willing to pay your asking price, the house isn’t worth the asking price.

In our area, the market is down about 30% from the high price levels of 2007-2008. We bought our house in 2005, so we knew we stood to lose 25-30%. That sounds like a lot but it really doesn’t hit home until you look at the actual dollar amount. So when we sat down with the realtor and started talking about a price $30,000 lower than what we paid, it wasn’t a good feeling at all!

Especially since we had listed the house the previous year for $15k more. We knew it was a slow market then but we were just putting out the feelers to see what would happen. Aaaaannnnd, nothing happened. No surprise there.

A new year for selling

But this year we are motivated. I already accepted the new position in Iowa. We need to get the house sold and find a new one before the summer ends so we can get the kids registered for school. And, as I mentioned in my last post, The New Journey Begins, we want to avoid signing a 1-year lease in a small apartment where we would all eventually go crazy.

So we priced to sell. No biggie. We’ll lose a chunk of money but we’ll find a bargain on the other end so it’s all good, right? Well, it just so happens that the housing market in the Ames, IA area hasn’t been hit as hard as other areas of the country. So the bargains aren’t there. Oh well. We still need to sell so we can buy the next house. So on with the massive losses!

Anyway, this should be a quick sale. We priced the house competitively. We did a spring cleaning on steroids. We hired a professional window cleaner. We de-cluttered. We convinced the kids to sell a bunch of their toys as long as they got to keep the money. Deal. We needed to get rid of our junk! Nobody wants to buy a cluttered house. It makes the house look smaller. We needed to stage it so it looked like someone lives there but doesn’t live there.

Last year we put new kitchen flooring in and painted some dark walls with a lighter color. We also had the exterior trim professionally painted. I am so glad we had that done. It wasn’t too expensive, and it was done right so I knew the paint wasn’t going to peel off in another year. Plus, it looks much nicer. Much more presentable to the buyer.

Timeline to Sold!

Week 1: We showed the house three times. This is going to be easy! We had lots of good comments from the lookers but none were ready to buy. Most of them said the kitchen was a little small. Not something we can control, so we’ll just wait.

Week 2: One showing. Not exactly improving, but still not bad in a slow market. We’re just excited people are interested in the house.

Week 3: No showings. Uhhh, what’s up with that? Well, it’s still ok. We have plenty of time here. Still, it’s a little unsettling.

Week 4: Two showings. That’s a little better. They’re still saying the house is a little small, especially the kitchen. That darn kitchen. Oh, well, the right buyer will show up at the right time.

Week 5: No showings. Ok, it’s getting a little old to clean the house every day just in case someone wants to look at the house that day. Especially when nobody wants to look at the house every day.

Week 6: Nothing. Ugghh!!

Week 7: Two showings! Yay! One actually liked the house. But, then they found a different one they liked.

Week 8: We decided to lower the price to stimulate activity. $5,000 less. It worked! We got another showing. This one looks really good. He really likes the house. Only one catch. He’s not pre-approved for a loan. If he was pre-approved, he would have been ready to make an offer that day. So, we wait a few days. Finally, our realtor calls with the big news! And, the let down ensues: it’s a no-go. What’s up with that?? Why is he even looking at houses if he’s not pre-approved? What a waste of time and emotional energy.

Week 9: The waiting begins again…

That pretty well catches us up, give or take a week. I think I’m going to do a quick post each week summing up the week’s activity.

So it’s been frustrating. The house is ready to sell, but the buyers have been either looking for something bigger or they weren’t financially ready to buy. Which is a shame, because the house is a really good value. A good house at a low price. It seems what we have is considered a starter home by today’s standards, even though it’s been more than adequate as a family home for more than 30 years.

I’ll be keeping you updated on the progress.

14 Comments
  • Jackie
    Posted at 07:04h, 08 June

    Matt,

    I can totally empathize with you. It took 6 weeks for us and only 1 showing and a loss of $110K. Thank goodness the guy liked the house. You may have to lower it another $5,000. It will sell. It just takes that 1 buyer.

    Hope all is well with the new job and family.

    • Matt Wegner
      Posted at 21:14h, 08 June

      Yep, just waiting for that one buyer but it’s not easy for impatient people like me ­čÖü

  • krantcents
    Posted at 12:51h, 08 June

    Have you thought about renting it out? I did this 17 years ago. I rented it out for 3 years until the market came back.

    • Matt Wegner
      Posted at 21:17h, 08 June

      We’ve talked about it a lot. We really don’t want that hassle, although on paper it would be much better than losing the money on the sale. We may have to do that but we were looking forward to just closing this chapter of our lives and moving on to the next one. Much is yet to be seen.

  • Lance@MoneyLife&More
    Posted at 07:48h, 10 June

    Best of luck to you Matt I know selling a house can be frustrating. It just takes the right buyer coming by at the right time and it will get done. Best of luck to you and I look forward to an update where the house is sold!

    • Matt Wegner
      Posted at 13:42h, 10 June

      Thanks Lance. We’ll get the right buyer at the right time. It’s just that the right time isn’t necessarily the time of our choosing.

  • Peter
    Posted at 03:36h, 11 June

    Don’t lose hope. I guess that the eventual buyer of the house is just around the corner.

    • Matt Wegner
      Posted at 05:20h, 11 June

      Thanks Peter ­čÖé

  • Mike
    Posted at 13:43h, 11 June

    “The true value of real estate is whatever someone is willing to pay for it.” Sad, but true. No matter how frustrating, just be patient. That one buyer is out there! Good luck!

    • Matt Wegner
      Posted at 16:59h, 11 June

      Thanks Mike. I’d make a terrible doctor. No patience.

  • Paula @ Afford Anything
    Posted at 21:50h, 26 June

    Out of curiosity — could you rent the house for the same price as the mortgage/insurance/taxes? If so, you may want to consider hiring a local property manager (they usually charge about 10 percent of the rent) and then just renting it until the market in that area improves.

    • Matt Wegner
      Posted at 21:04h, 29 June

      We actually talked about that Paula. The local rental management company wants $100 per month plus half a month’s rent as deposit. They figure we can rent it for $850 or so. They would drive by either weekly or monthly and do a walk-through quarterly. Fortunately the house is paid for, so we’d come out ahead after paying taxes, but only by a few hundred dollars. We’re considering it as a last resort but we really just want to move on and start the next chapter of our life.

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