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Condition, Condition, Condition

If "Location, Location, Location" are the three most important words in real estate, the three second most important have to be "Condition, Condition, Condition." I was reminded of this again last week when I was working with a relocation buyer and over the course of two days, looked at 25 upscale homes in the Muncie area. My client had been out of the U.S. for several years and was new to the Muncie area so we visited homes with a broad range of styles and ages.

The differences in condition really stood out. Several were vintage homes with lots of space and charm, but one had a damp, musty odor and some obviously leaky windows that completely obscured the many updates and the terrific location. Another was filled with busy, out-dated wallpaper and had a cedar-shake roof that appeared to have more moss than wood. Both screamed,"maintenance nightmare."

Many of the homes that were 12-20 years old had outdated plumbing fixtures, paint and carpet colors. Others had ceiling stains from current or previous leaks. Poorly maintained decks were also frequent. Even in great condition, it's hard for these properties to compete with newer ones in newer subdivisions. In poor or even mediocre condition it's impossible.

We looked at newer homes that were built in the last 5 yrs and even there some of the conditions were apalling. One in particular had great curb appeal, but walking up to the fron door we noticed the shrubbery was infested with bag worms, even to the extent of having bags on the railing and around the front door. Inside, the property had been beaten up. There were several holes in the drywall and lots of tape-joint cracks and nail pops. Needless to say, we didn't spend much time there.

It amazes me that some listing agents, even veterans, don't sit down and have an honest "heart to heart" with their sellers. In addition to the deficiencies noted above, many of the homes, regardless of age, were cluttered, filled with personal items and collectables and often just too much "stuff." People need to know what it takes to make their home competitive. After all that's what they hire us for. If done tactfully and authoritatively, sellers will not be offended and will thank us when the showing feedbacks come in.

Posted by Jim Kouns on 11/10/2009 10:06 AM

Comments (49)

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49 Comments on Condition, Condition, Condition

NOV

You are absolutely right about condition. I can't believe how, in this market, people will not do what it takes to make their home shine. I have a little talk with my clients about this very thing when listing a home.

Again you are absolutely right. It still amazes me at the condition of some of the houses on the market. Tomorrow you can write about Price, Price, Price

Thanks

Correct great blog...buyers are looking for reasons not to buy...great reminder...congrates on feature.

I can't agree with you more. I am always surprised at what I see when I'm showing homes. I blame the listing agents for not having the guts to get real with their sellers. We are there to advise. If sellers don't want to listen to our advice, maybe we shouldn't list those homes.

Jim...you're absolutely correct.....Tim hit it on the head with his comment.....nice post.

You are absoutley right, with condition & price. I toured 1 place yesterday that was advertised as all redone (built in 1982), where the sellers got new applicances & counters (but didn't too anything with the cabinets at all), mismatched carpet upstairs, orginal dark wood doors & trim, and some other items needing work, and was price $35,000 more than everything else in the neighborhood.

This is too true. If the condition is less than perfect, then the seller will not get the best price.

So true. Buyers are out there looking for "GOOD PROPERTIES" I tell it to all my sellers. It seems many sellers knowing that they are not going to sell for the price they want or need, neglect some of the basics for getting a house ready to sell and show.

It all comes down to one word - EXPECTATIONS. When the seller can't afford the house they can't afford to sell it. If the home is worth no more than what the seller paid for it, or, they have spent the equity what do you do - walk away?

Buyers want and expect more than their dollar will buy. The seller can't afford to fix it. If he did fix it or had maintained it then we would be asking more for the home. In a perfect world every house would show like a model. But, straight talk to someone who wouldn't buy the very house that they are trying to sell is futile.

I used to blame the agents, but it turns out neither the buyer or seller can handle the truth.

I agree, and it would be nice if this was entered into the listing. I have shown many homes that looked great in the listing only to get there and find half of the house missing.

You are so right! Adequately preparing a house to sell is equally as important as pricing and promoting it. Buyers are picky and most want a house that appears updated and move in ready--or at least well maintained. Giving sellers honest, objective feedback on the appearance of their property is key.

Oh how true this is !!

I'm actually going to print this and remind any sellers that may need that little extra reminder of the importance of preparing their home to 'shine' !

Totally agree, Condition runs a very close second to location. Thanks for sharing

In a market such as this, you would think that sellers would do things to get their home to stand out among the others, but sadly, that is not the case in many instances. Donna & Larry #2, you beat me to it, next comes price, price, price!

I agree with you Jim and with some of the comments made above. However, many sellers today can't afford to make the necessary repairs and upgrades to their homes. With so many people conducting short sales on their homes they're already strapped for cash. And plus, many buyers know the market. They know that in this market, that even if they do update and repair their homes they're probably not going to get that money back in the sale of their home. Thank you for the post and best of luck to you.

Hahaha, I think we have all hear the location bit and now condition bit. I have one that trumps all and this is maybe a little arrogant but I like this even better then those words.

PRICE!

It trumps all, the location could suck, the condition could be garbage but as long as the price is set accordingly, nothing else matters, price always trumps, people will buy anything if the price is right regardless of anything else.

Just a thought.

Cheers!

Sometimes I get shocked that the listing agents do not advise their sellers to make simple improvements to a home so that it can sell. I showed a house that had a dead rat on the kitchen floor that was decomposed. The listing agent had aparently placed a lockbox on the door and never stepped foot inside.

Chaz

While these kinds of listings have always been around, and even desired by some buyers, the glut of forclosure properties have trashed the "condition' scale along with everything else. It's gotten to the point where the only premium that you get for a nice home is that it sells more quickly at firesale prices. Otherwise all the good work that you put into fixing up a house just sits on the market along with everything else. I think that the law of diminishing incentives is at work here.

Hi Jim,

Well said! If the condition is "off" or the house needs "some help" as I've been known to say, it sabotages and undermines any other factor it may have going for it. The condition is one of those things that can be an immediate turnoff and eliminate a house that has location and even price going for it, nevermind when fha or va financing is involved and condition's not buyer preference but a loan requirement!

I am always honest with potential clients about their property's condition. It has lost me listings because they still do not like to hear the truth. As they say truth hurts and I moved on to realistic sellers! Having said that Price will overcome all objections but we are still struggling with that concept here as well.

Jim,

Nice post. With so many properties having unknown conditions, I believe homes with conditions disclosed upfront (regardless if they are even repaired yet) will have an edge over the competition. The guessing game of what is wrong with homes is too hard for the average homebuyer and they are not wanting to spend a ton of money in trying to figure out the true condition of the home before writing an offer.

Jim- I totally agree with you that Condition is a key. I have seen many houses that before I can "stage" it, need a thorough cleaning, editing, and repairing of certain items . However, as some pointed out above, in this market some of our sellers just lack the funds or energy to do much. I try to suggest ways in which they can keep their budget low (eg. getting moving boxes from Craigslist for free so they can pack their "stuff" up) and "borrowing" items they may need ( chairs, a table, etc) from friend or relative.

I'm beginning to think that the new mantra, instead of Location, Location, Location should be

Location, Price, Condition

I didn't take several homes just for that reason. It would take a couple of months just to make them relatively OK.

In today's market it is more and more important to have homes in absolute tip top condition.

You are so right! People want to move in and do little work. Also, the house needs to have been maintained properly or the price is going to go way down!

Lovingly cared for and upgraded were the key words I read for a listing I showed today. These sellers get an F for condition on this one. What a dump. My buyer asked me how the agent on this property could actually put her sign in the front window.

That's the primary discussion to have with your buyers especially 1st time home buyers. But some of the nicely decorate homes have hidden issues so don't skip home inspection!

Great post - & yes, condition sure is important so a home doesn't get eliminated based on just too much work needed. This definitely includes what a turnoff it is to a buyer if the house is dirty or smelly...

I think Andrew is partly right as well - with so many homes selling for so little, the nicer ones just sell faster, but not for more, so they see little incentive in doing the repairs.

We actually ran out of inventory here for first-timers nearly and all that were left were those that were outdated, worn, torn, dirty, etc. I felt bad for them. They get picked last for the team.

I just walked away from a listing last week because the sellers were not willing to put any effort into updating their house to make it competitive. I wasn't suggesting big things either - just paint, de-cluttering and a thorough cleaning.

Sometimes if one of my listings isn't selling, I'll take my sellers on a tour through competing homes to point out the differences between "fair" condition and "great" condition.

Jim - You are absolutely right. However in our area a majority of the homes for sale are short sales, so the seller typically won't spend on dime to fix anything.

In the foreclosure/short sale market we are in a lot of times my buyers buy based on best condiion in the price range.

Jim, I agree with you. It amazes me that some homes are in the condition they are in. I understand price reflects the condition but all homes should be clean and not smell at the bare minimum. I always advise my sellers how to properly stage their home. I also show them comps of homes that sold in a short time, most of them were priced correctly and showed very nicely.

very good points condition , condition , condition!!!!!

With so many homes available through foreclosure that are NEW, condition takes a heightened profile for homes that are a bit older.

I totally agree with you... I had a home listed and the sellers had a shrine built next to their gorgeous stacked stone ceiling to floor fireplace of their dog who had passed away. They had photo's, toys as well as an urn with the dogs remains in it. At first buyersalways thought it was human remains in the urn which creeped them out... Not until they got closer did they realize it was a memorial for a dog....

I've had a couple of sellers where I sat them down to talk about cleaning, and after everything was cleaned and staged, they stayed in their houses because they were reminded of why they bought it in the first place... shoulda sent a bill for that...

I speculate that many agents are afraid to offend their sellers and lose the listing, so they'll take listings in any condition at any price.

i tell the sellers, if your home is a fixer...you'll get fixer offers. and even if you don't think its a fixer...the buyers will let you know.

the ability to have the "dutch uncle" talk with clients will serve you well. someone needs to tell 'em...better you than someone who delivers the news AND a lowball offer.

that said, the reality for many sellers is that they simply do not have the cash for extensive repairs so it's our job to show them how to get the best bang for their buck. most homes can be whipped into shape for less than $500...a deep cleaning is the first stop for most. i've had very good results also with the living air ozone generators to stomp on odors. i know the jury is out on them but the alternative is a house that smells like a giant foot.

donna, #37...i got a chuckle from you remarks.

I had a seller who was offended I suggested staging because her friends all told her what a good decorator she was. There was one particular room that just didn't work. The staging really did wonders, but it didn't help me because this easily offended person who wouldn't lower the price after an extended period gave it to another Realtor who got her to lower the price and got the sale. Waste of time! There should be a lesson somewhere in this, probably don't sellers strongarm you into letting listings stay overpriced as the market drops.

Jim: I think the 2 most important things to consider when selling a home are condition and price. Both have to be in line in order to entice someone to buy. A home in bad condition will sell if the price is low enough. A home in great condition can command a higher price. But a home in any condition will not sell if the price is not in line with the condition.

Home sellers need to understand that they can command top dollar if they invest in bringing their home up to top dollar condition.

Being a Home and Commercial Building Inspector for decades, many times I am astonished at the filth in many short sale homes still occupied and the sellers want a Pre-Listing Inspection. It makes me wonder how a buyer(s) could ever look beyond the rodent droppings, carpeting stained beyond repair, filthy walls and ceilings, or etched with the children's crayons and markers, sinks piled with decomposing food laden dishes, dishwasher being used as a pantry, bathrooms so filthy a poor third world country would think needs to be demolished, fist holes in doors and walls, water stained ceilings...absolutely incredible what I come across on a weekly basis. Many homes look like they have not even had a general housecleaning in Years.

And what is really incredible many times is the description on the MLS Listing of a short sale I'm inspecting for a Buyer. Charmer, Just Upgraded, Newer Roof, Nicely Done, etc. I have been shaking my head a LOT lately, many are in the same condition as described above listed for sale.

I certainly do not base a Home Inspection on ANY cosmetic items or housecleaning habits of the owners, but some of the short sales and normal sales I've seen in the last couple years just astonish me. In a market like this when a home in the same price range can be purchased in relatively normal condition, how some people live and think is beyond reality.

NOV

Your post reminds me of a comment I made recently about the popular H & G TV shows showing buyers real estate to select. I told my wife, I never see homes in this condition. I could sell any of the houses I see on TV, but selling some of my showings is very challenging.

In my market, condition is a VERY close second to location. People just don't want to look at a property that isn't is great condition. They just move on to the next and there are still plenty of them out there.

I totally agree - sometimes even the price is not the issue. If a Buyer finds a house in great condition in the right area - they usually will try and offer more for the right house. With regards to your comment about seasoned agents that don't have a heart-to-heart - I, personally, think its because they just want a listing and are really working for themselves and not their sellers. A house in good condition will sell quicker and everybody is happy. Keep up the great work.

An excellent reminder that listing agents have a duty of care to be sincere with their client base...no excuse, today, for shabby presentations. All those stagers and home shows have trained the buyers to "expect more".

I'm with you, Jim. When only ten percent of the homes are selling in this marketplace, a pre Home Inspection determines whether you want to be in that ten percent that do sell or the ninety percent that do not. It's a Beauty Contest and a Price War!

So true. I always advise clients that three things sell a home: Location, price & condition: And price trumps condition. If the price is right, someone will purchase a home regardless of its condition. The difficulty comes in the various "eyes" sellers have. Many believe their homes are very clean, when in fact they are anything but! The surroundings in a home become "part of the landscape" a seller sees every day and therefore doesn't see at all. As agents, we all know the "eyes" of the various buyers we are working with so we see with their eyes. We have all had the experience of going over, very thoroughly, what needs to corrected before listing a home, only to discover the seller doesn't see his/her clutter/design flaws/dirt, etc. I agree we must be truly honest with our clients but it often doesn't translate into the results that are needed.

Condition is extremely important unless someone is looking for fixer uppers.

It's especially important when trying to get the most money for a home.

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