Next week we are going to the closing of an investment property sold this spring. We started the process in November 2009.
Go here to see how the project got started: Putting Investment House for Sale: Randolph Road Atlanta Georgia
Tim and had owned an investment property on Randolph Road and rented it out for the past 8 years. The home was a solidly built 1960s ranch with a full basement and large fenced back yard. Inside, the home offered hardwood floors, spacious rooms, a real brick fireplace and a lot of character.
Our middle daughter, Ellie, is going to be a senior at Vanderbilt University this fall and we knew our final round of tuition payments would be coming up in August 2010. Given the performance of the real estate market in the past couple of years, we figured we had better go ahead and sell another investment property to help defray the college expenses.
We started the process just before Thanksgiving 2009. There was a lot of work to do as the previous tenants left us with the home in less than stellar condition. We also had some maintenance items that needed attention.
Tim jumped on the stuff we could do ourselves:
1. Deep cleaning
3. Kitchen cabinet rehab
4. Whipped the yard and grounds into shape.
And we brought in contractors to help with the big stuff
1. New cabinet doors for the kitchen cabinets.
2. New granite countertops in the kitchen
3. New undercounter stainless steel sink and kitchen faucet.
4. New light fixtures.
5. Replaced windows in basement, kitchen and den.
6. Sanded and refinished hardwood floors.
The house looked pretty good. Actually, it looked real good. We finished the work just after Christmas. We put the house on the market just after New Years. Pricing was an issue as Tim is one of my most hard headed customers. I ran a market analysis and showed the house should be priced between $300,000 and $$310,000. There had been very few neighborhood sales in the past 6 months and most of my data was over a year old.
Tim had just finished doing all that work and thought the price should be closer to $320,000
Tim was being stubborn so I let him go ahead and price the home at $317,900. Not much happened after it hit the market. Never a good sign.
We dropped the price to $314,900 after about a month of no activiity. We got a couple of showings.
Around Valentines Day we started to get serious and Tim agreed to drop the price to $304,900. The showings started to come pretty frequently now. We got a lot of feedback about the kitchen being a bit too small for larger families.
As the April 30th deadline approached we dropped the price to $299,900. Surely we would attract a buyer at that price level. The basement was waterproofed and ready to finish. This was a lot of house for the money.
April 30th came and went. No buyer. Large sucking sound from Timas he looked at what investments would have to be liquidated to make the August Vanderbilt tuition payments. Tim made his final price adjustment to 292,900. "Just going to put it back up for rent if it doesn't sell at this price" were his words as I tweeked the price in the mls.
Well, there was not an avalance of offers coming in. We did get some showings but nobody stepped up to the plate to make an offer. A long time associate, Barbara Dillon of the Three Generations Team had shown the property and had a client who had some interest. Tim asked me to check in with her before we actually put the home back up for rent. Barbara's response: "Yes, my client is interested but the price would have to be around $280,000 for everything to work out.
Guess what, we agreed on a price that is $40,000 less than what Tim had hoped to sell the home for originally. Are we happy and elated? I would have to say no. In fact we are disappointed the home did not bring a price much closer to 300k. But we did find out the true value of the property as dictated by the present market. And Tim is pleased he will have the Vanderbilt tuition money in hand when the August invoice rolls around.