ugh, he is gong to be a pain. I don't really deal with this since I"m on the financing side but you really should just be blunt but polite with him. Tell him to look at it from a buyers stand point. Why would I buy your house for X minus the cost to do the repairs when I can go next door and just buy x? that just doesn't make sense. If I have to do the repairs then I want to see added value come out of it. You already said it in your blog and that is probably your best bet.

Rick - Thanks for the advice. That is a good idea to put it in a question so he can see it clearly.

Hi Cody,

When I go to a list a home, I take two numbers with me in my head.  A mint condition number and the minimum number.  I will look at the house and determine where I think it should fall on my own.  I never tell the seller my pricing opinion until we are signing the listing contract.  If we can't come to an acceptable price- I won't take the listing.  It is not worth my time or my money in this market to take on a house that is not going to sell.  You will also find that the seller's that press for the top dollar when they have a mediocre house will also be your biggest pains- they always want more than what is agreed upon. 

My suggestion is to have a marketing plan, share it with them, and stick to your guns!  Ususally when I am leaving after not taking a listing they reconsider- don't forget to do it tactfully so they actually ask you to come back in and discuss it more.

Shanna - Great advice about sticking to your guns. This is something that I want to become much better at. It is true that taking an overpriced listing only results in a headache and stress that didn't have to be there. Thanks for the comment!!

I generally use a ratio of 2:1 - so for every $1 in repairs needed, a buyer will discount $2 for the time and inconvenience.  Sometimes it's helpful to have a third party--like a stager--come in to be the "bad guy" and be very blunt with your client.  That way you get to maintain the relationship, but they have an "unbiased" person telling them the same thing you would.  Another option is to utilize your office tour or a broker's open to get opinions on the two prices -- he may be more willing to believe it if it comes from a large group of people who are potentially bringing buyers by later.  Finally, he may just not want to deal with the repairs himself, so if you can recommend a good and reasonably priced contractor to him he may be more open to it.  Good luck! 

Katie- I appreciate the comment and your ideas. I have found the 2:1 ratio to be a good method also. I have never tried having a 3rd party go in and be the bad guy, I will have to think about that method. Thanks.

Cody

That tough Cody, in my market it is becoming increasingly popular to hire stagers because buyers are SOOO picky (not that I wouldn't be either).

When a home needs deferred maintenance, a buyer sees $$$$. They see the other things that have not been addressed as well, the what if's. It screams that the home has not been well maintained and who wants to spend money on an inspection of a home they already feel uncomfortable with. They want big discounts, and what the seller may pay to repair/update, may not cover what the buyer wants, ie. granite, etc. SO it makes sense to do it up front, or reduce heavily - otherwise, I would walk away... it might not be worth the headache. 

Remember, it's an emotional purchase...

Leigh - Very good point on how the seller may discount it only enough to cover what he feels needs to be done and to his standards where as the buyer my have a completely different idea. It seems the large discount to make it worth taking the listing as well as to bring buyers in is key. Thanks for your comment and ideas.

Tell him to fix it up nice, bite the bullet I say, bite the bullet!  Be firm.  It is way easier to sell a freshly painted, newly carpeted or tiled (in FL) home than one that needs work...He will get more money out of it as well.  If not sell it "As-Is" with the right to inspect and pray for the best offer...stager's won't help if the property is a mess...what is the price range on this??? That will be another consideration.

Nice to see you post...I read you post on the engagement/marriage blog...  :-)

FT - Yes good to hear from you again! Thanks for both comments. The home would be around $500,000 all fixed up. So if you were to sell it as "As-Is" what method would you use to price the home down to where someone would look at it? How would you explain the drop to your seller? Thanks again for your help!

 Cody

I would do a CMA on the local properties. Then I would go see the ones on the CMA. I would show the pictures and the price adjustments to the seller. On our MLS is calculates the prices per sq ft as well as the prices based on the sales in the area.  If it is a $500K property, paint it and make it look nice, otherwise, drop the asking price, in this market, I would say by 10%.  Become the lowest priced house...In South Florida, homes selling "AS-IS" are going for 10-20% below asking price...  :-(...selling the ones that are in move in condition are going for 5-10% below asking price that is in Broward County...

Do you have pictures that you could show us?  Do you know how?  Just in case, click on the tree, browse, go to appearance, change the size to around 200, the rest adjusts itself...then we can really give you quality opinions. I'm guessing that the market is the same in most places. Some are doing better (holding their value) than others.

Cody--  If the problems with the home are strictly cosmetic, I give the seller the price range for the property as-is.  If we are within 3% to 5% of a reasonable price range, I go ahead and list the property.  If we are not, I do not usually list.  I have found the hard way that listing over-priced homes costs you as the agent. 

There are the tangible costs of marketing, time, broker's open houses, etc.  But more importantly, the intangible costs include lost follow-on business.  For my well-priced listings, I usually receive 1 to 2 pieces of additional business -- a new buyer who does not purchase this home but signs a buyer agency agreement with me or another seller in the same neighborhood.  This never occurs with the listings that I have allowed sellers to price even 10% above market value.

Ft - Sorry for the delay on responding. I agree it needs to be the lowest price home "as-is", the fun part is showing the home owners the need for this. I actually don't have pictures anymore. Back when I was working with the guy I did but I have moved on because he just wasn't being realistic. Thanks for the tip on the pictures, I was wondering how to do that!

Demetria - Thanks for the advice. That is a good point about receiving business from well priced listings. We get judged by the listings we take not the ones we turn down.

Cody