Sellers Beware - A Cautionary Tale for All Sellers
Great information. We need to share this will all of our sellers. I like your wording and I will bookmark this and use your ideas as a reference in the future. Thanks.
There are many ways to sell a house: listing it with a Realtor, for sale by owner, the “We Buy Houses” quick sale businesses, real estate auctions, find a friend or relative willing to buy it....
When it comes to selling, there is no magic pill. Time and again, no one is going to pay more than market value for your home but you can be sure, many people will gladly take a home off your hands if they can get it for well below market value.
As a seller, it is critical to know the true market value for your home so 1) you don’t end up sitting on it forever waiting for it to sell at an unrealistic price and 2) so you don’t “give it away” by selling it for significantly less than it is worth. Buyers need to be equally as careful so they do not overpay for a home.
Traditionally, the best way to generate market value for a home is to list it through a real estate agent and expose it to the maximum number of potential buyers. Some people have had good success through the other channels of selling a house or needed to move it quickly because of their personal situation. But for as many success stories, there are twice as many sellers who lost money through those channels. Honestly, if something sounds too good to be true, it probably is. In this particular case that we are about to share, the seller lost big.
We recently sold a home in the Lansdale area for $275K that needed a fair amount of updating and repairs. We talked to another seller a few doors down on the same street and toured the home which also needed significant work. However, we still felt confident that we could get him a similar price for his house in essentially as-is condition. We did recommend clearing out the house completely of its contents and having a crack in the basement wall repaired so as not to scare off any buyers.
That seller ended up listing with a real estate auction house instead of us. He was very apologetic but said the auction house told him he didn't have to do anything to prepare the home for sale and would set a minimum reserve bid of $260K.
The seller said his plan was to list with us if the auction didn't work out but he really wanted to give the auction a try. The house ended up selling quickly through the auction house but to a buyer represented by the listing agent from the auction house and for an astoundingly low $207,900.
While we don’t know what compelled the seller to accept such a low offer, we truly believe this is a case where the home, seller, and surrounding neighbors would have been better served by exposing the home to the broader market rather than the limited number of auction buyers.
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