What happens when a good friend wants to sell their home but you know they will lose money if they sell now? Just last week we were invited to do a listing presentation by friends and neighbors. As soon as we pulled their tax information we knew they would loose money with this transaction.
We hoped there was a discrepancy in the tax roll with regards to the size of the house, we hoped they had not put a lot of money into it, we hoped we had made a mistake and could give them the information they wanted to hear.
Although their house ended up being 200 square feet bigger than the tax roll shows, we did what any ethical real estate agent would do, we presented reality. Reality that would not be welcomed and would be combated with objections.
These people bought at the height of the real estate market, at the end of 2005. They paid top dollar for the house and spent over $100,000 in improvements. The house is in a great location, shows beautifully, but someone would have to pay way above market value for them to break even.
Above market value is not very common in a "buyer's market", above market would mean the house would not appraise and any offer with financing contingencies would have to be re-negotiated, due to the fact that no bank will loan money above the appraisal value. We have not encountered anyone willing to pay above market in a buyer's market.
Here are some of the objections we heard:
- We have sold 4 properties and all four were listed way above market value and we got what we wanted. (when asked when this occurred, it just happened to be during the height of a sellers market)
- We understand it is a buyer's market, and don't think marketing does much when selling a property, what works is aggressive selling. (Don't aggressive selling and aggressive marketing go hand in hand?).
- House X, 2 blocks away is listed for a lot more and it doesn't even compare to ours (I agree it doesn't compare, but it has also been listed for 8 months with 3 price reductions).
It all boils down to understanding the current market. We know the 2 other agents that will be interviewed will be willing to price the house at whatever the sellers want. That listing would benefit us tremendously, but it could also hurt not only our reputation, but our friendship. As creative as we may be, we consider this a lost 
case and can only wish them luck and hope the agent chosen does not do them a disservice.
If you bought a property in 2005, it is very likely that you paid top dollar, since it was the top of the seller's market. Your only option might not be to sell, consider renting the property. Renting may not cover your costs, but you may loose less money by renting now than selling. Prepare different scenarios with the help of your real estate agent, do the numbers and you will figure out what works best for you. Be objective when considering all facts, including average time to sell a home in your market, amount of inventory, closed sales and marketability of your property.
For any questions about South Florida real estate and market conditions including Miami and Miami shores, please visit RICK & INES at http://www.yourpropertypros.com/ www.miamism.com
should use appraisers more often. like before renovating!! maybe my realtor® buds could start pushing my/our services. $325 would save people a lot of money in the long.. and i could get a new car! ;) te veo.
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