Divorce Houses Look Like Fire Sales
Valerie has written a useful blog about divorce sales...I feel the best advice in response is to re-arrange furniture and closets as if the home was still functioning for a couple - that may include staging expense but it's probably worth it. Buyers have a kind of sixth sense about these things - they pick up clues - for example, if only one person's clothing is hung, on one side of the closet, bare spots on the walls or floor where something clearly used to be...
As a listing agent, it's our job to get the most money for our clients: if buyers sense a fire sale, that might lower their offering price. As a buyers' agent, it's fair game to ask the listing agent what's going on - and I'm surprised how many agents will tell me what's happening behind the scenes. Do their seller clients know they're spilling the beans? Did they say it's ok to talk about the marriage breaking up? We are obliged to be honest with everyone about issues that materially affect property value or desirability - but divorce is irrelevant. In California, we should hold our fiduciary duty to our clients above all.
You know what a fire sale is.... a store puts everything on sale at deeply discounted prices. It used to be because there really had been a fire but it then became an expression. Wikipedia defines a fire sale as follows:
A fire sale is the sale of goods at extremely discounted prices, typically when the seller faces bankruptcy or other impending distress. The term originated in reference to the sale of goods at a heavy discount due to fire damage. A fire sale may or may not be a closeout, the final sale of goods to zero inventory. Fire sales are thought to occur in the financial markets when bidders who value assets highly are prevented from bidding on them, depressing the average selling price below what it otherwise would be. This lowering of the price can cause even further issues because it may be inaccurately perceived as signaling negative information.[1]
So you know that a divorce is a closeout of a marriage, the house is part of the inventory, the price lowering can cause a negative perception of the house. Before the end of the marriage results in warfare, the couple needs to look at their financial needs and make a decision - sell the house while it still looks like a loving family home or pull out all the furniture, strip off the fixtures and each person high tail it out of the area leaving the agent to try to sell that dog of a house. When it looks like the house has been striped then Buyers see the potential of a 'fire sale' and will bid accordingly.
Don't let your house sale go up in the flames of a fire sale.
There is one home in my neighbourhood that has now gone through three of four price reductions. The owners are gone (in different directions) and the agent is left holding the 'fire hose'.
Photo credit: South Beach Fire Hydrant http://www.flickr.com/photos/chrisgold/3287777029/lightbox/
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