When the time comes to put our primary house up for sale in a few years before a long anticipated move south, we will be tempted to list the house ourselves. I hope we are strong enough not to give in to the temptation. For sale by owner is a fool's paradise.
There are too many psychological traps in the pricing of a home. In our case, we have lived in our Connecticut house for 15 years. We've raised two children there, spent uncalculated thousands on landscaping and other home improvements, and we built a kitchen my wife designed that literally changed our lifestyle by elevating our joy of cooking, entertaining and, of course, eating. We have invested a lot in the house, financially and emotionally. For the right family, we think our home is worth $1 million.
But the truth is, at that price our house would sit on the market until the next housing boom, which may come when I am in a nursing home. Our house is worth only what someone else will pay for it, and we are worse judges of its true value than is the guy who cuts our lawn. Especially in a tough sellers market, pricing a house too low will wind up costing way more than the savings of cutting out the middleman. (Note: If this were a strong sellers' market, I could be writing an entirely different column.)
I did a little test this morning after picking up a booklet with a listing of homes for sale by owner. I compared those listings with listings by realtors representing clients selling the same sized homes in the same neighborhoods. Of course, you cannot know the condition of the properties, the views, and other nuances from four or five lines of agate copy, but I figured the comparisons would give me some anecdotal evidence to confirm my suspicion that owners factor in their commission savings when pricing their homes.
My assumption was wrong. In virtually every instance where I could find homes of similar sizes in the same neighborhoods, the price listed by owner was the same or higher than all others. At the International Club in Murrells Inlet, SC, for example, an owner is offering a small 3 bedroom, 2 bath home for $218,000. The listing by a realtor for the same size house down the street is $219,000. A 3 bedroom, 2 bath condo adjacent to the True Blue Golf Club, a dramatically scaled course by Mike Strantz in Pawleys Island, is listed by the owner at $270,000. The same sized condo was advertised by a realtor in the real estate section of Sunday's paper for $245,000. In the half dozen other comparables I found, the owners' prices were higher than the realtors'.
It is hard to pay a 5% or 6% real estate commission, and the $25,000 savings on a $500,000 sale can purchase a lot of newspaper advertising. You can even rent a billboard for a few months for $25,000. Try asking your real estate broker to advertise your home on a billboard.
But the marketing is irrelevant if the pricing is wrong. Pricing is more important than ever in today's market. A home overpriced from the gitgo will languish, and later price decreases still might not be enough to catch up with comparable homes that were priced right from the start. Readers of this site know we are no shills for the real estate industry (although some of my best friends are realtors, and I know they provide many more important services than simply determining the right price). But when it comes to selling your house, we defer to the warning you see so often on television: Do not attempt this at home.
Living Southern Style magazine, the publication of the Live South organization, recently published its list of the "Top 100 Amenity Communities." Live South, which runs a well-attended series of trade shows that attracts some top southeastern communities and thousands of newbies to the community search process, identifies communities in just nine states, as well as Mexico and the Bahamas, on its amenities list. They promise to add communities in other states in the future.
Although a list of 100 of anything implies a certain comprehensiveness, there are some glaring omissions on the Living Southern Style list. The group of communities with the widest and most lavish array of amenities in our experience, the Clilffs, does not make the list. The Cliffs, besides its seven world-class golf courses, offers equestrian centers, beautiful pool complexes, well-appointed fitness centers and spas, guided nature trails and access for members to its other holdings, one in Argentina's Patagonia region. We don't see the Savannah area's Ford Plantation on the list either; its combination of Pete Dye golf course, marina, and recreational options along a beautiful river is the best we've seen, if money is no object (homes begin over $1 million).
Some communities on the Living Southern Style list don't even feature a golf course. (When did golf fall off the amenities list?) But although we did not check out every community on the list, we did note that most are either advertisers in the Live South publications and/or exhibitors at the Live South trade shows.
We've said it before and this seems the right time and place to say it again: Proceed with caution when you do your home search research with organizations that are paid to promote communities. Live South does its job quite well, but their primary "customers" are the golf course communities they represent. If something strikes your fancy about one of the communities on their list, contact us . If we are familiar with the place, we will tell you what we know. If not, we'll get as much information as we can. Whatever, we will try to cut through the hype.
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