Sunday, March 6, 2011

Real Estate Reality

It almost feels as if we are part of a reality tv show; over the past weekend we met with three realtors, each hoping to help us sell our home. Our contract with our first realtor expired after six months. We extended another month and are now listed "by owner" as we decide what to do next. We thought that meeting with three different realtors would give us a good perspective of the market, our asking price, and a time frame. (The reality of our situation, in other words.)

Realtor 1: Market is still slow and will keep going down. 17% likelihood of selling our home in the next 6 months. Thinks we have a great home that shows well but didn't give us a listing price. Showed us comparison houses within our school district. This realtor uses social networking and extensive marketing and does not think open houses are valuable (1% return). He is very successful in Lynchburg and we genuinely liked him.

Realtor 2: Market is still slow, but we are moving into the two biggest selling months (March and April). Thinks our house is great and believes our asking price is the right price. However, also believes we would be showing more if we had a heat pump and/or AC. Recommends installing at least partial heat pump/AC as soon as possible and keeping the price we are currently asking. We like this realtor because she helped us find this house and she is positive and enthusiastic. She does host open houses and thinks they are valuable.

Realtor 3: Market is down 25% and still dropping due to short sales and foreclosures. Loves our house because she loves old homes with character. In fact, she has shown our home several times over the past six months. Compared our house to other similar homes in Lynchburg and believes there is not much to competition within our price range (if we drop the price). Agrees that we are hurt by not having a heat pump or AC, but instead of installing these she recommends we get a quote and adjust the price of our home. We like her honesty and energy and she has a great network here, using media but also making lots of personal connections.

So now we are praying about who to list our home with and how much we should ask. The reality is that we are walking away from this house with less money than we brought to it. The longer it takes to sell, however, the more we are potentially losing. And we need to sell.

It is especially painful that we are not going to walk away with as much as we have invested in our home; we are moving to a more expensive area of VA with less to spend on a house. Still, we have friends who are upside-down in their mortgages and even though we hoped real estate would be a good investment for us, it hasn't been over the past five years.

The good news is that we made a good profit on our FL house (that we invested here) and we'll be buying low in Richmond. It was beneficial to meet with these realtors and check our hopes with the reality of the real estate market right now. It was a bit sobering, and yet I'm also feeling hopeful- buoyed by fresh enthusiasm and confidence that we have a great home that could sell soon. Our family needs to be together, even if we are house poor. That's why we diversify, right?

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