Alexander Muse has a house for sale in Dallas. If you *must* live in Dallas, go look at his house (or buy 20% more home here in San Antonio for the same price!).
Anyway, Alexander notes that he is bucking his Realtor, and increasing his home price, even though he hasn’t had any nibbles at the lower price. Doesn’t seem to make sense.
But sometimes, nonsense makes sense! When I sold my Florida home in 2004, after getting hit by four hurricanes in 6 weeks, I priced it at 15% more than I paid for it, and much to my Realtor’s horror, I had it listed “as is”.
The house had $26K of damage to it in the 8 months I owned it. Yet I was asking over $30K more than I paid for it AND selling it “as is”. Crazy? Sure it was. But I got exactly what I asked for. Why? I had a unique house – it was worth the money, and I knew it. Evidently someone else knew it as well. It sold in about 2 months.
So I think Alexander is on the right track here. First, why sell it for break-even unless you have to? Second, why devalue the very thing you are trying to promote? That seems illogical to me.
What does this mean for us? Our realtor is actually a great guy and has done a great job, but I do think that Levitt’s prediction that realtors will “attempt to convince their clients to sell their houses too cheaply and too quickly” is true. Instead, I am going to assume the data Harris has reported is true and we have in fact reached a bottom and increase the price of our home to reflect a 5% increase over the last six years (a far cry from the 20-60% other homes are listed at). Needless to say our realtor is freaking out. He has NEVER heard of anyone increasing the price of their home.