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Richard Mize, Real Estate Editor

Read more columns by Richard Mize. Or visit "The Business" blog

Contact Richard --Email: richardmize@opubco.com. Phone: (405) 475-3518.

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Homes sell well if listing price is right

By Richard Mize Comments 0
Published: October 18, 2008
Modified: October 23, 2008 at 10:20 am

"Overpriced” is in the eye of the home buyer.

Consider: If the owner of a certain house in Edmond priced it to sell fast, he overpriced it when he listed it for $165,900 in early May.

If he wanted it to sell in 133 days, then he priced it right. But that’s 48 days longer than the average time it took to sell a home here in September.

Priced a little better in the first place, it probably would have sold faster and for more money.

The 2,130-square-foot house was built in 1994 with four bedrooms, three baths, two living areas, one dining area, double vanities and a whirlpool tub in the master bath, two pantries and a breakfast bar in the kitchen, fireplace, enclosed patio, new paint inside, 2006 roof, security system, air conditioning replaced in 2003.

Nice place, but it had some "external obsolescence,” as the experts call it, from the beginning: It’s at the corner of a busy thoroughfare and the busy entry to the addition, with a smaller-than-average back yard up against the busy street.

Price tumbles

Then, after week after week with a for-sale sign in the yard, then month after month, then another sign, then pennants and streamers, somewhere in there the house picked up a stigma when, actually, the only thing wrong with it was the initial price.

Who says? The market.

The owner had higher hopes than the market would bear. He paid $105,000 in 2003, then listed it for sale for $165,900 in 2008? Maybe he made some improvements, but that’s a 58-percent hike at a time when home values in the Oklahoma City area increased less than half that amount, about 27 percent. Then came the price drops: bam, to $156,500, slam, to $140,000 (that’s a heartbreaker), blip, to $139,500.

By fall, the homeowner’s high springtime hopes had fallen: "Seller wants an offer. Bring them on,” as it said in the notes on the multiple listing service. A Realtor told me the homeowner should have listed it for $159,900, or less, at first, and been ready to come off that quite a bit, maybe $10,000, quick.

A lesson learned

A jigger here and a jigger there, and it might have settled at around $145,900, which would have been 39 percent more than the 2003 purchase price — well above the 27-percent average gain for the metro area.

As it is, if the seller didn’t have to come down from the last listing price of $139,500, he’s getting a gain of 33 percent after just five years.

But I’ll bet he’s paying closing costs — and that makes the real appreciation come to about 27 percent, after a summer of seller hell.