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Hi there,
So my neighbor referred an old friend of his to me to help sell her cabin. The owner is 79 yrs old and has a cabin near S. Tahoe and wants to sell as-is. The cabin is older (built in the 60’s) 1100 sq ft., and needs work- new roof, siding, driveway, etc.. Here’s my dilemma, she wants $480-$499K. Zillow has it valued for $460k and redfin at $410k. Obviously her expectations need to be re-evaluated. She said she won’t budge even though I laid out the numbers and estimated fixing costs. I’m tying to educate her and be respectful as it’s been in her family for a long time. Do I walk away or keep trying to show her and give her time? Any suggestions? Thanks in advanced..
Cammie, I’m making the assumption from your description that the 79 year old owner lives elsewhere, and that this vacant cabin has been used as a recreational family getaway property for special occasions.There is a forever hazard for remote vacant properties like that, no matter how well locked up and otherwise secured they might be. The longer it sits there vacant, the greater the risk of vandalism, break-ins, thefts, fire, dope operations, etc — all of which can hurt the value and run up the rehab cost a lot more. That may or may not be on the owner’s mind. It doesn’t sound like it is.
There should be a polite, but non-aggressive way to learn the owner’s thinking on that hazard. In any event, she simply may not be ready to bring the price down to where the market will respond. In such cases, be sure to leave your contact info with her and check back from time to time. One way or another, the price will eventually come down — either by her choice, or by a later decision of a probate court. It’s not meant to sound brutal, but which would she prefer to make that choice? And if she’s in very good health, this is a process that could take many years to completion.
I don’t know if you’re doing this simply as a favor, or if you’re in line to make a little money for your time and efforts. If the latter, be aware this is not quick money to depend on.
I also assume that since this property has been in that family for a long time, there are a lot of memories and strong emotions involved. In which case, there is a premium on good diplomacy.
Best of luck,
–Dee
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only time will solve the unrealistic seller problem.
tell them the number just don’t work but if their circumstances change (lower price) to give you a call.
Most likely the prices you got from redfin and properties in GOOD condition. Since this one needs a lot of work, they are totally unrealistic about the price they can get.
The seller is obviously NOT a motivated seller if they want so much more than market value. Time to walk away for now but follow up ever 3-6 months.
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Cammie, when you check back with the owner later this year, there are a couple of things worth mentioning.1. Nationally, the housing market is sagging, even if resort areas such as you describe may resist that sagging a little better. Which means that Redfin, Zillow and other market watchers may well be showing lower market figures than they are now. Things like that tend to jar the rock hard thinking of the currently unmotivated seller.
2. The owner probably has little knowledge of how housing rehabbers construct their offers. At best, they might offer 60% of the market value (some rehabbers start at 50%) if there were no repairs needed (called the ARV, or After Repaired Value), but would subtract from that figure the cost of whatever repairs they believed to be needed.is
Both of those issues suggest the owner is pitifully uninformed. But they are issues worth mentioning in as kind a way as possible the next time you check with her. The better and more timely your research on market values then, and a rehab cost number if you can get some help in estimating, can help put some realism into your conversation. No guarantees, of course, but we’re working on improving your odds.
–Dee
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