? about viewing a house listed with a flat fee mls broker

A house just popped on MLS that interests us. However, it is really overpriced. It is also listed with a flat fee mls broker which may be why it's so overpriced. I'm guessing the seller either didn't get a comparative market analysis or advice considering they probably listed their house for $400 instead of the usual 4% commission. Or the seller could just be greedy.

Basically, two houses on that same block closed this year. They both are the same style and have the same # of bedrooms and bathrooms as the house on the market.

One of the houses has the same size lot and sold this week for $200k less than the house on the market! The other house has a bigger lot (about 3,000 sq ft bigger) and sold for $80k less in June.

The only thing this new house has over the other houses is that it was built in 1998 while the others were built in 1920 and 1930. However, even the other houses were updated with new kitchens and new floors and needed no cosmetic work IMO.

At this point I'm not going to bother asking the broker to see the house because it's too overpriced and I would rather have it sit on the market for a while. Any advice on what I can do to make the seller see that their house is overpriced? Is it rude to ask how they came up with their price or to show them the houses on the block that sold for less? TIA

Re: ? about viewing a house listed with a flat fee mls broker

It's hard for me to comment without having seen the actual listing and what you are comparing it to. But just wanted to make a couple of points:

For a house to be a true "comparable" in the eyes of a realtor, appraiser, etc., it has to be built in the same general time period, even if it is the same style, same number of beds and baths, etc. So you can't compare a 1920s era 3 bedroom Colonial to a late 1990s 3 bedroom Colonial. They are built completely differently in terms of bulding materials, layout, room size. Older homes tend to be smaller overall with much smaller rooms and lack a lot of the conveniences of a newer home.

I have a deal under contract where the house being sold was knocked down to its foundation and rebulit in 1998. When I provided comps to the appraiser, I used new and newer construction comps, because the home had the modern amenities -- large master suite with huge tub and separate shower, walk-in closets, central air, central vac, 2 car garage -- found in new construction. And the house appraised in line with new construction in the area.

So although the homes that sold on the street may have been updated in terms of kitchen and bathrooms, they may have had smaller kitchens and baths, and been smaller homes overall. Do you know the square footage and layouts of the homes you are looking at as comps? A lot goes into making a determination about value based on market data. The house you are considering may still be overpriced, but maybe not as much as you think.

Even if it is grossly overpriced, you probably can't do much about getting the seller to see that unless you go see the home and make an offer that you feel is appropriate. A lot of times, the flat fee realty companies simply list the home on MLS, but to see the home, or negotiate an offer, you will deal directly with the owner. If you do make a low offer, that's your chance to present your comps to the seller and make a case for why your offer is in line with fair market value. But if you try to do that without having made an offer or without even having seen the inside of the home, the homeowners will likely blow you off and not take you seriously, imo.

The sellers may be listing with a flat rate broker and may be overpriced to try to avoid taking a loss -- or doing a short sale. But you don't know their situation or motivation until you try to negotiate, and even then, they may not tell you. But you really have nothing to lose by looking at the home and making an offer at this point. Even if they say no, they may reconsider your offer in the future and come back to you with a more reasonable negotiating stance. If you don't do anything, someone else may come in and make an offer, and they may take it. Maybe the chances are slim if the home is way overpriced, but you never know!

ETA - If you have a realtor, then you can always have your realtor feel out the situation about the price and the motivation of the sellers.

Message edited 12/4/2011 1:55:18 PM.

Re: ? about viewing a house listed with a flat fee mls broker