Selling Your Mom's (or Your Grandma's) House

Dear Ali:
I inherited a house that's four hours and a few states away. We have cleaned up the house and listed it with the local Realtor recommended by the probate lawyer. The only comments are that the house needs work (it does) and it's an older home. The price was listed with this in mind. We've been told that contractors have gone through, and an architect. But we've had no offers, even though the people who went through with the architect were cash buyers. We've also had no feedback as to why the offers did not come through. Our contract with the real estate agency is about to expire. How can we get this house sold? It is the location and not the house where the selling point is.
A: It's really aggravating to do a long-distance sale. We sold our beach house last year, which was only an hour away, but it still feels like you are putting a lot of trust into your Realtor because you can't, say, drop in on an open house for yourself. On top of that, the fact that it's an estate sale ... my condolences for your loss.

Of course, the person who is most likely to have a good explanation of why the offers did not come through is the selling Realtor, and I think you should press him or her harder for an answer.

That said, there are really only two possible scenarios: the buyers who saw the house either want to live there or don't.

I know that sounds like a "d'oh," but let's break it down and analyze it further.

Case One is that the buyers who saw the house are truly people who want to buy the house as a residence. If it's the case, then they had a "vision" of what the house could be, and either their architect and contractor told them it couldn't be done, or it would be too expensive to do it. It's worth getting feedback from the real estate agent here as to what the architect/contractor said, because that information can go into the next sales pitch. ("You could really have a lovely open plan if you tore out this wall and expanded the kitchen, and we've had a price estimate on that work of $75,000, so we've priced at $100,000 below market to take that work plus the hassle factor into account.")

Let me say I think it's unlikely that those are the people you got because a lot of the buyers out there now are first-timers, who are generally scared of renovations and don't tend to be all-cash.

Case Two is that the buyers who saw the house don't intend to live there -- i.e., they're investors who either want to renovate the house and flip it, or renovate the house and rent it out. In that case, they got a renovation price and decided that the numbers don't work for them.

Well, guess what? They're not going to work for anybody. Not every property is a good investment candidate.

What you want to beware of, though, is spending more of your sales and marketing time on these people than necessary. A real estate agent can't be everywhere, and for time management's sake it's just as important to shoo away bad traffic as it is to draw in good traffic.

We just had this situation in Manhattan, where we had a two-bedroom condo that sounded like a good investment property on paper, because the list price was low. Once investors saw that the bedroom sizes were very unequal and that the monthlies were high, though, they realized that it wasn't a good rental.

Well, my job was to get rid of these people up front -- "are you interested in it as an investment? Because I have to tell you, the second bedroom is small" -- until I could find a Case One buyer who loved the idea of living in the property.

Similarly, your agent (whether you renew with the existing Realtor or switch Realtors) needs to draw up a marketing plan that doesn't just emphasize "cheap," but emphasizes the property's great location and historic bones -- and then notes that a renovation has been priced in.

One place to start might be with the area's local contractors and architects. If the home is truly a diamond that just needs polishing, they'll "get it" -- and take the story to their networks.

I truly believe that your buyer is out there. Good luck.