It’s not that your daughter’s ugly…

Sometimes talking to my sellers and trying to explain to them why their house isn’t selling is like trying to discuss why someone’s favorite daughter didn’t win the beauty pageant. It’s not that their daughter is ugly; it’s just that she was competing against other girls who were significantly better looking. Maybe the losing daughter was a few pounds overweight or a few years older than the other girls (and it showed) or just didn’t have the talent or the interview skills – there are always reasons and some are easier that others to explain in ways that won’t offend the parents.

The same is true with houses, especially in the current market in Michigan. I show a lot of houses in the $200-300 price range, which in Michigan is a good price range and in which you can get a nice house in the 1,800 – 2800 Sq Ft range. Many of those houses would have sold in the $300-400K range a couple of years ago. Most have 3-4 bedrooms, 2 and a half baths, 2-3 car garages, full basements and nice yards (most under 1 acre) in newer neighborhoods. Many were built in the 2000’s.

But then the differences start showing through. Some have nicely finished basements, while some are still sitting there on raw concrete basements with maybe an old piece of carpet thrown down for the kids to play on. Some have hardwood floors while some are carpeted wall-to-wall directly over parcel board flooring. Some have fireplaces and some don’t. Some have nice decks or patios out back while some still have boards across the door wall to prevent you from opening them and falling out the back. Some have walkout or daylight basement and some have dark regular basements. There are lots of differences like that that make if fairly easy to distinguish and rank the similar houses in the subs.

Then you have to try to also rank them against similar sized houses that were built in different eras. That 1970’s house that is of similar square footage and may be on a bigger lot or that early 1980’s house in what was an upscale sub at the time. How can you compare them? Not very easily, it turns out and not very directly. Most of the older houses have such different floor plans that making direct comparisons is impossible. Sometime in the mid- to late-1980’s builders in this area changed directions to start building houses with everything for the owners on the entry level vs. the traditional colonial floor plan of all bedrooms up. They also started building floor plans around great rooms and gourmet kitchens. So, now the best of the 1970’s traditional colonial homes look really dated. They don’t have great rooms with volume ceilings. They don’t normally have large, gourmet kitchens. They don’t have master bedroom suites with huge master baths and walk-in closets. They aren’t ugly; they just don’t fit in well in the current beauty contest.

In addition, many of the homes built back in the 1970’s and early 1980’s have wallpaper and wood paneling everywhere. That was big back then. I know because I did it to my own house back then (and later had to strip it all off). And there was a color thing going on in the baths and kitchens back then that has stayed with many of the houses built in that ear – turquoise and harvest gold and pink or mauve was all the rage. Many of the houses still have all of those old, colorful baths and sinks and toilets in them. And in the kitchens you’ll find Corian cabinet tops if you’re lucky, but mostly just Formica. Unfortunately many of these houses have been in the same hands since they were built, so little, if anything has been updated, including the mechanicals (if it ain’t broke, don’t fix it). By now almost everything major is at or near its end of life – furnace, water heater roof, etc.

So, now those owners put their 20-30 year old houses on the market, convinced that they can compete in the teen beauty contest that they are entering. The outcome is predictable. They may get a few showings but no offers or they may get a few offers that they consider to be low-ball. In most cases those low-ball offers actually reflect what the market price of the place is, based upon the need to do extensive updating. And then I get to have the “your daughter’s not ugly, but…” conversation with them (again). I get the “it was good enough for us for all of these years…” push back and the “I won’t give it away…” retort or the “well then, they should just make us an offer…” rationalization. Maybe that’s when I lead them from the backstage vantage point in their daughter’s dressing room out to the front of the stage to see what the other contestants look like (a few visits to similar active homes). Sometimes there is a catharsis that comes out of that, but many times it’s just further denial of the truth, “well, I’ve never liked those big high ceiling room myself, I think they’re ugly.”

Eventually, even the most stubborn owner will eventually capitulate to the feedback from the market and price the property to sell. Unfortunately that is all to often when they are on their 2nd or 3rd listing agent and well into their 2nd year on the market. By then they have probably lost $25-50,000 more than they needed to had they priced properly in the first place. In our market houses continue to lose about 1.2%-1.4% per month in value; so, being adamant that their not really ugly daughter of a house can compete with the younger houses costs owners between $2,400 to $5,000 a month. Ouch! Was that a blemish that just popped out on your daughter’s face?