Dec 29, 2010

Is Your Home Price and Size Scaring Away Buyers?

In the current market, large, luxury homes can be among the hardest to sell. ChicagoMag.com's Dennis Rodkin, for example, dubbed this the year of the "half-priced new mansion." And the headlines have been full of frustrated celebrities who can't unload their million-plus dollar homes. (Like Kathleen Turner, who listed her weekend beach home in the Hamptons at about $8 million five years ago, and was finally reported to have sold it for only $3.9 million in November of 2010.)

What's a luxury homeowner to do? I recently sat with a couple who were consulting with their real estate broker about this very issue. Their home wouldn't qualify as a mansion, but it's no starter home either, with up to five rooms that could be called bedrooms (because they've got a closet), a mostly finished basement, in an upscale neighborhood, with a price tag that would have been well over $1 million five years ago.

Here are some of the strategies that they and their broker came up with:
  • List it at under $1 million. Whether it could be listed higher is debatable in this market, but they're going to the low end of the range in order to draw in potential buyers who, psychologically, can't imagine buying a home with "million" in its price tag.
  • Instead of saying five bedrooms, call one of the rooms a "bonus room" (justifiable because it's smaller and in the basement anyway). Most young families -- their most likely customers in their neighborhood -- won't be searching for a five-bedroom home, and will overlook their listing if it seems too big for them. But they'll be excited by a bonus room that can be used for office space. 
  • Hire a home stager to fix it up with family appeal. The stager plans to include modern, family-friendly furnishings, so that it excites, rather than intimidates or overwhelms visitors. 
I'll keep you posted on how well these strategies work!