Why might a Realtor turn down a listing?
Ask Phyllis: a blog series of frequently asked real estate questions.
Dear Phyllis,
Fifteen years ago, I purchased a major fixer. It is a one-of-a-kind home on a large, sloped lot with a new four-car garage and a two-bedroom guest house. Although the main home is just under 1,500 square feet, it was built in the 1930s and is very charming. I contacted the Realtor who sold it to me, who told me that he thought it would sell for $500,000 less than I needed.
My Realtor believes the size of the main home, the location on a busy street, and the neighbor’s two-story house negating privacy in my yard are negatives. I have spent hundreds of thousands of dollars improving and repairing this property and now want to cash out and retire. To retire, I need a certain amount of money to do so. He acted as if he didn’t want to try at my price. I don’t understand why any Realtor might turn down a listing. Do you think it’s because he is simply afraid of hard work?
CG
Dear CG,
The first half of last year was very kind to listing agents. We typically prepare the home for sale, formulate a marketing strategy, have a couple of open houses, and then collect offers. This is no longer the case. In the 1990’s I was selling real estate when it sometimes took up to a year to sell a home.
There are many reasons a Realtor might turn down a listing. I don’t believe it’s a matter of your Realtor not wanting to work. I think it’s more that he doesn’t want to waste his time or yours. It’s not easy keeping your home in show condition. Apparently, he believes that your home will not sell quickly, or if at all, for the price you need to retire and move. Therefore, he will have spent much time and money marketing your home without compensation. In addition, when a home seller has unrealistic expectations, they sometimes blame their real estate agent. He may not want to jeopardize your relationship.
Looking at this example, you can understand why fewer buyers exist. Let’s assume a $1,000,000 purchase price with a 20% down payment of $200,000.
Interest Rate: 3%
Mortgage Payment: $3,373
LA County Property Taxes: $1,042
Estimated Insurance: $150.00
Total monthly payment: $4565
Now let’s assume where we have more recently hovered.
Interest Rate: 5.875%
Mortgage Payment: Principal and Interest: $4,732
LA County Property Taxes: $1,042
Estimated Insurance: $150.00
Total monthly payment: $5,924
Unfortunately for home sellers, the market has shifted due to the rapid increase in interest rates. Therefore, many buyers are now priced out of the market. The value of your home is simply what a buyer will pay. It has nothing to do with how much you need or have spent. I do wish you success on your move and your retirement.
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