How can you mess up a listing? Oh, let us count the ways.
Last summer, I took the House Einstein team to check out a new high-end property. Seeing listings as a team is a great way to keep tabs on the market, and on a perfect Boulder day, it sure beats a stuffy office meeting.
On paper, the home was impressive; the $3MM asking price set an expectation that we were about to see something quite special. It had been recently completed, and the photos showed a modern exterior coupled with an open floor plan and multiple indoor and outdoor living areas. With six bedrooms, most on the upper level with en-suite baths, and 5,500 finished square feet, there was plenty of space for a family to spread out.
Don't get me wrong, the home was lovely but the bargain-bin doorbell was an indicator of other problems lurking.
Let's look at the timeline.
Key Property Facts
Lot size: +0.5 acre
Bedrooms: 6
Baths: 6
SQFT: ~6500
Garage: 3 spaces
Location: North Central Boulder, east of Broadway.
Hard Knocks
After 9 months on market, two MLS refreshes, and a $200K price reduction - the listing is struggling. What went wrong?
Mistake 1: Poor property selection. The back corner of this flag lot is not just in the 100 year flood, it’s in the conveyance zone. Flag lots offer privacy from the main road but at the expense of tight proximity to a neighbor. To enjoy the Flatiron views from the second floor means also subjecting yourself to the neighbor’s trashy yard. Fixable, perhaps. Assuming you can convince the neighbor to clean up their act.
Mistake 2: No staging when initially listed. Not even cheap virtual staging. While they corrected it a few months later, by then, it was too late. At this price point, and with a home of this size, it's crucial to hire a professional staging company. Remember, you never get a second chance to make a first impression.
Mistake 3: Test the market pricing strategy. The Boulder market has clear tranches and the higher you go, the more elastic buyer demand becomes relative to the purchase price. This means a $3MM listing is competing against homes that are valued much higher. The higher the asking price, the more research and care should be taken in pricing the property. The Boulder real estate market is unforgiving of pricing mistakes.
Mistake 4: Cheap finish choices and lack of attention to detail. The doorbell was only the beginning. Finishes all over this home were poorly chosen, including outdoor decking (warped) and fencing that is already falling apart (see above image). Even the outdoor signage told buyers that the developer was penny-pinching.
Conclusions
In any negotiation, it's smart to think about and address your counter-party's top concerns - voiced or unvoiced. Spec home buyers are rightfully worried that they may be buying a home that was hastily and cheaply constructed. All builders are interested in maximizing profit, but zip lock signage and cheap doorbells send a strong signal the developer cut corners. Exterior finishes that are failing in a brand new house go beyond builder cheapness, they suggest incompetence.
I'm not going to publish the address of this listing until it closes. Those are the rules in the real estate business, but would you be surprised to learn the home is still on the market? Of course not.
As of this writing, the home has been listed for sale for nine months. It will likely be on the market for many more before it sells at a much lower price. For now, the seller would be well advised to go through the house, correct badly chosen finishes and get rid of anything that lends a poor first impression - starting with that doorbell. And next time, choose a Realtor who will tell you the honest truth about your listing.
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Osman is the primary author of the House Einstein blog with over 1,200 published articles about Boulder real estate. His work has also appeared in many other blogs about Boulder as well as mainstream newspapers, including the Wall Street Journal and Daily Camera.
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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties. We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate.
You can also like our Facebook page or follow us on Twitter.
As always, your referrals are deeply appreciated.
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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties. We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate.
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