On February 15th, I listed one of my best 3/1 rental houses for sale. I listed it with what I thought was the best RE agent my small town has to offer. Original listing price was $45K which my agent said was the right price based on comps. In the first 6 weeks, I had several low ball offers ($30K) and I did have one serious offer at $38K but that buyer got scared and disappeared into thin air.

Two weeks ago, I dropped the listing price to $39,900. That did nothing. Last week, I dropped it again to $34,900,...again that did nothing. I will not drop the price again.

What is really interesting here is the fact that I have people standing in line waiting to rent this house at an above market rent of $700.00/month in case the house does not sell.

Can anyone here tell me why my house ( which is in Mint condition) is not getting any serious offers to buy? $34,900 is a give away price too. Did I choose the wrong agent? Should have I listed it FSBO? My RE agent is clueless as to why this house will not sell.

Did you actually see and verify the comps?

It's been said that your first offer is usually your best offer. (Low balls aside)

I have listed fully remodeled flips before at a realtor suggested price and received offers that just take the wind out of my sails. Then I sit and drop and sit and drop and sit and drop.

One thing I notice with flips is that it's one of 2 things. It sells quick or you play the sit and drop game. Whatever.

Do other people see it as a rental house?

If it's more suitable as a rental than a owner occupant house, you'll end up dropping more.

Did you counter the buyers offers?

Roy AL. were you really thinking an agent would bust it for a sale of only 45K? Market or sell yours for so little income? NO Al they list it and forget about it-- let the MLS sell it.

NE,

I appreciate your insights into this strange situation. To answer your questions:

Yes, I saw and verified the comps.

Technically, this house is not a Flip house. I owned and rented it since 2012. It a great cash cow rental too.

I have countered all offers,...even the low ball ones.

No it doesn't change their perspective if they know it was a rental. What I mean is if another investor were to walk into that house would they say "This would make a great rental!"?

If another investors first impression is that it would be a great rental, you may be over priced.

First time home buyers are moving from rentals and don't want to feel they are moving into another one.

Also, it is a flip now! :)

Where the comps sold listings or listings for sale currently?

A house listed in my area for 45K would most likely be for an investor only.

Is this home a C rental or B?

If C this explains the 30K offers.

My point is that if an investor were to walk in there and say that the house would make a great rental, you may be better off targeting investors.

Ken,

I listed this house with an agent based on some very good advice from another poster here named NC Investor.

In hindsight, I wish now I had taken your advice and listed it FSBO. I was trying to avoid having to 'hold someone's hand' to get a loan, but it seems that may be the only way to sell this house for all cash.

My agency listing expires on April 15th. I will probably just rent the house out again and then do FSBO whenever this house becomes vacant again.

Ken and others,

This house that will not sell was first discussed in my January 23, 2018 post titled "FSBO or RE Agent".

Ken - You gave me some very solid advice in that post and I wish now I had taken your advice. I was hoping a RE agent could bring me a first time home-buyer which I thought this house would be perfect for. Unfortunately, the agent I chose does not seem to know how to 'sell the payment,..instead of the price'. Just last week, I had to explain this concept to her! (With a 10 year note, even at 9% interest, the monthly payment would be $200.00 less than the monthly rent!!!)

Dont't make me come down there !

Like I said, (in a Past Post)

get yourself 2 - FSBO Signs,

and advertise it. (create Buyer interest)

People Like to Negotiate with Private Parties.

This is Not a Big Shot Program ($34.900 - $45.00)

or Your Famous Line, "Rocket Science".

People are Buying Cars in that Price Range, Everyday.

As I look at possible buys, I often wonder why someone keeps lowering the price, especially in a short period. My mind says, what is wrong with the house? In your case it might be motivation to sell, but that may not be what the buyer (especially inexperienced buyer) sees.

In C houses, payment is important. That is how they think. It is something I forget, because I prefer cash, no payment, no interest. A lot of times I throw a low ball offer, just because that is what it is worth to me. But that is not owner occupied.

Hindsight is 20-20.

The listing is nearly over.

Once it is, do you want to rent it or sell it? If you want to sell it, while it is still fresh, plan to market it yourself. Make a flyer to post at community corkboards, grocery store, laundromat, etc. Put in photos, put the monthly payment in bold letters.

"$550 PER MONTH"

Roy,

Without knowing your market, it is pretty obvious that DEMAND is too low to create any interest - for right now.

Rent it out for the time being, until the tide changes.

RB said, "Don't make me come down there" !

Are you going to give me a spanking for not taking your advice,...? I probably need one,..LOL.

All I can say is "I am learning some new things here". I am an expert at Buying houses dirt cheap,..however, my experience in selling houses for Top Dollar (retail) is very limited.

I read through the posts and didn't see anything about curb appeal and staging.

I think those two things matter, especially for a buyer. Maybe find some persons similar to the ones you want to buy the house, and ask them how the house looks? Would they buy it?

As for staging, I just mean a SUV load of plants, lights, wine bottles, pictures and a few chairs.

Your house will sell, just not at the price you want.

Just having a Little fun with Ya, Big Guy.

Take a Crack at it. FSBO.

Besides learning something,

what else do Ya have to lose.

Roy since you had to explain a financing method to your realtor. FIRE HER immediately!!! Tell her she did not do you any good with your house and you want the house off the market today. Take the house off the market because NOW it is "shop worn", it's been on the market for too long and with multiple price reductions etc.

Is the house occupied by renters? May consider leaving it vacant. They really shouldn't know if it's a rental if it's vacant so I doubt that's it. Maybe it needs curb appeal. Renters are less picky about curb appeal than buyers.

Don't beat up your Realtor too bad. Commission on a $45,000 house is $1200 and that amount is split with the broker. Your agent may not be getting more than $600 out of the deal and that's before paying for all the photos, marketing, ads, etc. It doesn't leave much marketing money to play with. Maybe you should sit down with your agent and offer to chip in some marketing money or offer a bonus to the agent if you get an offer in 30 days. That may make up the difference. However, I suggest you look at the house from a buyer's prospective. Go visit the comps to see why yours isn't getting attention.

Ken,

At any selling price, I have to pay my broker $3,000.00. I am under a contract until April 15th. If I accept $30K now, I will have to deduct $3K and walk away with $27K,...and then pay Capital Gains tax since my basis is only $17K. This meets my definition of insanity.

I just checked my listing. It is still listed at $39,900 which means my idiot broker did not follow my instructions on the 2nd price drop.

I just going to wait until April 15th and then re-rent the house. For 30 days after the listing expires, I am still legally obligated to pay a broker's fee even if I sell the house myself!

Again, this past 60 days has been a real learning experience for me.

Anytime a house lists for less than $50,000, the RE commission based on a percentage, does not work for agents.

This is where agents work on a flat fee basis only. No agent is going market a house for any less than 6% of $50,000 which is $3,000. Plus, that $3,000 may have to be split 4 ways depending on who sells the house.

Roy - are people able to get a mortgage in your area/state for what you have it listed for?

Most banks here won't even touch them (although "Zillow" will still give them the mortgage price). Once the price gets to $40k-ish banks don't make enough money and just don't bother.

Charlie,

Yes, banks here don't generally write mortgages for less then $50K. However, it is not a traditional mortgage I am talking about here.

I am referring to a short term (5-10 yr.) loan a bank would make to buy a car with. Or maybe a Line of Credit would be enough to buy this house with. Forget traditional mortgage

and start thinking creative financing, which is something most agents here seem to be ignorant on.

If it has been on the market for 8 weeks with tepid or unsatisfactory results you need to take it off the market. It is already stale. Don't keep dropping the price.

Mortgages under $50K are almost non-existent and when they are the rates are much higher a) to make it cost effective for the lender and b) buyers at that price point are usually higher risk.

Send me your property address again and I'll see what the market absorption rate is for properties under $75K. It may be less about the house and more about your local market.

NC Investor - Good to hear from you. I still have faith in you and your advice.

Get Zillow on your screen. Type in: 1906 Adams Street, Gadsden, AL 35904

"It may be less about the house and more about your local market.'

NC Investor - I live in a county that has virtually no (or very few) middle class jobs. I am referring to career type jobs that would pay between $40-$60K a year. Where my rental houses are located, most people are renters and not homeowners. There is a reason for this.

The people in my town who make decent money, have good credit and can qualify for a mortgage, generally don't want to buy a house in a Class C hood,...they can afford to shop in Class A or B hoods.

So, when someone can't get a mortgage, then you are left with cash buyers only, and that usually means an investor or someone who has recently collected on an insurance settlement or someone who has stashed cash under their bed mattress for years,...and those people do exist here!

Al, it is not just agents "there" that don't get creative financing. I explain those concepts here to an agent I work with all the time...and he just doesn't get it either.

ROY:

Without trying to rant about your agent but if she even told you about the verbal offer she should have either told the prospective buyer it needed to be in writing or she could/would not mention it to you. A verbal agreement has no value let alone validity. If I recall in one of the posts above you haven't been receiving any feedback from the agents that showed the property. there are a few explanations for this: your agent barks at the agent offering the feedback (fairly common when they don't like what they are hearing),she isn't taking the calls or she is simply not representing you well.

I looked at your pix before. Overall for the price range I think it looks good but there are a few things that I would fix. The brown double door cabinet looks like it could use a good coat of paint, the missing piece of flooring in the BR needs to be replaced and the wall directly under the window near the kitchen also looks like the paint could use a touch up but that could just be the angle of the pix.

Based on your description of your community I would consider seller financing or an RTO. That may be the best way for you to sell it. Just know that you will still have the problem of the buyer being able to get a mortgage if you decide on short term financing due to the scarcity of mortgages for that amount.

Finally, I would talk to some of the agents who took buyers to see your house but I would skip the top producer. Chances are she is clueless about properties in your price range since the only way she achieved the number of sales and total sales costs are by selling properties well out of your target audience's range.

JB: Most realtors only work with pre approved buyers and they don't do the mortgages. Agents generally hand over prospects to mortgage brokers they work with regularly and let them handle those discussions both because they are not well versed and in many areas are not allowed to provide such advice since they are not licensed as mortgage brokers.

For the price you can rent it out for, it seems a nice piggy bank/cash cow for you.

A lot people are happy with 6-8% return on their money.. If you just need some money to deal with the HELOCs you have, why not use it as collateral and borrow at 6-8%?

On 20K 10% simple interest, your monthly payment is only $166.. Your tax is only $30/month. You are left with $500 to spend on yourself.