This is a continuation of my 'bubble post' which myob thought was junk and a waste of time. I am about to do something today that I have never done before. I am going to list my primary residence at an inflated price just to see what happens. I have always told people (agents) that I will sell any RE I own,...if the selling price makes it worth my time to deal with the hassle of selling, finding another similar house, and then moving.

My primary residence is a 1970's vintage 1,600 sq. ft 3/2/2 brick rancher. I have a 12 x 24 ft. shed in the backyard and a 24 x 30 boat house also. My house is 'on the river' and it is this one feature that makes my house more desirable than other houses nearby that are NOT 'on the river'. Riverfront lots here with deep water, which are in very short supply, sell for about $75 -$100K here depending on how deep the water is at the bank. Some lots here are so shallow you can't launch a boat on.

In a normal market, my house would sell for about $225K based on what other similar houses that have sold for here in the last 10 years. House across the street, almost identical to mine, sold for $230K just 6 months ago. House next door sold for $190K but that was 6 years ago in a 'down market'.

Read carefully here. In the last 10 years, 5 houses (next door and across the street) have sold in low $200K. The elderly people who bought these houses did not move in immediately though, they literally gutted the house completely down to the studs and turned around and built their retirement 'dream home'. The net effect of this is my neighborhood in the process of being converted from a Class B hood into a Class A hood. My old $200K neighborhood is now being converted into a $400-$500K neighborhood only because people with deep pockets (cash too) are moving here to retire. I am 63 and I am still the youngest homeowner on my entire block!

Today, I am going to list my house just to see how bad someone else wants my house and my deep-water riverfront lot. I have decided to list at $349,500 and I told the realtor that I will not discount the price nor will I pay any closing cost. Remember, I don't have to sell, but I will if the price is right.

What do you think will happen here?

I think I'm with Sisco, except I can attest that living on the water isn't all it's cracked up to be. After awhile, it's just what you see everyday. So Roy may not miss that river, depending on where is there.

Sisco,

My 'dream house' is actually 1 mile from here and that house sits a 4 acre lot but it is not for sale right now. But I at least know what I will be looking for! The thrill of living in a house on a riverfront lot wore off years ago and so I am over that. Being near the river but not on the river is just fine with me now.

If my house sells, I can always move into a one of my nicer rental houses (I may have ask someone to move out) and then wait for the market to get back to normal and then hire a contractor to build my 'dream house' starting with a virgin 3-4 acre lot instead of gutting / rehabbing an existing house on a 3/4 acre lot.

My place on the river is the most relaxing environment you can find ... until those stinkin' carp bow hunters with their flood lights appear about 2:00 a.m. I cannot imagine selling, for any reason or price.

Roy, do you have one of your other places where you can move for 2ish years until you can purchase another home for yourself when/if property values drop? Can you get one now and rehab it to suit your life - at 63, current and future?

Also, don't say you won't pay closing costs. Figure how how much you want in your pocket and if you need to pay costs to make their loan work, that's okay as long as you can bump the sales price up to cover the costs.

Nicole,

When I sit on my 16 x 24 ft deck and looking toward the river at sunset, the view is breathtaking. My house, which needs a major rehab, is nothing special but the VIEW of the river is what 'sells the house'. This is the reason I bought the house in 2003 for $142K which was $25K under market back then.

We don't have any 'stinkin' carp bow hunters here,...we have major BASS fishing tournaments here. Brand new $100K bass boats with 300hp Merc engines that move down the main channel at 80mph!! Why pro fisherman need to drive so fast on the water is a mystery.

You lost me at "needs major rehab".

Get ready to move as someone from CA will be happy to buy it.

Go for it. The worst thing that can happen is it doesn't sell, which is where you are at today if you don't list it.

We real estate investors see homes differently than average Joe homeowner. To them, it's their "dream." To us, it's just another investment in a long string of investments. Movies like "Father of the Bride" try to make it seem like there's some loyalty owed to a house because your kid learned to ride their bike in the driveway and fell down and had a few boo boos. Meh, just some Hollywood tripe. If someone offers your $1 million over asking price for your house, you'll see it. Doesn't matter who did what there.

So our advantage is we don't have to be offered a ridiculous amount of money to sell: no, a handsome return is often sufficient. Go for it and see what happens. Keep us posted!

Roy! You wrote: If my house sells, I can always move into...

I'm with everyone else - I think your home is under-priced. Not sure where in AL you are, on which river, but I bet you could list the home for $50K or even $100K more and STILL have people making offers.

I would agree that the $349K is the starting price, and that you should expect to ask for "highest and best" once a few offers come in.

yea Roy take the heat off yourself. Generic questions about "Bubbles" like we're all some BIG TIME/BIG SHOT INVESTORS. OH and lets not forget "sophisticated". BUBBLE what a MAroon!

I think you got the point.

Roy, I'm not sure what homes are selling in your area that will need a complete remodel. 1600 sq. feet is $218.43 a foot. Then add the gut out and remodel the buyer would be over $300.00 a foot.

A buyer can build a nice new custom home for that price in my state.

California, buyers are not the same buyers as in 08, they now have the internet to do their own comps on Realtor. com

and other sites.

Also, buyers that are paying cash will ask for appraisal.

Keep us updated.

Sid,

I agree with you. I do not get emotional about any house that I own, even the one I live in. It is all business to me. In the past, whenever I sold a primary residence and moved up the ladder, my net worth always doubled.

my question as posted many times here:

Ken,

Your reply is exactly what my agent is predicting,...a bidding war that just goes nuts! (She has seen it happen with other river front listings of hers). However, this bidding war needs to begin at $324,900 and not my $349,500 number.

so $22,500.00 is not enough to do it yourself? If the market is so HOT one open house Saturday-- done and done. Earnest money to ATTY. application by purchaser close in 30 days.

That $22,500 broker fee may end up having to be split 4 ways. It is more likely the buyer's agent will bring the buyer. I do agree that $22,500 is a little steep but hey, it is what it is.

myob, thank you again for stating your process. I am with Ken though in that I do not like dealing with people that much.

Yes, be careful that you do not pay a commission when they bring a buyer at that price ready to buy! All they have to do is comply with the terms within the "4 corners of that contract". Ready, willing and able.

The agent just left. I had it written in the contract that I did not have to accept any offer, even the list price or any other other offer above the list price.

Be careful. In our area, buyers are laying down contracts at or above list, knowing that if they negotiated, they'd be passed over. Once they get the contract signed, they use the time to try to find everything possible to reduce the price. Prepare for the haggling to start during the option period.

Also, some buyers are just signing contracts even though they aren't totally in love with the house, and are still looking for another house they like better, but something is better than nothing, and they'll cancel the contract once the better option comes along and under contract.

"WHY WOULD AN RE INVESTOR LIST WITH AN AGENT?"

Worse case scenario is I don't get the offer I want and decide not to sell, but that is not a big deal since it saves me the hassle of moving.

Now, what I will get out of this is getting an idea of what my house is actually worth in this inflated market. I already know what it would sell for in a normal market but knowing what the peak looks like for my house (highest offer) would give me information that I can use to sell my house on another day,..maybe even FSBO !!

Roy A couple of questions if I may. Was the $349500 a result of your idea of what the 5 houses (next door and across the street) or worth after there were fixed up?

Did the Realtor agree with your price?

Id think if you are not really interested in moving then your dream price should be higher. 400k sounds more like a base. Won't all the time and effort to relocate be a big time sink, you're not accounting for?

Also then you're not wasting anyone's time. If the agent gets a big fish then you can reel them in, but why go through a feeding frenzy. All it tells you is the price now. Price will change and if you sell too early in the neighborhoods transition you leave money on the table. Would your lot sell for more if the house is demolished and cleared for redevelopment?

PG,

Okay, my higher asking price was based on the fact that I owe $45K on my current mortgage and I want to walk away from the closing table with a min. of $300K.

The Realtor thinks the coming bidding war will start at $324,900 and yes that is her number. The contract was signed today at her lower number instead of my higher number. Again though, I can refuse any offer I choose to even one made at the lower list price. No one can force me to sell my house just because it is listed for sale. Again, I want to walk away with $300K because that is the average price of the houses I will be soon shopping for as my next residence.

If I had a place on your river, I

2 OBSERVATIONS Roy. #1. I would like to walk from closing with 1M so I'm asking 1.5M?

#2. 99% of people will need a loan. So your asking 50K over value-- do you think your appraisal will bring in that value? or maybe your cousin is the appraiser?

People with cash aren't just handing over 300K cause THEY like you. People with money don't throw it around-- read the Millionaire next door.

Myob,

I have attended well advertised house auctions where people with deep pockets bring cashier checks to the auction in the amount of $500K. Money to them is like a 'toy',..something to play with and have fun with.

Many years ago, there were homeowners who would put FSBO signs in their front yard, just to see what type of offers they could get even though they no real intention of actually selling their house. Also, landlords have been known to do the same thing with rental properties,..post fake rental Ads on Craigslist just to test the waters to see how much rent they could possibly get.

That is really what is going on here, even though I am dead serious about selling my house if the 'price is right'. For me to walk away at $300K, my house will have to sell at somewhere near $390,000. Now, my agent thinks that if she brings me an offer in at $350K,...that I will change my mind and accept it, however, that would net me a lot less than $300K. The brick ranch house 2 doors down from me and which had more 'river view' than mine does,...that house sold for $450,000 just 3 months ago.

I'm always surprised at the different prices around the country. A house like that here would be so much more!

Good for you, Roy for taking the plunge!

I'm interested to see how you do.

Inquiring minds want to know?

Sandy,

One reason house prices vary greatly from one city to the next revolves around the local economy. My small city has always been a blue collar or working class town which in turn determines how much income people can afford to spend on a house.

Homer,

I wanted to list the house at $349,500 but my agent kept saying that $324,900 was the right price. Agent said there will 3x more lookers at her lower price instead of my higher price. Also, the agent is expecting a bidding war to break out which will push the selling price to go way beyond the lower asking price.

I made it clear to my agent that I needed to walk away with $300K and that is AFTER my $45K mortgage gets paid first.

Homes, especially on the water, are selling within 3 days of listing. Because of the speed that homes are selling there is a minimum of work for the agent and because of that our Realtors are offering a 3 percent commission. Because realtors want your business, in the last few months commissions have dropped first from 7% to 6 to 5 to 4 and now to 3%.

I do hope you negotiated the commission. May I ask what percentage your Realtor is charging?