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Old 02-27-2012, 11:18 AM
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Trying to Sell a House Without a Basement - Are We Completely Screwed?

Mr. Ipsum and I decided in November that we wanted to have a new house built, as we could afford it, and wanted something larger and newer. Our builder provided a deal where they would pay our old house's mortgage for 5 months after the new house's closing date if we hadn't sold. We figured that would give us plenty of time, as we were planning to not actually have them start the house until January, to aim for a closing date of late April.

The house hasn't sold yet and Mr. Ipsum is panicking, and now it's starting to rub off on me. At first, we were both confident that the house would sell, as we put it on the market in November, and have until September until we'd have to start paying the mortgage again.

Our house is in a very desirable location, and is in good shape considering it is 62 years old. But there are 2 problems - it is small and doesn't have a basement.

When he bought the house in 2004, we were dating but not yet married or living together, but I came with him to look at the houses. This was the one we both liked the best, as we liked the "look" of it, and it was in better condition than the other houses we looked at. Neither of us grew up in houses with basements, so it wasn't even something we considered. During the past 7 years, we have made significant improvements that we were assuming would increase the value, most importantly a new roof, chimney, and ceiling in the living room.

Now I'm wondering if we made a terrible mistake in choosing this house. The first few people who looked at our house in November had made comments along the lines of "too small and too expensive." I kept pestering Mr. Ipsum to lower the price, as I think he was asking too much. He said he was doing this because he knew people would just make lowball offers anyway. But he did lower the price eventually.

We didn't have much action in December/January, which is understandable due to the weather and the holidays. The people who have looked at it lately haven't commented negatively on the price, but they have all said that it was either too small or the lack of basement was a dealbreaker. We have had 2 open houses where a lot of people came through, but no offers. At the last open house, we did get some interest - a woman who came by herself, who was looking for a house for her father. She actually came back later with her father to show it to him. But we didn't get an offer from them.

We are going to lower the price further next week. Our realtor thinks that this next reduction will make a big difference, as it puts us in the next lowest price bracket (as in, it puts us within the next 10,000 lower bracket, if that makes sense). This is actually the price he recommended we go with back in November. So I'm hoping that he knows what he's talking about and that this is actually an appropriate price for a home without a basement.

Are we totally screwed? I looked up the listings for other houses in our area. Every damn house, except one, that's for sale in our town has a basement. Since they are so common in this area, I think we are going to be stuck with it forever.

We are actually investigating what the consequences would be if we back out of buying the new house. Mr. Ipsum thinks we will just lose the deposit and the homebuilder will just put it on the market and sell it to someone else. I don't think it will be that easy, somehow.

All this stress is negatively affecting my life. I can't sleep, can't concentrate on work, am crying all the time.

Any advice? Is there anything we can do to make the house more desirable, short of taking a loss on the sale? Is there anyone out there who doesn't care about having a basement in their house? We were hoping that maybe an older, retired person might like our house if they specifically want something small and don't want to go up and down stairs. But so far, this person hasn't materialized.
#2
Old 02-27-2012, 11:27 AM
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Quote:
Originally Posted by LaurenIpsum View Post
...This is actually the price he recommended we go with back in November. So I'm hoping that he knows what he's talking about and that this is actually an appropriate price for a home without a basement....
I think you should have listened to him back in November.

You may not be in trouble, but to be honest I don't think I've ever seen a house in Canada without a basement, due to frost heave issues. I see you're in Buffalo, which might as well be Canada.

Having said that, things usually pick up in the spring as far as housing sales go, I believe.
#3
Old 02-27-2012, 11:40 AM
Just Lovely and Delicious
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Whole swaths of the country have houses without basements.

I grew up without a basement and I'm not a fan of mine. I definitely didn't buy because it had a basement, and I've sunk so much money into the stupid thing. Grr.

Your problem is probably not lack of basement but lack of space. Do you have enough land to build out the house if someone wanted to?

Listen to your Realtor. They know the area - not us.
#4
Old 02-27-2012, 11:48 AM
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It sounds like your house was overpriced for the first 5 months of the listing. Unfortunatey, now that you are down to the "right" (hopefully) price, you have the stigma of a house that's been on the market for some time. Buyers will assume that there is something wrong with it, and you will probably have to lower the price more to compensate.

Last edited by Lightlystarched; 02-27-2012 at 11:48 AM.
#5
Old 02-27-2012, 12:11 PM
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I agree with the others that say your house has likely been overpriced. Whatever the size of your house, it isn't too small in some sort of absolute sense, it is too small for the price. The people in your previous price range were expecting something bigger and the people who would find your house "just right" haven't looked at it because it is out of their price range.

As far as backing out on your new house goes, bring your contract to a lawyer. I am sure Mr. Ipsum is a wonderful at whatever he does for a living, but if you want to sleep better at night some expert advice is in order.
#6
Old 02-27-2012, 12:19 PM
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The lack of basement isn't the problem, the price is the problem. It sounds like you are pricing the house as if it had a basement. Features are almost never a dealbreaker, price is. I can say this with confidence because features are always accounted for within the price. If a basement is worth 40% of the houses value then you need to be priced 40% below the basement having competition all other things being equal. It's really that simple. What you want to get for a house is always completely irrelevant. You should have trusted your Realtor from the start and once you've priced the house fairly with respect to it's shortcomings it will sell. You'll probably lose money on the purchase since the market is still depressed, but so is everyone else. Previous notions of how the real estate market operates were fictional. In no way are you entitled to "build equity" in a home, you house can depreciate just like a car and it's only worth what people will pay for it.
#7
Old 02-27-2012, 12:23 PM
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I view basements as very desirable, but grit my teeth and bought this house many years ago because there was little on the market with a basement. I think the utility of a basement depends on lifestyle.

Spring and a lower price may bring a buyer. One way a realtor earns their commission is proper pricing.
#8
Old 02-27-2012, 12:25 PM
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A basement isn't a necessity. But it increases the value of a house of the same size above the ground over a house that doesn't have one. So this problem, as everyone else has said so far, is about pricing.

One floor houses have always had a niche in the market because some people don't like stairs. But most people will look at it as a factor in reducing the price of a house.
#9
Old 02-27-2012, 12:31 PM
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If it helps, I specifically looked for a house without a basement. If I had one, I'd just fill it with crap that should've been tossed out, and then I'd sit around stressing about getting it cleaned out one of these days. So...there are people out there who don't consider a lack of basement a dealbreaker.
Definitely listen to your realtor pricewise and any other advice he may have. He's got an interest in selling your house, after all. Good luck--hopefully things are picking up in the market now.
#10
Old 02-27-2012, 12:33 PM
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Quote:
Originally Posted by Lightlystarched View Post
It sounds like your house was overpriced for the first 5 months of the listing. Unfortunatey, now that you are down to the "right" (hopefully) price, you have the stigma of a house that's been on the market for some time. Buyers will assume that there is something wrong with it, and you will probably have to lower the price more to compensate.
Exactly. You have a stale listing now, which is probably why your agent tried to get you to price it right out of the gate. The lack of basement is not a dealbreaker per se, but not having a basement and not having a price that matches not having a basement is.

One thing to think about is that dropping the price to what might seem to be too low might be a good idea if it gets you the sale - you have to take making mortgage payments again into account soon.

I also wanted to say that we sold a house that could have had a dealbreaker on it (a big power pole in the backyard that prevented putting up a garage), but it sold very quickly because it was priced right.

When we sold our house and bought another house three years ago, that was about the most ongoing stress I've ever had in my life, so you're totally not alone in feeling stressed by this whole thing. Our house sold at its first open house, and it was STILL hugely stressful, so yeah, this is a very stressful thing to do.
#11
Old 02-27-2012, 12:56 PM
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Quote:
Originally Posted by LaurenIpsum View Post
We are going to lower the price further next week. Our realtor thinks that this next reduction will make a big difference, as it puts us in the next lowest price bracket (as in, it puts us within the next 10,000 lower bracket, if that makes sense). This is actually the price he recommended we go with back in November. So I'm hoping that he knows what he's talking about and that this is actually an appropriate price for a home without a basement.
Why didn't you listen to your realtor in the first place?

Speaking as someone who has snagged a house after repeated price cuts, the message you have sent is "we overvalued our house, didn't listen to our realtor, are getting nervous and are now desperate". People bidding now know you will take less, your morale is affected and that you're vulnerable. Many people now view your house as worth less than it may actually be, simply because of the multiple price reductions. Everyone can see on the various websites that exist when and by how much you've reduced the price.

And, like others have said, it's now stale.

The only thing I can recommend going forward is to spend $300-1000 hiring a home "stager" and taking their advice to heart immediately. The stager will cost a few hundred and their changes/changes into effect will cost several hundred more. Maybe change the miniblinds, maybe get the clutter off the kitchen counter, whatever it is, listen up.

If you have pets, get someone who doesn't have pets to come over and see if they can detect you have pets. If you can, take the necessary steps to make them invisible -- smell wise, food and chew toy wise, etc. Get the carpets steam cleaned (truck mounted), make everything hospital-grade clean and provide surgical foot coverings for people entering your house. Get the hard surface floors in good looking shape as well.

And in the future, don't let your husband's pride get in the way of a few thousand dollars.

Last edited by lindsaybluth; 02-27-2012 at 12:57 PM.
#12
Old 02-27-2012, 01:01 PM
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I don't want to make you feel even worse, Lauren - it's just that it looks like some errors in judgement were made, and now you might have to make some hard decisions to make up for them. I do wish you all the best for selling your house - hopefully you and your husband and your realtor can come up with a plan to get it sold ASAP.
#13
Old 02-27-2012, 01:20 PM
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Quote:
Originally Posted by LaurenIpsum View Post
...
When he bought the house in 2004
...
Is there anything we can do to make the house more desirable, short of taking a loss on the sale?
The majority of people who bought a house in 2004 are taking a loss selling it today (or any time in the past 4-5 years). You can't get hung up on how much you "deserve" for the house. The simple truth is that housing values have gone down significantly since 2006-2007, and you're facing the wrong end of that equation.

The positive thing is that you're probably getting a much better deal on the new house than you would have otherwise.
#14
Old 02-27-2012, 01:53 PM
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Basements aren't counted in the square footage of the listing, but they are real space that people can use. Even if you don't have fancy finished rooms, you put the laundry, storage, exercise equipment, workspace, etc. down there, instead of in your "living" space.

"Lack of basement" and "too small" are basically the same thing, because folks in your area expect a basement* and without one, have to cram all their crap into the main area.



*It's expected in the North because you have to put in a deep foundation anyway, may as well dig out the whole space and pour a concrete floor, rather than fill it all back in with dirt, and have nothing to show for it.
#15
Old 02-27-2012, 02:09 PM
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I grew up in Buffalo, assuming that's the location then here's my $0.02. Yes, most houses have basements. But the area has a disproportionate number of older folks and older folks generally don't like stairs. I suppose if you're house has two stories then there's still stairs to deal with, but 2 stories is still less stairs than 2 stories+basement. At the very least it means they're not going up and down 2 flights of stairs to take the laundry from the basement to the bedroom.

But otherwise I agree about the pricing. It sounds like it's a house that's for older folks or a starting-out single person, and both those groups aren't just going to be looking at houses, they'll also be thinking that they can always just rent for a while.
#16
Old 02-27-2012, 02:22 PM
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A house doesn't need a basement. Many houses don't have them for various reasons -- construction cost, high water tables or too much bedrock are some of them.

For every property, there is a value at which it will sell. It sounds like you have an inflated opinion of what yours is worth.
#17
Old 02-27-2012, 02:29 PM
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OP, I assume you've had a market analysis done and an appraisal? That you've checked the value on Trulia/Zillow and seen what their estimates are? And priced it lower than all of those values?
#18
Old 02-27-2012, 02:44 PM
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Thank you for all the comments. To answer a few questions:

My husband is the one who owns this house. So I (wrongly) let him take the lead on getting it sold, and assumed he knew what he was doing. Unfortunately we have a bit of a dynamic in our marriage where he can be very stubborn and set in his ways, where he is right and everybody else is wrong, and he loses his temper easily - whereas I am more reserved and like to keep the peace, and I often let him have his way to avoid an argument (he has never been physically violent, he just has a short fuse and gets mad easily). I have a very hard time getting him to listen to reason once he has an idea in his stubborn head. Maybe not a recipe for the most functional marriage. I do realize I need to be more assertive and take a more active role in financial decisions - I have learned that now. Anyway, I'm getting off on a tangent here...

When he came up with the initial selling price ($X), he told our realtor and he was fine with that. It wasn't until a few viewers started making comments about the price being too high, that he went back to the realtor and said, "What do you think, is it really too high?" And that's when the realtor said, "I really think you should be charging $Y instead." Where $Y is the price that we are going to start using now.

Luckily, we have had a professional staging expert. She was provided by the home builder, who have an interest in getting the house sold since they will be paying 5 months of mortgage if it doesn't. We have followed her advice to the letter - removed all clutter, personal items, put lots of furniture and other items in storage, keep the house immaculate at all times, etc. I also bake bread before we have people coming over, even though that whole idea that the smell helps may just be an old wives' tale. And luckily I work close enough to home that if we get someone coming on short notice, I can run home and turn up the temperature, light scented candles, do a last-minute dusting, etc.

Personally I would be happy lowering the price to an obscenely low amount just to unload the thing. But unfortunately it's not just my decision. However, my pestering Mr. Ipsum may have done some good. We IM each other at work sometimes, and he just informed me that he had emailed our salesperson for the home building company to get his opinion on the price and lack of basement. This guy used to be a home seller too, and has already given us some advice with regard to selling, and my husband seems to trust him a lot. Maybe if both of us tell him the same thing, he will listen.

Also, I think I want to probably nip this in the bud as I think reading too much about this is not helping my stress level. I do appreciate the replies so far, but I don't think I will be back to read any more of this thread, so moderators, you can feel free to close it, thanks.

Edited to add: Yes, with this latest price drop we will be $4000 lower than Zillow. Hopefully that will help, although I've heard conflicting opinions about how Zillow's prices are sometimes inflated.

Last edited by LaurenIpsum; 02-27-2012 at 02:45 PM.
#19
Old 02-27-2012, 02:49 PM
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So no market analysis, appraisal, or anything resembling a real, professional opinion on the true value of the home. Simply a realtor's and a home builder's opinions.

I'm pretty sure that the home is *yours* too, unless you had a prenup. Why you're taking such a back seat in such a large financial matter is something else entirely and doesn't really address the issues of "what is the lowest amount we're willing to take" and "what is our peace of mind worth exactly to unload it so there's not a double mortgage payment" and "why aren't we lowering it to below the original value they suggested in the first place so that it's priced to move".
#20
Old 02-27-2012, 03:33 PM
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What's a realtor if not a professional?
#21
Old 02-27-2012, 03:50 PM
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If you had to rent the house out for a while would the local rent cover the existing mortgage? could you still qualify for the "new" mortgage if you did that?

Is the laudnry room on the top floor? If so, make sure that's in the ad. Also, do you have a soaking tub? If not, is there room to add one in the Master bedroom?

Can you add a large shed in the back to make up for the storage space lost by not having a basement?

Just trying to come up with options for you to consider, in case you haven't already. . .

Last edited by TruCelt; 02-27-2012 at 03:51 PM.
#22
Old 02-27-2012, 05:28 PM
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Originally Posted by Zsofia View Post
What's a realtor if not a professional?
Their skills do not lie in market analysis. Their whole goal is to facilitate buying and selling. The action is what they seek; a 10 or 20k difference in price does not really affect their bottom line.

Quote:
Originally Posted by LaurenIpsum View Post
Edited to add: Yes, with this latest price drop we will be $4000 lower than Zillow. Hopefully that will help, although I've heard conflicting opinions about how Zillow's prices are sometimes inflated.
Right, that's why I included market analysis and appraisal, choosing the lowest of the 3. Information that you pay for = vastly superior to information you do not.

Luckily for the OP, there's a sucker born every minute. I saw in the paper not long ago that some idiot paid 15k more for their house (that was on the market when I was hunting that I passed up) than I did with 15% less space on a noisier street and zero upgrades (I've got a whole new kitchen, bath, appliances, doors, flooring (hardwood and carpeting).)

Last edited by lindsaybluth; 02-27-2012 at 05:28 PM.
#23
Old 02-27-2012, 06:39 PM
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You could always bury a statue of St. Joseph! My boss swears this helped her sell her home. And I agree with the others...the lack of a basement is not the problem.
#24
Old 02-27-2012, 07:00 PM
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You're no more screwed than anyone else out there trying to sell at the moment. It's just hard as hell to sell right now.

I just bought a house in November; we started looking in August. It's a HUGE buyer's market where I live and we knew that going into it, so we shopped around. The house we ended up buying was the 3rd we made an offer on ... the first 2 had crazy owners who thought they were going to get full price for their house.

So ... unsolicited advice time ... the first offer is probably the best offer you will get. If you get an offer, take it and work with it. When we tried to buy house #2, it has JUST gone on the market, we were the first to see it, we loved it and made an offer the next day. Negotiations eventually broke down because they appeared to think "eh, we're getting offers this quickly, there'll be someone else who wants it more."

Ask me if that house is still on the market. Why yes, yes it is.

If house hunters are anything like me up there, there may very well be people keeping an eye on your home. I would look at listings a little out of my price range and check now and then to see if the price went down -- if I saw the price going down, that told me that the owners were getting antsy. One thing I never did was assume that a house that had been on the market for a long time was undesirable -- buyers are picky as hell when houses are plentiful.

I understand if you don't want to but I'd love to see your listing. I was SHOCKED at how shitty some of the listings were down here! Halfassed, out of focus pictures, lame descriptions, etc.

Also ... are you offering any concessions in your listing? Carpet allowance, paint allowance, closing costs, etc.? Closing costs were a dealbreaker for us so we compromised with the owners ... we ended up offering 5k than their rock-bottom price and in return they handled the closing costs -- worked out great.

As far as the basement thing goes -- meh. We specifically wanted a 1 story house (which was surprisingly hard to find, almost everything down here is 2 story). We'd have considered a house with a basement but it definitely wasn't on our "must have" list. So many things can go wrong with a basement I'm kinda glad we don't have one.
#25
Old 02-27-2012, 08:19 PM
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PandaBear has it right. It's a buyer's market. I stalked my house for six months, watching the price drop $50K, before we really even started looking at it seriously. We made the offer when the previous owners were following their moving truck to North Carolina. Too many people overprice their houses in this market. With the house we sold, we priced it at what the realtor suggested and still ended up selling it for almost 10% less than what it was on the market for, in a desirable neighborhood and with traits that most houses in the neighborhood didn't have, like a second bathroom and a two-car garage. The market is good, and you've already made an error that puts you at a disadvantage. But there may be people out there stalking your house. The suggestion of a storage shed isn't a bad one--what you need to do is know your house's flaws and do your best to fix them.
#26
Old 02-28-2012, 09:13 AM
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Since the OP has indicated she doesn't plan to return to the thread, I'm closing it now. There's been a lot of good advice regarding house selling and buying, so thanks to everyone who offered it.
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