Expert, localized Los Angeles answers provided by Heather Roy

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Brothers Won't Sell

  My brothers and I inherited a large home in Naples Florida. Two of my brothers who are executors of the estate interviewed several realtors and hired the realtor who gave them the highest estimated selling price. After several months with no sale the they rejected the realtor's advice to lower the price. They are convinced the right buyer will come along and pay their asking price. I have been begging them to drop the price and sell before the market erodes and decimates our inheritance. What can I do to convince them they are asking too much for the house?
 
 

The value of the property is set not by a broker or by the sellers, but by the buying public.  If the listing has been widely exposed through a multiple listing system and the Internet, then it's clear the buying public has decided it's not worth the asking price. 
The executors should add up not only the carrying costs of the property every month, but also the lost income from the money you are all keeping invested in it.  That's known as the opportunity cost of holding the property and it's a figure that investors pay attention to.  It's additional money you're losing every month.
I don't feel much sympathy for the agent who gave that inflated price recommendation -- some agents do that just to get the listing from a naive owner, figuring that after a few months the market will bring them to their senses.  Serves the broker right if they get caught investing their time, effort and advertising money at a useless asking price.
As an heir you do have some legal recourse, but I'm sure you don't want to invoke that and stir up hard feelings in the family.
As for "the right buyer coming along" -- if that right buyer sees something similar listed at a lower price, that's what he'll buy instead.  I expect that's what's been happening all along.  Nobody is going to pay more if they can buy substatially the same thing for less. 

    Edith
Originally published on February 17, 2008
 
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