Selling a Whopper-Sized House in an Energy-Minded Market

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Posted: Jul 02, 2008 12:01 AM

Just three years ago, the wealthy surgeon and his homemaker wife built a mega-house with many flourishes -- including a dining room decorated in the style of the Palace of Versailles in France. The kitchen is a gourmet cook's dream, with multiple refrigerators and professional-quality stoves. Also, each of the home's seven bedrooms has its own marble bathroom and walk-in closet.

But final work on the 14,000-square-foot, energy-hungry house stalled after disputes over details erupted between husband and wife. A year ago, she filed for divorce and moved out. Now with the $4 million property nearly complete, the domestic court demands it be sold, with the proceeds to be split between husband and wife.

After much soul-searching, the husband realizes his colossal dream house was an oversized mistake because it felled his marriage. Moreover, both he and his estranged wife realize their place will now sell for less than they paid to build it. Still, they hope to contain their losses.

This story illustrates the issues facing sellers of jumbo homes in an era when bigger is not always better.

"The paradigm is shifting away from the big house, just as it shifted away from the big SUV toward gas-saving cars like the Prius. In this country, it's now considered gauche to flaunt that supersized house on the hill," says Sid Davis, author of "Your Eco-Friendly Home: Buying, Building or Remodeling Green," due out later this year.

Of course, numerous homebuyers -- such as those with several children or elderly parents in their household -- still relish a big residence. But the rising cost of home utilities is just one reason that fewer buyers are now interested in large houses, especially those over 7,000 square feet. Many also fear the cost of rising taxes and upkeep for a mammoth property.

Succeeding with the sale of a very large house in the current real estate market means you and your listing agent must set a realistic price for the place, which is likely to be less per square foot than more modest homes nearby. It also means you must market strategically to a shrinking group of big-home purchasers.

"You've got to accept that there are limited buyers in your pool and you'll have to fish in that small pool," Davis says.

Here are several pointers:

Go international with your marketing campaign.

It's no secret that the U.S. dollar is now weak against many other foreign currencies, especially the euro. This makes anything sold in U.S. dollars -- including real estate -- seem cheap to well-off people in other countries. Also, rising oil prices have enriched numerous families in oil-producing nations, giving them extra funds for discretionary investments.

Could your large home appeal to bargain-minded purchasers from abroad? It's not inconceivable, especially if your upscale place is located within or near a cosmopolitan city or in a popular resort area, says Leo Berard, charter president of the National Association of Exclusive Buyer Agents (www.naeba.org).

"The Internet has made selling to foreign nationals more viable," Berard says.

The globalization of real estate sales has intensified interest in the field within the membership of the National Association of Realtors. By going to the organization's Web site (www.realtor.org) you're likely to find agents in your area who have earned the designation of "certified international property specialist."

Create a Web site dedicated to the sale of your home.

If you're trying to sell a large house that you bought for a hefty sum, Davis says it could be worth investing the several thousand dollars it costs to obtain a professionally designed Web site for your place -- one that showcases your property to purchasers both in the U.S. and elsewhere.

Once your Web site is available, how will you drive traffic there? Davis recommends that you and your listing agent invest in sophisticated advertising in newspapers or magazines which reach affluent audiences. Your agent should help you identify a Web site designer and the appropriate media outlets for your ads.

Talk up any energy-saving features installed in your property.

Does your house have extra insulation or high-quality double-pane windows? Does it have "zoned" air-conditioning and heating systems, so that individual rooms or whole sections of the house can be shut off from cooling or heating when they're not in use? Do you also have energy-efficient appliances?

If so, these are among the features you and your listing agent should highlight in your marketing materials, Davis says.

He encourages you to have a rider attached to your For Sale sign advertising your "energy-smart house."

Provide contractors' estimates for energy-saving improvements.

Perhaps your huge house was constructed with little attention to energy conservation and you've done nothing to change the situation. Then how can you assuage the fears of potential buyers who worry about whopper-sized gas and electric bills? Davis suggests you call in contractors for bids on energy-saving work, such as new windows and attic insulation. Then provide these bids to prospects, so they'll know how much it would cost to retrofit your property to save energy. Also, give them copies of your recent utility bills.

"Seeing these facts in black and white will keep buyers from dwelling on exaggerated fears about the cost of owning your place. This could go a long way to promoting the sale of your property to that shrinking segment of the market that still wants a huge house," Davis says.