April 06, 2008 | The Hartford Courant - The home is in historic downtown Farmington, Connecticut, a 10,000-square-foot mansion built in 1917, with a 2,000-square-foot pool house overlooking the Farmington River.
It was listed for sale in 2005 with a $9.8 million price tag.
Then it was reduced to $8.8 million.
Then reduced again.
And again.
And again.
Now, almost three years later and still on the market, the home has an asking price of $5.695 million -- a more than 40 percent reduction.
How do you overprice a house by millions?
Actually, it's not that the home isn't worth millions. The difficulty is that the home is unusual.
Its style is reminiscent of a small Newport mansion, with silk fabric on the walls, ornate fixtures and lighting, even original details like a hidden bookcase behind oak panels in the library. And while picturesque, the home isn't situated among other multimillion-dollar mansions. Some nearby homes on Garden Street are modest, worth far less than $1 million.
"It's so hard to price a home when there are no similar houses nearby," said Rob Giuffria, a broker at Prudential Premier Homes who specializes in highly valued Connecticut homes and who is familiar with the property. "One of the tenets of valuation is looking at similar houses across the lawn or down the block. When there isn't any, you're left looking farther away for similar homes, and that doesn't always work."
It's almost always a challenge to price unusual homes -- either because of their location, their size or their style (think a log cabin in an urban setting). But that pricing process becomes more difficult in a slowing market, when valuing even average houses becomes tricky as prices spiral downward.
That was certainly the case for Josh Livingston, who is selling his 3,700-square-foot house in Simsbury. The newly constructed home, with five bedrooms and three full bathrooms, is made to look like a historic Colonial-style house from the outside, but with all the modern conveniences inside.
Livingston said he was well versed in the mechanics of pricing a home: First look at comparable home sales in the neighborhood, consider the condition of his own home, and add or subtract for upgrades or problem areas.
So he was stunned when two real estate agents recently evaluated his house.
One suggested a list price of $799,000.
The other suggested a price of $899,000.
"I was shocked," said Livingston, who is selling because of a job relocation to New York. "This is a unique house on a unique street, and I wouldn't have been surprised if they were off by ten to twenty thousand. But $100,000 is a big difference."
Livingston just put the house on the market, as a for-sale-by-owner, at $849,000.
Jennifer Trautman, an agent with Connecticut Prudential Realty in Madison, said pricing an unusual home is sometimes like being a fisherman.
"If you are finding you're not catching any fish because the price is too high, you have to lower the price to where the fish -- or the buyers -- are," she said.
Trautman has been fishing for more than two years for a buyer for basketball player 's house in rural Durham, which was originally listed at $5.995 million. The home is now on the market for $3.799 million -- a drop of 37 percent.
The 12-acre property includes the main house, a 9,300-square-foot Georgian brick colonial with six bedrooms, five baths, five fireplaces, a billiard room, a two-lane bowling alley and a basketball court located in a guest house.
"It's difficult because there's nothing else like it around. You can't compare it to what's for sale in Durham," Trautman said. "We have to look at other large estates in places like Old Lyme and Madison, but those estates are on the water or with a view of the water. All you can do is compare it to other properties that are similar and adjust the price if it doesn't sell."
Trautman said that after the price of Baker's house was lowered, more fish -- or potential buyers -- started tugging on the line.
"When you lower the price you attract a different range of buyers," she said.
Giuffria said sometimes the hardest part of dealing with unusual homes is not pricing the house, but convincing sellers their property is not worth as much as they think.
For example, Giuffria said last year he listed a home in the Farmington Valley for $1.9 million; now the price is $1.3 million.
"The homeowners were not willing to accept that their house was really worth less than $1.9 million," Giuffria said. "The market has significantly changed. There are two to three buyers for every 10 houses on the market, so you have to price your house to make it one of the top three homes in your price range.
"When you overprice a house, your only recourse is to reduce the price, maybe take the house off the market and reduce the price again and now you've shifted the leverage to a buyer," he said. "If you list at a price that is truly below market value you will create a buyer frenzy that will result in multiple buyers."
Contact Robin Stansbury at rstansbury@courant.com.
The parcel under discussion is 9.9 acres of open space currently owned by the Town of Farmington and known as the Simmons Family Farm. 
Some of the best activities include meandering throughout the local Trails by bicycle or on foot, relaxing in the beauty of the local landscape. 
