Move To Nanaimo

2 June 2010

The House That Wouldn’t Sell (Part 5 and Conclusion)

Posted by Ryan Coffey under: Selling .

This is the fifth and final part of my story of “The House That Wouldn’t Sell”. I’ll give you spoiler and tell you that they do actually sell their home here, but unbeknownst to them they have actually cost themselves money. I explain this in detail after the story.

This story is based on an amalgamation of some of the most common errors made by people hoping to sell their home which ultimately are detrimental to their efforts. Please read from the beginning of part one in order to understand the context of the following passage.

Ryan Coffey

The Big Player Realtor

The listing eventually expired and Roger and Shirley finally bit the bullet and they decided to pay full commission for the sale of the property. It had been six months since they first listed their home and they were sick of the whole thing. They weren‘t sure why it didn’t work with the discount Realtor, but they figured it was because that Realtor didn’t work very hard. (Which wasn’t quite the case.)

They listed the home with the big name Realtor who had clearly forgotten a lot of the details from the time they met to discuss the listing but he acted like they were old friends anyway. The Realtor could sense their frustration and suggested $309,000 for the property and the Pilkingtons agreed quite easily.

The Realtor truthfully (this time) said that this was a competitive price for this property. The first and most honest Realtor would have told them that this was because the market value had gone up since they had first decided to sell. He would have also said that the price would be even higher if they hadn’t messed around and left it on the market so long at an unrealistic price so that it now has a stigma. Most buyers who know it has been on the market so long think it hasn’t sold because there’s something wrong with it. But this was not mentioned by the big name Realtor.

Sure enough, a couple of days after it is listed the big name Realtor brings some buyers to the home. He keeps doing this every week or so and only a couple of times do any other Realtors come with their buyers. After about a month they get a call from the Realtor and he tells them that he has someone who wants to make an offer. He shows them the contract and some paperwork which is apparently “just a formality” or “no big deal” which allows him to represent both sides of the sale. The sale is negotiated and they finally sell their home for $302,000.

Was there perhaps a reason why they could have negotiated harder? Who knows. We do know that the Realtor was making twice the money off of this sale than he would by selling the home to buyers that weren’t his own though.

They feel that although they did not make what they originally hoped to, they were happy with their Realtor and would recommend him to their friends. After all, he did what they and their previous Realtor could not.

THE END

Moral of the story: Had they listened to the most honest Realtor, they would have probably been able to sell the home in about 4-6 weeks with a fraction of the time and effort. They would also have gotten a better price for the market at the time. Although they eventually listed it for more than the most honest Realtor had originally suggested, he would have suggested a higher price had he walked in at the time of the final listing. That is, he would have if they hadn’t taken it down the route they already had. Why? Because there is a stigma that is created around a property that sits on the market for quite some time. Many buyers are quick to dismiss a property like this because they fear that something may be wrong with it and that others know something bad about it that they don’t. However, should they decide to make an offer on such a property, the offers will be lower because they feel there is no competition for the property so they feel no need to try hard to get it. Therefore, the offers made tend to be less serious as do the overall negotiations coming from they buyer’s side.

In the 7 months or so it took them to sell the property, property values went up 5% so their property which was valued at essentially 300k would have gone up to 315k. The properties they were looking at buying afterwards had gone from 400k to 420k. So, using the numbers from the story but simplfiying the math slighly for the sake of illustration, they would have had to pay 100k more for the next place had they listed it at the right price with the most honest Realtor from the beginning. Now they will have to pay 111k more for that kind of place. They have cost themselves $11,000 because they thought they could outsmart the system and save money.  And remember, this sort of situation is not something I have just seen a few times. It’s actually quite common. The details are different each time but the overall pattern is the same.

The irony is that this sort of thing seems to happen to intelligent people more than not so intelligent people. People who know they’re smart are more likely to try a hand at outsmarting the system. And yes, sometimes it does work but speaking as a professional who has seen all sorts of people use all sorts of approaches… it’s a rare thing. When you consider how much money is on the line, it’s just not worth it.

The reality of lawsuits that are more likely to come up as a result of trying to cut corners were not mentioned in this story mainly because they are complex to explain. Each sale is different and there are hundreds, if not thousands of things to watch out for. Helping you stay away from them is a big part of what a good Realtor does.

Ultimately, Roger and Shirley thought they could outsmart and beat the system. In the end, the system outsmart and beat them and whether the buyer has gotten themselves a pretty good deal. The real estate system we use is after all a system that has evolved over centuries and not something some people just made up one day. It has and will continue to change, but at any time it exists the way it does because it is the best way for so many people to do what they need to do. Chances are, that if you want to do a real estate transaction that this system will work well for you if you use it properly. An honest hard working Realtor is your best ally and guide to this complex and ever changing system. That’s what we’re here for. You may just see us have you sign some papers, take some photos and put up a sign but I promise you that this is just the tip of the iceberg.

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