#209 in a series of true experiences in real estate
August 1997, Hills Newspapers
In addition to doing regular real estate, we are sometimes hired for an hourly fee to consult with buyers or sellers without becoming their agents. They don’t want to feel committed to a particular agent or they are looking for general information and strategies, an agent’s views before they decide what to do.
For example, a would-be seller called us not long ago asking if we’d talk to him about the house he’s been building himself over the last few years. He and his wife had expected to complete the construction and stay but their plans have changed and they’d like to sell.
The owners wanted our opinion on how much further they should go with finishing the house, how much more money it makes sense for them to spend, what kinds of things a potential buyer will likely find most appealing.
They have carpeted the master bedroom, for example, because they prefer carpet and it was less expensive to lay than a wood floor. Did we feel that a wood floor would be preferable? Also, what difference would it make if the downstairs bath counters were finished in ceramic tile instead of the marble used in the other bathrooms?
There were questions about how far they should go with landscaping and adding a spa. They asked for information about staging, showing and pricing. How quickly might their house sell? What kinds of disclosures will they need to make?
They wondered if it would make sense for them to market the house themselves. If not, how should they go about choosing the right agent to list the house?
It is impossible to supply hard and fast answers for most of these questions, of course, but we gave the owners a broader picture than they would have otherwise, offered some perspective based on our experience.
We also gave some unsolicited advice. They said they planned to put the house on the market soon and continue to work on finishing it, but we told them that this is not a good idea. The work should be completely done and all the tools put away before any buyer sees the house.
This couple is passionate about their house. For a long time they have been involved in designing, then building every square inch of it. They are intimately acquainted with each joint and fastening, materials and applications and rush to explain to us which ones work well and those that do not.
They are understandably proud of their accomplishments but, we say, it would be better if they are not the ones to show the house to buyers. They’re just too close to it.
We suggest that they interview several different agents who work in the area. They should ask for references from each agent and take the time to contact them, then choose an agent who obviously appreciates the house and has an organized marketing plan. Most importantly, the owners must feel comfortable with the communications between them and the agent.
The owners can put their love and knowledge of the house to good use by writing down for the buyer the construction specifications, all of the details they would like to tell about the materials they’ve selected, including, if they wish, their reasons for these choices.
As we walk through the house, they point out some projects and changes they expect to make, not all of which we find necessary. The husband thinks the oak floor in the kitchen needs additional coats of finish but we think the floor looks fine.
He also has a plan to add glass shelves inside a stairway alcove while we think it looks better plain. There is a question about whether the inside stairs should be carpeted or left in rough fir. We prefer the fir but we are unsure what the buyer will want. It will simply depend on the buyer.
We suggest that they make a list of all unfinished work with an estimate of the costs and time to complete them. Meanwhile we will look at the sales prices of similar houses and start watching the market for similar new listings. We can return and go over our lists together.
Buyers also call us, often because they are considering buying directly from an owner and need information. Recently one couple wanted to buy the house they had been renting for several years from their landlord who was also a friend.
These buyers were very organized. Before calling us they had gone to many open houses, looked at houses similar in size, style, quality and location to the one they were living in. They had a pretty good idea about its value.
The house needed some work, including redoing the garage rafters and roof covering and replacing a rickety deck. They already had a termite report and bids for repairs from contractors and they had a good idea what it would cost to do some kitchen and bathroom upgrading, figures they needed before they chose the amount of down payment they would make.
In order to protect their own position, they wanted to learn everything possible about the way sales “traditionally are handled.” They were also concerned that they not jeopardize their friendship with the owner by asking for something “unreasonable.”
They had already selected an attorney who would draw up their contract. Now they wanted from us our opinion of the situation. What work would the seller typically pay for? What kinds of disclosures must he make? How should they go about getting a loan? Were there other things they hadn’t considered?
They hadn’t decided whether they would tear down the garage or repair it. We suggested that they go to the city, look at the building permit files which would give them general information on work done on the house, and at the same time make inquiries about the garage. If they decided to remove it, would the city allow it to be rebuilt in the future? Would requirements for a new garage be different from those for repairing the present one?
We talked about getting a professional appraisal to set the value on the house (which turned out not to be necessary). We said that frequently the seller takes responsibility for the cost of “termite” work whereas, more often than not, the buyer is responsible for any upgrades. But there are no rules about these things; they are all open to negotiation.
We talked about loans and loan brokers, closing costs and which of these the seller and buyer usually pay. We discussed what the title company does, how to open an escrow, how earnest money deposits are usually handled and how much they are. We made sure they understood what contingencies they would have, what to expect from their inspectors, and what disclosures the seller should provide to them.
We spent, less than 3 hours with them that day, the only time we met in person. After that, as the sale progressed, they did call to ask a few other questions, but otherwise they handled everything most ably. It was an unusually smooth transaction.
This was true for several reasons: This couple is good at taking in information and using it; their brains work very well. Neither the buyers nor the seller were unreasonable in their demands. They were able to come to agreement easily and they had an excellent attorney who took care of their contract.
They called again when the house was theirs, reporting that they were very happy indeed.
