#214 in a series of true experiences in real estate
October 1997, Hills Newspapers
During the last week we and a client have gone through a maddening and disappointing experience. Our buyer wrote 3 different offers to buy a certain house, each higher than the last, but it was all for naught. She was outbid and did not get the house.
It all began when Anet and I were out on Thursday tour. One house we had planned to see in Berkeley that day was priced at $173,000, at about the top of our buyer’s ability to pay. We hoped it might be suitable for her but when we got there, we could not get inside. The house was closed and on the door was a handwritten note: This house is sold. There is no need to see it.
This was not the first time we’ve found such a note on a house scheduled for a first tour. Perhaps a neighbor, already familiar with the house, had bought it before the rest of the world got a chance at buying. Or maybe another buyer managed to get inside before tour and the sale was made.
Whatever occurred, the house was sold and perhaps the seller was quite happy. But, we asked ourselves as we stared at the outside of the shingle house, did he sell for the highest price?
We’re in a very competitive market right now, one in which good houses for $173,000 are depressingly rare. Because there are so many buyers looking for the few, it frequently happens that they bid against one another and offer to buy for more than the asking price.
We cannot guess at what price this house might have sold because we never saw more than the exterior of the house and because the house was never exposed to the open market.
By coincidence, as we were talking about this, we saw someone in the front yard of the house immediately next door putting up a for sale sign, and we stopped to talk to him.
The house is a small, single-story wooden Victorian with a covered front porch and an unusual, tiny-windowed cupola — very cute.
The exterior is weather beaten and the roof is worn. Still, we are greatly surprised when the out-of-area agent tells us that the price is “around $150,000 as is” — a price that is very probably too low.
He says we can see the inside, that the house needs work, that it’s part of an estate. We ask if he has any reports — termite? — and the answer is no.
We go inside to find a somewhat shabby, but attractive interior. As it turns out, the cupola is decorative; there is no entrance to it except possibly through the attic. The fir floors need refinishing, paint is needed everywhere, and there is no fireplace, but there are built-in window seats, two bedrooms, a separate dining room, and a small, enclosed porch at the back which overlooks the yard.
We go down to the basement where we are delighted to find a concrete, not brick, foundation, and out to the garage which is in fairly decent shape.
This house has possibilities! It would, we think, work splendidly for our client who could move in, live in it pretty much as it is while she improves it.
The agent is still in the front yard where we left him, talking now to someone else who probably also came to see the house next door. The agent tells us that he wants the house sold that afternoon. If we bring him an offer today, he’ll get the attorney for the estate to sign it. No court confirmation of the sale is required for this probate.
We are excited. We don’t know what our chances of success are. We have no way of knowing, for instance, how many agents have seen this house this morning and may be contacting their buyers at that moment, but we quickly call our client and ask if she can leave work immediately and come to the house.
She arrives from San Francisco a couple of hours later and we explain the situation — what little we know — then look carefully at the house. She loves it and, of course, she loves the offered price.
The list price is vague but we write our first offer at $150,000 contingent on inspections our buyer will have done in the next week. Before we can fax it, the listing agent tells us that he may be getting other offers, so we raise it to $157,000.
At this point the agent is still saying that an acceptance will be signed that afternoon. An hour later though things begin to change.
At 5:00 p.m. we are told that the attorney will wait until morning to sign. At 5:30, the agent decides to put the listing on the Multiple Listing Service. For some unexplained reason, $159,950 is chosen as the price.
By 8:30 the next morning, the agent has been bombarded by phone calls from agents interested in the house. The price was raised to $166,000.
There were so many twists and turns, so many changes in the information and intentions during the next few days that I cannot remember them all. We’d be told something definite one minute, something completely different the next.
The word was out, agents and their clients were flocking. No offers had been considered yet. Now there was to be a Sunday open house. Worse, over-bidding in court would be allowed after all.
We talked with our client dozens of times. She changed her offer to the highest she could manage: $175,000. We delivered contracts and supporting documents to the agent. With each twist of information from him we were more discouraged, more disheartened about our chances.
And we were annoyed, annoyed that the house had not been properly presented and marketed from the first by a local agent, well versed in the local market.
At least then we would have known how to proceed. The lure of a possible bargain would not have been there to the same extent, it’s true. But the rules would have been clear; we wouldn’t be feeling “jerked around,” as we were now.
The price changed again, this time to $189,500. In the end, over a period of 6 days, the price was raised from the original “around $150,000,” 4 different times, to $205,000 as is. After the Sunday open house, someone actually made an offer of $205,000 as is and the agent changed the price in the MLS to reflect this.
However, there will be no bidding in court. At least that was the last word.
Auction fever? Actual value? We don’t know. There are no reports or inspections. We know only what we were able to see with our eyes. The house does need work — electrical, roof, some new windows, cosmetics, landscaping — and probably much more.
But it is cute. And that “cute factor” often commands a premium.
