Here are a few stories from 2014:
A. I should have known it was going to be a wacky 2014 when the second offer I wrote in January wound up in a bidding war that could have been very entertaining, but instead flopped. The listing agent decided to entertain cash offers only, even though there was nothing wrong with the house, she didn’t represent the eventual buyers, and they did a standard 30-day escrow. By eliminating the seven financed offers, she left at least $50,000 on the table, and probably more.
B. There was one case early in the year where the seller thought the market was moving higher, and wanted more money. Our buyer had been performing as planned and was ready to close on time, but at the final walk-through he made it clear that he wasn’t moving out. The listing agent threw in his entire commission and bailed, so I had to step in to make it right. I met with the seller and got him to agree to vacate within 5 days after closing, and after that it would cost him $500 per day. He left as agreed!
C. On one of my listings, we entered into an agreement within the first 10 days on the market. The buyers visited the house several times, but on the last day of their contingency period, they backed out due to road noise. But the road noise didn’t change during those couple of weeks, so there’s no telling if that was the real reason, but it shows how sellers are in limbo during the contingency period.
D. I had three potential sellers decide not to sell because they didn’t meet the 2-out-of-5-year residency period and qualify for tax-free gains up to $500,000. I am careful to discuss that before listing – I had another sale this year where I represented the buyers, and the sellers figured it out after opening escrow that they didn’t qualify and got taxed instead.
E. I lost two sales due to government inflexibility on zoning. In one case the county would only allow one house to be built on 15.8 acres due to it just being down-zoned to a minimum of 8-acre parcels. The other was a city not allowing any residential development on a parcel that had residential across the street and around the corner.
F. There were three instances where I asked a listing agent if the seller might consider a price that was well under the list, and they scoffed at such an offensive idea. Of course, they later sold them for my price or under – and in one case the agent called me to tell me that her seller did consider an offer under a million (list was $1.2M), and she just opened escrow. Don’t you call me before opening escrow to create a bidding war?
G. I saw one seller get offered $390,000, which was within the advertised range on a condo she owned since the 1990s, and is paid off. She refused to go any lower than $400,000, and the buyer walked (not mine). Doesn’t there have to be a way to make that work!
It will probably be just as zany in 2015 – Get Good Help!
These first-hand vignettes are great. You regularly mention pricing to engineer a bidding war. Do you have a post you could link to that describes your strategy, including how you manage same?
Real Estate agents and Real estate in general is fascinating to watch.
90% of the agents are clueless and 10% control everything. There’s nothing specifically holding the 90% back from being part of the 10% other than drive to be successful and working hard to be a better agent.
More stories, JtR, more stories please…
“90% of the agents are clueless and 10% control everything.”
Those agents in the 90% that you are referring to watch too much Million Dollar Listing LA and truly believe how easy it must be to sell homes.