It’s bad enough to undertake a major project, and then learn–too late to remedy matters–that you did it all wrong. If you didn’t take away any lessons from the experience, it was all for nothing. But if you learned anything, why not share?
Okay. Time for the after-action report.
My wife and I recently sold a home in Kennewick, Washington. We got far less for it than we had expected. It was a painful, miserable experience I wouldn’t recommend to anyone I liked. We did a lot of things wrong, assumed things that weren’t correct, avoided remedies we could have obtained. This was a hot mess, costly and painful. Was it all our fault? No–but blaming others for one’s own bad decisions is a losing game. I include bad trust decisions in that.
Mistake #1: selling a vacant home.
Why it’s a mistake: you will still have to pay the utilities and all the other maintenance costs. Buyers will like it less, so it will be harder to sell, and you will get less money for it when you do. Once they figure out that they won’t get caught, kids will vandalize it. The police won’t protect it, as protection is a non-revenue activity, and they are too busy raising money through traffic tickets. It will cost double to insure it, the insurance will be less comprehensive, and if you think you can get away with just not telling the insurance company it’s vacant, you’d better rethink that misguided notion. You must pay to have it mowed, watered, weeded. It will be an open cash hemorrhage seeping arterial money all year round (guess how we gained perspective on that).
Better: either stay in it until it goes into contract, hire a home caretaker service, or even let your nephew live there rent-free. Work out whatever you must in order to make sure it isn’t vacant, so that someone at least mows the lawn, notices sprinkler damage, spots pipe leaks, flushes the toilets, and runs the water. That way, if a contractor turns off your heat in winter, and doesn’t turn it back on again, someone will notice, and that someone probably will not be a buyer’s real estate agent.
Mistake #2: selling a home from out of town.
Why it’s a mistake: because you are out of sight to a listing realtor, you are out of mind, and unless it’s a huge property with a massive commission, you may be irrelevant to his world. The closing process will be more cumbersome due to the distance. You will have to pay someone else to perform minor repairs that would be within your capacity if you were present. And if you decide to spruce something up to improve the appeal, you will not be there to supervise the contractors’ work. Since you are out of mind to your realtor, he will not check on their work. That’s their cue to do a shabby job, leave a mess, overcharge you, and when you find out, try to blame someone else. They won’t even understand how you could object to that. It’s just what is done.
Oh, and if you have to Fed Ex the closing documents, do check the tracking number on the tag vs. the register slip that you get at a Fed Ex Office with a tracking number on it. Otherwise, for example, you may see to your horror the next day that your closing documents evidently went to Fort Worth, Texas rather than Kennewick, Washington. You will be relieved when the title company informs you that they actually got the right documents, but I don’t recommend those fifteen minutes of tachycardia to anyone. This would not have happened if we had not tried to sell a home from out of town.
Better: don’t leave town until you’ve got the proceeds. That way, none of the above is a problem.
Obviously, the combination of selling a vacant home from out of town is worse than the sum of those two miserable parts. Brilliant, weren’t we?
Mistake #3: hoping to sell it without having to repaint the crazy cat lady wall colors and replace the scuzzy-looking carpet.
Why it’s a mistake: because people are stupid. People take one look at the weird colors, or grungy carpet, and their impression of the property is formed. They don’t say: $3000 and that’s fixed. I’ll offer that much less. I figured this out watching those idiotic house hunter shows, in which someone takes one step inside, doesn’t like the carpet or the paint job, and forms a negative impression. The buyer doesn’t care that you already priced in that $3000–she will price it in again.
Better: spruce it up yourself before you list it. If you can do it yourself, great; you won’t have to deal with contractors. But if you can’t do it yourself, you can at least keep an eye on the contractors, and they will grudgingly do it right because otherwise, you can prove that they did not.
Mistake #4: believing assurances that a realtor will keep an eye on your property, even if he claims to have a relative who does that.
Why it’s a mistake: because the realtor won’t. That’s just something they say to make you feel better, because you can’t verify it. And if you actually fall for it, the realtor now knows that you are a moron: someone too dumb to know the difference between truth and fiction, good service and bad. An easy mark, an unquestioning client, a supreme fool. There is now no need for the realtor to pay your listing any attention whatsoever; if it sells itself, wonderful, if not, it’ll sit there and fall apart. Not his problem.
Better: make your own arrangements to see that the property remains in good condition. Keep living there, or get someone else to do so. Rely on your agent for nothing related to the matter.
Mistake #5: listing it too high at start. While I believe that a lot of people do this, hoping someone will fall in love with it, people’s love levels are limited by a sense of good value.
Why it’s a mistake: because your best chance to sell it is probably when it just hits the market, and everyone is interested in showing it (and it’s not stale on the market). If it’s too spendy at that time, you miss that timeframe and can never get it back.
Better: spruce it up, list it reasonably at the outset, and hope for the sale to come from that early attention.
Mistake #6: choosing a listing agent because he was the protégé of one you knew and respected.
Why it’s a mistake: because it’s quite possible for a terrible agent to make a pretty fair living off a retired agent’s old customer base. You can’t assume that the standards were passed down. And just because someone is a good buyer’s agent does not mean he will be a good listing agent.
Better: interview at least three agents. Do so at the property. If possible, choose your candidates by referrals, but have them over. Ask them what they would list it for. Ask them how they would market it. Ask them point blank if there is anything about the property that would make it a low priority for them to sell, and do so in such a way as to invite candor without recrimination. You don’t want an agent who, deep down, doesn’t even want the listing.
Mistake #7: adhering to a listing agreement with a failed agent.
Why it’s a mistake: because you can often act to rescind a listing agreement prior to its expiration. Never continue to deal with an agent who is not bothering, or whom you have come to despise, or whom you suspect has deceived you. In what universe should a lousy agent collect a big commission after an extended period of frustration, during which you hated him a little more every day of your life?
Better: read the agreement carefully, call his managing broker, and ask to rescind the agreement. The typical requirement is that if you re-list it, you list it with another agent within the same regional association. The main purpose of listing agreements is to make sure that you don’t cut the agent out–that if a sale results from his marketing, that he is not deprived of his fair compensation. Expect a stipulation that you either remove the property from the market for an unacceptable length of time, or re-list it so that someone else gets paid. I’m not here to help anyone screw an agent who did a good job, but it is stupid, stupid, stupid to pay an agent who did a lousy job. And turn a deaf ear to the managing broker’s entreaties to choose a different agent from that firm; that’s a terrible idea. The spurned agent will fill the new one’s ears with venom about you. For this deal, at least, you and that firm are done.
Mistake #8: renewing a listing agreement with a failed agent while/because the home is in contract.
Why it’s a mistake: wait, if he has it sold, is it really a failure? Perhaps, if you aren’t happy with the deal and were desperate, and didn’t just rescind the agreement. But the deal may fall through, especially because a failed agent may not properly qualify a buyer or represent your interests in proper fashion. Note that this doesn’t mean you should attempt to evade paying the commission due; if it resulted from a failed agent’s marketing, and you had a valid agreement, that’s his sale. You’d best make your peace with it, because to do otherwise would likely be actionable. It would also make you a failed seller.
Better: want to make sure an agent strives to complete the deal? If the agreement is expiring while the home is in contract, and you hate the agent, don’t renew the agreement. Then he knows that he either gets this one done or loses it. You don’t owe him an explanation. You don’t owe anyone an explanation. You don’t have to renew it. If the deal completes, you have to pay him. If it does not, you’re looking for a better agent.
Mistake #9: choosing to list with a ‘top producer.’
Why it’s a mistake: because a top producer is by no means necessarily the most competent agent. He could just be milking someone else’s old book of business. He will have less time to devote to your property. He doesn’t have to care. We were warned against this by competent guidance, and failed to heed the guidance, which is stupid in capital letters. Oh, and if you think that talking to the managing broker will solve anything, think again. Top producers bring in the most money. Your satisfaction is less important than the firm’s revenue stream. Sorry. He brings in piles of money, and the price is a few PR casualties. He was making an omelet, and you were just one of the broken eggs. If you imagine that the managing broker would discipline a top producer just because you told a tale of outrage, you are Linus, the manager is Lucy, and your innocence is the football.
Should it be this way? No, but ‘should’ is useless. Many impotent wails in history have included the word ‘should.’ What ‘should be’ has no bearing. What a noun is or is not, can or cannot, will or will not, does or does not, is reality. In reality, in the world of sales, high producers are like star athletes at SEC schools: the rules and law are different for them. Don’t be surprised if the MB tries to take over the conversation and tell you why you are wrong, why the agent is fantastic, and why you’re just a whiny-butt. My advice: interrupt him the minute that starts. Tell him that you were treated abominably, and that if he wants to hear how, you’re willing to tell him, but if he’s just here to invalidate your experience, the conversation can end.
Better: ask your candidates how much business they do. Go to the finalist’s office. If the I Love Me wall includes a dozen Top Producer awards, forget it. You want someone who does a fair amount of business, but not so much that yours won’t matter. And you want someone who has something to fear from a managing broker.
Mistake #10: dropping the price because your agent is useless and you’re desperate.
Why it’s a mistake: because if your agent sucks, you should be rescinding the listing agreement instead, or not renewing it. The reason to drop the price is because you have decided that your price is above market and that no one will pay you that much for it, not in desperation because you think it’s your only way to influence the situation. I’d rather not say precisely why, but if you do that, you will walk away with lasting resentment and a feeling of having been cheated, when deep down you will realize that it was your own inexperience that caused you to cheat yourself.
Better: obviously, sack your agent and find one who isn’t useless. Have no soul nor remorse.
Mistake #11: assuming that once you are in contract, everyone will do what they’re supposed to.
Why it’s a mistake: because people are, pardon me, fuckups. Even when it’s counter to their interests. Buyers dawdle with loan documentation. Lenders piddle about assembling it, then demand more on short notice. Agents dawdle informing you of everything. Buyers decide they want to modify the contract even after everyone has signed, and expect you to swallow the modifications without demur. Title companies tell you one thing, then do another. Inspectors miss glaring things, yet come up with stupid things, and buyers want them dealt with. Drywall contractors cut into water pipes by mistake. Yard maintenance people and nephews break sprinkler heads. Neighborhood kids break windows. No one just does it right. People are fuckups.
Better: expect a steady stream of unforced errors, egregious blunders, sloppy omissions, lazy functionaries, arrogant demands, and deceptive statements. Odds are good that if you perform precisely as the contract requires and good business practice would suggest, you’ll be all alone on your little island of virtue, waving across the water to fleets of ships of fools. Be pleasantly surprised by the one or two people in the transaction who seem to take their duties seriously.
Mistake #12: reading this and deciding that there aren’t any good people in real estate and mortgages. Not one we made, but one to warn you about.
Why it would be a mistake: because, how do you think I learned all this, and figured out what we ought to have done? From one of the good ones, albeit not one in a position to participate in this transaction due to geography, who gave generously of time and wisdom without any expectation of compensation, and volunteered to do more if asked.
Better: take this away from this post. It’s not that there are not good ones. I have proof that there are. It is that you must learn to identify the good and the bad, and be ready to jettison the bad and work with the good.
Because everything useful you have learned here was influenced by the good. And the good deserve to be paid. This costs too much to pay the bad.