Short Sales – Are they all smoke & mirrors?

This week I want to talk again about short sales.  This is based solely on what we are currently experiencing – it’s not necessarily a rule.  But, the new trend is that the list price of the property – what buyers see on the mls and Redfin

Our listing 11453 National

and a host of others -  has nothing to do with the price at which the property will actually sell.  We have one short sale listing and a couple of buyers “in escrow” on short sales and in each case the bank has come back for more money that the list price.  We have called on other short sale listings and talked to brokers who have explained that though it’s listed at x, the real price for which the bank will sell is x + y.  I have talked with brokers who have explained that for a buyer to actually get a property they need to pay in excess of 50k higher than the list price.  On our own listing at 11453 National we listed at 675k but in order for a buyer to get an acceptance from the bank they will need to pay 680k plus whatever termite work is needed.  We have a buyer who has offered full price on a condo downtown listed at 196k.  The bank came back asking for 204k, higher than any other comp in the building.  She has agreed to that price, but still we do not have a formal approval and we’re waiting.  So what’s the point of all this??  Buyers beware!!!  There is so much misleading information out there.  Nothing is what it seems at face value and it’s important to work with a realtor who can get to the truth about each situation quickly so that a lot of time and energy is not wasted.  Each case is individual and banks have a different value proposition on each property, so there is no rule regarding how much they will take relative to the outstanding loan amount.  Sometimes we wonder if it benefits banks to show more of a loss and therefore they refuse seemingly good offers.  It’s challenging dealing with buyers right now because they are all very attracted to short sales – thinking they’re a great deal.  Often it’s best to deal with regular old sellers, and we’re not coming from the perspective that it’s easier for us.  If a seller needs to sell their property then that’s what they will do.  They will evaluate what the market brings them, try to get the most money they can, and then if they really must sell they will sell.

The inside story — how a realtor sells her own home.

This week I, Lorin Ruttenberg, am going to talk about the experience of being a realtor and selling my own home. No matter how much I deal with home sales and see other people going through a full spectrum of emotions, it doesn’t prepare or prohibit me from experiencing the same. At times it was like my experience counted for nothing. Thank G-d I have my partner and my real estate shrink, Monica Garcia-Grilli who always takes my calls and amazingly doesn’t seem to lose patience with me.

My living room

Our first open house was a zoo. Monica held it open while I was showing properties to some clients. That very same night, we got our first offer. It was under list price, from a couple who had seen the house that day and wasted no time. I thought it showed decisiveness and commitment – two qualities I am looking for in a buyer. However, the number didn’t thrill me. Two days later we got another offer from another couple. The offer was clean with a 20% down payment and verification of funds. They had also been at Sunday’s open house and were in love. All well and good, still the number didn’t thrill me. I countered both of these offers and gave them the maximum 3 days to respond so that I could see if anything else would come in during the interim.
We held the broker’s caravan on Tuesday and I held the house open myself. The response from the brokers was great. Everyone thought the house was well priced and adorable. The next day I got a call from one of the brokers who had come through requesting a showing for her clients. We set it up for Thursday. They were a young couple with a toddler. At the showing their broker had to leave early and I had the opportunity to hang out with the young couple. This is where the problem began for me. Unfortunately, I fell in love with them. They were just sweet and wonderful and they loved the house and I felt like they “got” the house. They were artistic and the wife wanted to use my office as an art studio and the kid was adorable. My enthrallment with them was not diminished when the humbly told me they would be making an all cash offer with the assistance of their parents. Later that day their agent called me to request a showing the next day, with their parents, and she conceded that they were very interested in the house. In my mind they were the buyers.
Meantime, yet another offer came in from yet another couple who had seen the house on Sunday. It was lower than the first two offers, but I countered it because after speaking with the agent it seemed like the money was there to purchase the house.
The next day my beloved couple came to the house with their son, their parents and their agent. Everyone seemed to genuinely love the house and they were open about expressing that. The parents were low-key and gracious and I could see how they raised such a lovely daughter. They stayed at the house for at least 45 minutes. So now I’m totally on edge and wondering when the offer was going to come in. Their agent called me later that day and asked me a couple of questions about the roof. I answered them and when I asked if they were writing she said it looked like it was going in that direction. Yeeeeahhh!
So, while all this is going on the first two couples who wrote offers responded to the counter offers that I sent. The first couple, who had submitted an offer on Sunday night, dropped out. The second couple responded and did not come up in price at all. This ticked me off to no end. I felt like they should have made some sort of gesture, even if it were only to come up slightly to create a sense of good will if indeed we would end up in escrow together. I was hoping and fantasizing at this point that I could reject them and that my beloved (all cash) couple would come through.
The next day I was an anxious mess. No news, and in my business no news is usually bad news. Finally, late in the day the agent of the beloved ones called me and said that at this time they are not moving forward on my house. There is another house in which they are interested that they wanted to explore first, but it was unknown if they would be able to get that house. I was heartbroken, but at least I knew something. I felt at least the relief of knowing reality. And, I still had 2 offers to deal with.
The next day was Sunday – time for another open house. It was not as busy as the first open house, a week earlier. Nonetheless, people were very excited and openly enthusiastic about my house. During the open house a gentleman came with his wife and three kids and told me he was sent by his relatives to see the house. The relatives were none other than my golden couple. I said to him that I thought they were not going for my house and he replied that they were still “undecided.” Oh no – hope started to creep back in. After they left the golden, anointed couple with their son came again to the house. We talked for quite a while and frankly I felt like I clicked with them. I told them that I wanted to sell the house to them. We discussed nitty gritty details like where to put the television and the black-out shades in the master bedroom. I told them that I needed to respond by Monday at 5:00 to the couple who had sent me the counter and that I was waiting on a response from the 3rd people who submitted an offer. The wife said that they had some heavy-duty thinking to do that night.
On Monday I called their agent and asked if they were really not making an offer on my house. The answer was no, that indeed they were not. I felt like a guy I was totally into just broke up with me.
Later that day I learned that the couple who had submitted the 3rd offer would not be responding. So, I had one offer left at a price that I felt was unfairly low. What was I to do? It was an excruciating decision for my husband and me. If we were to counter a little higher to this couple we ran the risk that they could walk away. In that situation we had no leverage because there were no other people bidding on the house at that moment. If we rejected the offer and stayed longer on the market there were no guarantees that offers would come in any higher. The cold hard truth, and I know this from years of experience, is that the longer a house is on the market the lower and lower the offers come in. Additionally, the market is declining so what the house is worth today it might not be worth a month from now. We decided to stipulate that we would give absolutely no credits or make any repairs, but we would sell the house at the price the last couple standing had come back with.
We are currently in escrow with them. We will see what happens. We will not give anything further to them so if they ask we will say no and they will have the choice to walk away or not. Meantime, more people have seen the house and love it, but no one who has seen it is in a position to make an offer right now. I’ve come to the conclusion that it’s all about timing and that the way this goes is not totally in my control. Things happen for a reason and it seems like the lucky couple who got my house for a steal are meant to have it – at least at the moment. I have felt in the last two days a sense of well being and faith in the process. Maybe they’re buying my house right now because something fantastic is about to come on the market for me and I wouldn’t be able to buy it I weren’t in escrow on my house. Maybe I’m meant to hold open our new listing in Brentwood on Sunday instead of my own home because I’m destined to meet a client who will buy a much more expensive house and I’ll earn more money than I would have on my own house anyway. These are just two possibilities and maybe neither will pan out. However, there are so many forces at play and the range of possibilities is infinite. That’s the exciting part. It will be interesting to see how the chips fall and I am choosing to believe that it will all work out for the best – as everything does. In hindsight, I usually realize that things were right and perfect even if they were difficult and I’m sure I’ll have that experience this time around. I never cease to marvel at how the real estate business really becomes an all encompassing spiritual journey – but it does. And, btw, I’m mentally prepared that my golden couple will re-appear and want the house when it is too late. More to come…

Staging

One of the reasons why staging is so important in today’s market is that it no longer makes sense financially to do big remodel on your home before putting it on the market. 

 A simpler and more economical solution is to stage your home.  If the budget allows this is best done by a professional stager. They are well worth the money, as homes that are properly staged tend to sell quicker.  Don’t know any great stagers?  We do!  Give us a call and we will be happy to refer you to several people who “really get it done.”

If a professional stager isn’t in your budget or time line, the next best thing is to do a major de-clutter and deep clean.  We’re not talking about losing a few knick knacks, either.  We’re talking about taking about half of the contents of your home and removing it.  Rent a storage unit or a have a big yard sale, but empty your house of everything but the essentials and then get it sparkling clean.  This includes closets, garages, cupboards and under the sink areas.  You want to project a spacious roomy feeling, nothing says cramped clearer than an overstuffed closet.

The current market doesn’t allow for missteps when selling your home.  If you would like our honest opinion before placing your home on the market, give us a call.  We are The Savvy Duo and we sell it like it is.