Our beat is culture, especially culinary culture… but lately it’s been harder to write about that—at least on the local level. Restaurants are going dark as rapidly as short-sale signs spring up on lawns. Prices of everyday ingredients have risen like high-gluten dough—or gasoline. Choose your yardstick.
As you know, we’re cooks—so, we’ve coped. We can’t say it’s been as much fun, but each day, we still manage to maintain our focus, largely through the creative discipline of selecting, preparing, and sharing food.
Today, one of us writes—in the first-person singular—about coping with something all too familiar to Floridians: the depressed market for real estate.
We’re awash in statistics and projections. Be they facts or theories, explanations are everywhere, but they’re of little comfort. You don’t need a degree in finance to see that the seller’s market for residential real estate here is absolutely awful.
Nonetheless, I just sold a house. Full stop.
I do mean SOLD—the closing has taken place, the check is in the bank.
So, as a public service, in the hope that some of you can do the same thing, I’m going to tell you how I did it.
But first you should know why I acted against all my own market instincts and put a house up for sale when I did not have to.
I was definitely NOT a “motivated seller.” I did not need—or want—to sell the property. Read on…
I owned the house with a friend, a business partner. We had paid cash for it three years ago, and, thank goodness, had no mortgage. We also had a superb, neatnik tenant who gave the property a positive cash-flow.
Despite market conditions over the past year, my partner—suffering a mid-life crisis—had been adamant about selling. I felt we should wait, riding things out, since the property was in the black. He felt otherwise, and yet would not let me buy him out. He refused my repeated cash offers, which he said were too low. However, my partner would not get an appraisal, so I paid for one by myself. He ignored it and threatened to seek a court-ordered partition and sale.
How much worse could it be? As it turned out, a lot worse…
In the previous two years, our desirable, established subdivision five minutes from downtown had lost its most appealing feature: a golf course. To condense the story to its essentials: a developer who’d purchased the rights to reconfigure the course had torn it up but had not secured all the financing he needed to put it back together.
To anyone in the neighborhood trying to sell, the local newspaper’s woeful tales about the developer in foreclosure seemed to be a relentless dirge, a chorus that served only to scare off local buyers…
Green fairways once filled with guys in plaid shorts were now sand dunes. The place looked like Kuwait. Propylene barrier fences tore and flapped in the wind. Grit got into everyone’s pools.
Our house was on a very quiet cul de sac, NOT on the golf course. But anyone who might have been interested in buying our house would first have to enter the subdivision, passing the dunes (and a crumbling planter of dead vegetation) to see that our property was not affected.
Meanwhile, three other homes on the street (all within sight of ours, all with For Sale signs in their front yards) had languished for months in MLS.
My partner (who, at this point, had lost any resemblance to my former friend) thought it was the perfect time, in his words, “to let the market decide” what our property was worth.
When I suggested an auction as a way to let that “market decide,” he thought that stigmatized the property. Three months ago, I’d actually considered an auction as a creative, underutilized marketing ploy for sellers who simply wanted to get lots of publicity, an immediate sale, and a quick closing. Now, yawn, there are a lot more auctions…
Rule Number 1:
Carpe diem. What used to work, may not work now, or later.
Rule Number 2:
In any dispute, never sink to the level of your opponent.
My partner dared me to sue him. I declined.
My partner refused to renew our tenant’s lease (even though she was paying above market rates), would not take another tenant, was not interested in offering a lease-option, or a lease-purchase. He wanted to give the listing to a flat-rate broker for an upfront fee that would put the house into MLS but leave responsibility for showing it with the seller
Having observed that my investment partner’s forte was not feng shui enhancement, I knew that the person cleaning, prepping, showing, and checking on the house would be me. I also knew that there were hundreds of those flat-fee Realtor signs all over town and that the properties thus listed were not moving any faster than the ones with traditional brokers.
But it was March in Florida—with an early Easter, truncated high season, and hurricane time less than three months away. And, I had a partner who was behaving irrationally, one who had actually diminished the value of our investment; without a tenant, our property was now in the red.
Rule Number 3:
Rise above any inertia, stubbornness, and lack of imagination your opponent may exhibit. Do what you can to counteract sheer lunacy.
Wanting to avoid both the expense and the energy-draining distraction of a court battle, I could see that selling the house was the only sensible course of action. And I knew I had work to do.
Fortunately, I had good photos of the house—taken both before and after our tenant had moved in with her lovely furnishings. Getting a friend to help me make an online photo album, I wrote captions and copy to promote the home-for-sale and then linked both text and photos to several no-cost websites.
It was more than most Realtors do for their clients, but with several thousand properties for sale, everything I could do to get someone to give the house a drive-by would be valuable. That quiet cul de sac that had been a plus was now a real handicap.
I knew that any bargain hunters here from other regions of North America and Europe were more likely to be working with buyer-brokers than going it alone in a region where they were unfamiliar with neighborhoods, proposed developments, local regulations, and tax issues.
And with so much inventory in MLS, what buyer broker would show clients a house unless he thought he’d get some compensation?
If I wanted to attract those buyers, those people who still thought of Florida as paradise, I would have to offer Realtors financial incentives.
Furthermore, I had to set aside my own resentments, the sense that I had been forced into working this hard in reaction to someone else’s poor judgement. It was obvious that my partner’s skills lay in realms other than marketing, but I didn’t want to be the one extolling the virtues of the house and chafing at the fact that we were offering it for less than we had in it. Someone else would have to sell the property, someone who had not labored over it as much as I had.
Luckily, there was one Realtor both my partner and I had previously engaged—as individual investors and on a deal we did together. The point was, we both trusted her, even if we no longer had confidence in each other. This Realtor was willing to be the go-between, talking to each of us and presenting offers. Furthermore, because we were repeat clients, she offered to handle the listing for a 3% commission if one of her own buyers bought the property. (You can bet this possibility appealed to my partner.)
Rule Number 4: Don’t hang on for dear life. Instead, let go. You don’t want your remorse or bitterness to seep into your own presentation of a property.
Get a Realtor who likes your property and will bring her enthusiasm to its promotion and then–
Rule Number 5: Help your Realtor all you can.
Give her good photos, keep flowers and live plants in the rooms—which should be immaculate. Whether or not you are living in the house, keep up the yard, sweep the walk, and make sure the windows are clean.
Rule Number 6: Recognize the realities of the current market.
Price your house to sell and realize that you may not sell at a profit; in fact, that you may have to take a considerable loss.
If you want to sell, but don’t have to—wait. But if you must sell now, interview at least two Realtors and get each to do a comparative market analysis (CMA) for you. Be prepared for bad news, or no news. In some neighborhoods, those with few recent sales, it may be hard to come up with comparables for your property.
If you are not yet convinced that you want to list the property in MLS and think you want to try to sell it yourself, at least pay for an appraisal-for-value so that you don’t lose time. The appraisal may also shock you. But if you can live with the price the appraisal states, you have a valuable marketing tool when you advertise the property yourself.
Price the house 5-10% under what the comps or the appraisal suggest. Even with that lure, be prepared to take at least 10% less than your listing price. Steel yourself for low-ball offers and weird schemes with contingencies based on the spread between the British pound and the Looney.
Rule Number 7: (optional, but applicable if you do list the property). Let your Realtor push the house, and get on with your life.
But no matter how terrible you feel about selling, keep the place looking good so yours does not appear to be a distress sale. Although I did not fully stage our house, I did a sort of skeleton staging—a rug here, a painting there, a basket of flowers in the corner.
Setting the listing price below-appraisal worked to get Realtors out of their offices, past the Gates of Kuwait, and over to our house. When they arrived, they were pleasantly surprised to have not even a glimpse of the derelict golf course, not a speck of sand-trap grit… And when the Realtors and their clients got inside, the house was cool, serene, and staged just enough to make lookers linger.
After having the property listed for two months, we had an offer we could accept.
Our Realtor arranged separate closings for my partner and me. My partner would have realized a profit if he’d accepted my first offer, made over a year ago. As things settled, each of us lost something like $35K on the investment.
I wish you a less painful passage to the closing table.
And after you’ve been there, here is some solace:
If you are a homeowner, you can probably rent something for less than you were paying each month as a mortgage. And if you, like me, are an incurable optimist and unrepentant investor, you can now go out and buy something else, at least as deeply discounted as what you just sold.