VOL. 41 | NO. 8 | Friday, February 24, 2017
Buyers expect perfection, but fear disasters to come
I have never met a homeowner who believes they’re residing in a home that amounts to a powder keg with the fuse lit. It is difficult to convince buyers that is the case.
In defense of buyers, they want the house they are purchasing to have all systems functioning and be void of potential catastrophes.
As real estate transactions go, the process is a recipe for (to use one of the President Trump’s favorite terms) disasters. By the way, according to President Trump, I gave him some of the best real estate advice that he ever received. (See Chapter 19 of “The Best Real Estate Advice I Ever Received,’’ 2006, by Donald Trump).
After learning of my contribution to this book, my eight-year-old daughter quipped, “Daddy, how could you?” Others suggest I see if he is open for more advice. Most do not care.
Back to the booby-trapped houses. The shortcomings are generally unknown by the sellers. But that doesn’t mean opportunities for disaster don’t abound. Usually, when buyers list houses, they feel they will sell within minutes for list price or above. In many cases, that is exactly what happens. But disaster can be right around the corner.
Before the offers, or lack thereof, sellers often prepare a “net sheet” determining how much loot they will pocket after the closing, often budgeting for debt elimination, vacation or determining the amount of cash they will have available to invest in the next home. They use the list price as the basis for these computations.
When it does not sell for list price, it can feel like a disaster.
Even when the property does sell for list price, trouble might be brewing. Sellers feel when they pay list price and above, everything had better function perfectly. And that means, in their minds, all systems must be able to function for at least as long as a new one would.
No matter that the owners provided a Tennessee Residential Property Disclosure correctly stating the age of the roof as 20 years and that the HVAC had spewed hot and cold air for 15 years. When the inspector warns that they are at the end of their lives, the buyers want new systems. The contract does not say the sellers must provide new systems, only that the existing systems are functioning.
Still, the buyers want new or some compensation for accepting these prehistoric conditions. They hold the sellers hostage. They want $7,500, even though that amount won’t come close to replacing these fossils.
What are the sellers to do? The next inspector will discover the same situation. Will there be another buyer who will pay the price? Anything sold “as-is” conjures visions of the movie “The Money Pit.”
The sellers bite the bullet. There go the student loan payoffs as well as the new furniture for the next house. A disaster, pure and simple.
The buyers are awaiting a disaster as the roof will certainly spring leaks, when the next rain comes, and galvanized pipes are readying to soon close shut with rust. It won’t be long until the basements and crawl spaces resemble the Titanic.
And in the end, both parties are excited about their houses. There are no disasters. Everyone is safe.
Sale of the Week
A detached Horizontal Property Regime (HPR) located at 1135 Granny White Court sold last week for $1,220,000. Originally listed for $1,299,900, the property had been reduced to $1,250,000 when it sold. Mary Beth Thomas of PARKs, scream it loud, was the listing agent along with the master of infillness, John Brittle.
P. Shea Design provided the interesting, creative architecture, and McKenzie Construction was the builder of the home. Thomas describes Granny White Court as “a quiet dead end street,” and notes “the home sits gracefully on a wide, spacious lot with a porte-cochere and private fenced yard.”
Like many homes these days, the brick house has been painted. The “tall and skinnies” have given way to the white elephants as it seems the larger homes are now painted white. (Although this 4,778-square footer has a tint to her.)
There was an older, 1980s-upper-end home in Oak Hill that sat idle on the market for months. A wonderfully renovated home, its red brick veneer drew no buyers, and there were only a couple of showings. After the 180-day listing expired, the owner hired a new broker, and the home re-emerged with white bricks.
With its new shade, it went under contract in a matter of days. The great interior designers Procol Harem had it right back in 1967 with its hit “A Whiter Shade of Pale”.
Richard Courtney is a real estate broker with Christianson, Patterson, Courtney and Associates and can be reached at firstname.lastname@example.org