And it was time well spent
Recently a man (let’s call him Joe) called me about possibly selling his house. He lives in a nice home which isn’t very old. Joe has been blessed with work and finances, which allowed him to pay off his mortgage. However, he had learned that a larger house, in another nice neighborhood, was being offered for sale privately. It was an older house, but had some newer items like roof and AC.
We talked at length, and had a great conversation. Afterwards, I thoroughly researched Joe’s existing house and sent detailed comparables, giving him an estimated price range within which I felt he could expect to list and sell the house. I also asked him to send me the address of the house he was considering so I could research it as well. He did so right away.
It turned out there was past history in the MLS on the other house. The most recent activity was when the person selling it had bought it themselves. I ran detailed comparables for the subdivision, as it had a good number of sales. That’s when the home’s asking price jumped out at me. I saw right away that the owner wanted an amount that was far higher than even the highest of the comparables. I looked deeper, and discovered that the price paid for the house by the owner put it in the top 5 most expensive houses in the subdivision, ever! At the time of purchase years before, it was the most expensive, by a large margin. Their current asking price was much higher than even that!
To be thorough, and check if other houses outside of the subdivision might support such a price, I carefully searched all of the surrounding area for similar homes. I took a long time, in order to be as accurate as possible. Even with this much larger data set, the asking price for this house was far above the comparables. In fact, the price paid by the owner to acquire the house still fell in the top tier of prices.
I had generated links to the comparables, along with tables showing statistics on both Joe’s existing house and the one he was considering. These went into an extremely detailed, lengthy email explaining all I had done.
In conclusion, I told Joe:
“My truthful and heartfelt advice is to stay put. You have a nice house that’s paid for, and moving to a much larger, older house means more cleaning, and higher taxes, maintenance, and energy costs, even if the house was priced correctly, which this one is NOT!
I’d be hard-pressed to recommend paying even what the owner paid for it when they bought it. I believe the owner overpaid, then unfortunately had to replace the roof and AC. As he said himself, he’s upside down. Keep in mind that it’s not up to you to bail him out of that situation! He and his agent should have looked at all this before making the purchase.
So, here I am talking myself out of a listing, but this is my honest advice. And honesty is how we do business!”
After reading all I had sent, I received a reply from Joe. In it he thanked me heartily for being so upfront with him, and for taking the time to carefully evaluate and advise him on such an important decision. He said he will keep our information handy, for future use.
I spent the better part of my day working hard on Joe’s potential sale and purchase. The end result was to advise that he NOT list his house, or buy the other one. Maybe one day we will do business with him, his family, or friends, but there are no guarantees. However, I had a great feeling, because while I may not see a dime because of Joe, I went to sleep that night knowing I had done my job, and served Joe’s best interests well. That, to us, is the only way to do things.