I am currently renting a house that is for sale. The rent is dirt cheap and includes most utilities, so I can’t complain about that. But I think I may have stumbled across a shady realtor practice.
First, some background info. The owner won’t take less than $700K for the house, and most believe the market will not support that price1. My hunch is that the selling agent agrees, although she has told the owner she fully believes the house will sell for that price.
Before getting the listing, she said she’d have an open house every other Saturday. After the papers were signed, she has held an open house every weekend.
It is important to note that there are two types of open houses. A broker open house is only open to real estate agents. They get to take a good survey of the house and decide whether it is right for their clients. This directly helps out the homeowner, because it increases the number of people selling his house.
Then there is the public open house. Here, every Tom, Dick, and Sally can come off the street, check out your house, and paw through your stuff while you’re trying to figure out what to do for the next 4 hours. This typically has little benefit for the seller, because most people walk into the house, look around, and then ask things like, “How many square feet is this?” or “What’s the price?” or “There aren’t any ethnic people in this neighborhood, are there?” Usually, the answer is not what the buyer wanted to hear. However, the showing agent can now get their contact information and what they’re looking for, adding them to their client list.
The house I’m in appears to be major client bait. It borders 3 streets, one of which is fairly busy. The agent has stated that they get a lot of visitors during public open houses. So many, in fact, that she’s decided to hold one every Saturday and Sunday, from now until the house sells. Oh yeah, she’s got a 6 month contract.
As a renter, this really sucks. In fact, I’d say it borders on harassment. I doubt she’d do this if the homeowner were living here, and if I moved out it would be a big win for her.
But as a homeowner, it doesn’t help, either. First, the selling agent isn’t running the open houses; it’s going to some random agent in the office. My network of Crack Team spies have confirmed that the agents do absolutely nothing to sell the house. Rather, they sit in the corner and collect names and phone numbers. I confirmed this lack of motivation again today. As I was scrambling to get things ready (I was given zero notice this time), I spoke with the showing agent. It became immediately apparent that she had no knowledge of the house or owner, nor did she care to. Clearly, she had no plans to sell the house.
If you find yourself in this situation, there are a few things you can do. Obviously, you can limit open houses. You can also get open house reports asking about the solid leads they’re generating. You can be lied to, sure, but this only works for so long. Then the agent looks like she can’t close since she loses so many solid leads. But most importantly, be realistic about your selling price. Maybe it’s time to call it quits.
- For the curious, it is a townhouse less than a mile from the beach with extensive upgrades using only the very best materials. However, it is small, located on the entrance to the development, and those upgrades were inexpertly installed. Horrible craftsmanship. [↩]
Nice writing style. Looking forward to reading more from you.
Chris Moran
Does the agreement allow the homeowner to limit the number of open houses?? If it does, perhaps it’s time to exercise that option. What excuse to use?? Those are the days that you are holding your own “For Sale by Owner” open houses. It can consist of a sign (very small, very discreet) attached to a box, placed by the door. If anyone sees it and becomes interested they can leave a message on a piece of paper and drop it in the box. You have now satisfied your responsibility to show the house on your days. Feel free to watch some TV or do laundry if no one shows up.
I think it’s a beautiful house. The changes that have been made to it are extreme and make such a dramatic difference it’s crazy. But, you forgot to mention that the upgrades cater to a very small demographic, IMHO. The master bedroom has a shower that seems to be great for a bachelor, but that’s about it. I dont see it appealing to many people. Also, since the speakers are literally built into the house (in amazingly bizzare locations), it would cost a bit of money to fix how they were sey up so you are looking for someone who doesnt already have a TV & Speaker system they like, or who either doesnt care or doesnt know that they should care. I have a hard time imagining that the buyer who would be happy with things as they are and willing to pay so much for something that isnt that large will come along before you lose your sanity from the constant bombardment of real estate people every weekend.
I don’t know about limiting open houses. Of course, now that they owner is not living there, it is not in his best interest to turn away viewers. Again, he is really desperate to sell it at that price. My comfort means little to him, I think.
I did mention in the footnote that the upgrades were installed with horrible craftsmanship. As you pointed out, that includes the home theater. Recently, a friend pointed out that some hanging lights weren’t level. I gently requested that comments on the installation be limited to pointing out correct installations; otherwise, there’d be no end to them.
As for demographic, I had a scary thought over the weekend. It’s more likely that we members of TCT, who notice quality craftsmanship (and lack thereof), are the narrow demographic. I’ve often gone into the homes of the wealthy and seen old and/or sub-par home theaters, often with poor speaker placement. Most people don’t pay attention to this kind of thing, even if they have the money. And while the house has a large number of flaws, most don’t jump out at you. I’m afraid that in a standard walk-through, you’d miss most of it.
What you really need is a ruthless inspector, like that guy in the last King of the Hill. It occurred to me that you should ask your realtor who they recommend, and then immediately cross them off your list. The realtor will certainly want someone who won’t jeopardize the sale. An inspector who will miss a lot of the details or simply not find them important. Or maybe list a few details, but conveniently miss problems with the foundation, etc.
Unfortunately, I’m guessing that line of reasoning will escape most people, too.
I’m curious as to why that price is so hard set?
I mean assuming he shopped around and had a few agents give their estimates for selling price, why stick so high? Sounds very ‘Bushy’ to me. (Everyone is wrong but me.)
I’d also like to know what percentage the agent gets for this kind of run-around sale.
The reason for the price is that he wants to move to a cheaper market and upgrade to a big house with a yard in a good neighborhood. If he can’t do that, he’ll stay where he is. To afford the upgrade, he needs his house to sell for a minimum amount that will leave him enough money after the mortgage, home equity loans, and commission (5%) is subtracted. Since the loans are high, the selling price is high. It’s not too different from those “make me move” listings you see on Zillow.
He was originally told by the first appraisers that it wouldn’t sell for that price, and he believed them. So he told the first agent he wouldn’t sell. However, the new agent pointed out flaws with their methods (not familiar with beach properties, counting a foreclosure as a true comparable, etc.). So he signed with her.