How to throw away $27,000

Venting blog, consider yourself warned.

 

Two years ago I listed a home south of town for a couple, they were moving on a job relocation.  I’d sold the home about 10 years back, it’s a cute little one-level home out in the country on one acre.  At the time the market was going pretty crazy as people were frantically scooping up houses while the tax credits existed for first time home buyers.  This house was an ideal home for first-timers.

After some research and discussion we decided to list the home for $195,000.  The market response was slow through the winter but picked up rapidly in the spring of 2010.  As the tax credit deadline approached our number of showings went way up and finally, just two days before buyer’s had to get a sale “under contract” to get the tax credit, we got an offer.  It was $10,000 under asking and after some skillful negotiating we got the buyers to come up to $191,000 – just $4,000 off our asking.  However my seller still was unsatisfied.

On May 29th we got in a huge argument on the phone, my seller wanted $193,000 or else he’d wait for more money at a later time.  I adamantly warned him that the market was going to slow down and that in these times the first offer is usually the best.  I tried to explain to him that even if it takes him 6 more months to get that $2,000 more, he’d have already lost that much more in 6 months worth of interest paid on his mortgage.  The conversation was going nowhere.  It got to the point where I was getting very frustrated with my seller, warning him that he’s taking a very risky gamble and I think his decision to wait for this $2,000 more is a poor one.  He wouldn’t budge…

We sent a fresh counter at $193,000 as my client instructed despite my continued warnings, the buyer’s agent called me and said they were going to make an offer on another home because they wouldn’t come up another $2,000.  I’m not one to sacrifice my fees as a listing agent but I tossed that suggestion out to cut back a bit of our fees and try to meet in the middle.  The buyer’s agent wasn’t interested in doing that considering her clients had a wide selection of listings to buy.  Off they went, and quickly secured a replacement property that same day.

Over the next month my professional relationship with these sellers had declined, the showings all but stopped, we attempted a few open houses and one REALTOR(R) tour but with no luck.  My seller informed me that he felt I hadn’t done enough to get his house sold and was changing offices.  Quite frankly I was happy to be done with it since I knew in my heart they’d made a huge mistake with that prior client.

Fast forward to one month ago.  A new sale hits the MLS, it’s that cute little house, finally sold with the firm that the seller chose after deciding to terminate with us.  The sales price?  $167,000 with $3,000 in seller’s proceeds paying closing costs.  My initial reaction was one of “I told you so,” however once I got to thinking about it, I was just sick.  My (former) client’s refusal to listen to professional advice cost him $27,000 and another year’s worth of stress of still owning a home in a state he no longer worked in.

This story is one I’ve shared a bunch recently and I use it as a general example with my current seller clients to warn them of the dangers over knit-picking on contracts when you’re down to a couple thousand dollars.  It still frustrates me to think of it, but I’m happy to share the story in hopes that it’ll help some sellers to make more informed decisions in this market.

Posted on December 15, 2011 at 6:22 pm
Wahlberg Team | Category: Uncategorized

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