Common seller mistakes numbers 6 through 10.
Two weeks ago we looked at five uncommonly common seller mistakes. This week we'll look at five more. Please note that this list is by no means exhaustive.
Let's kick things off with a seller who at first glance looks an awful lot like the seller we dissected two weeks ago, but, no, there's a difference: this story has a "happy" ending, "happy" in the sense that she sells her home, unlike our first owner, who as you'll recall is waiting for the market to come back, or for the "right buyer" to come along waving fistfuls of cash, or just waiting. But then again I can't call the ending entirely happy, because she left $75,000 on the table, which would mitigate my happiness considerably.
Here's what happened in a nutshell: Seller puts her home on the market at $1,048,000, against the advice of her agent, who tells her $950,000. Nothing happens and a month later Seller reduces her price to $998,000, a move in the right direction but not far enough. I don't know all the details—what I do know I got from her agent, who was trying to put plenty of distance between himself and this train wreck—but at some point she gets an offer at $925,000, and I'm guessing it's about now. Seller not only doesn't accept the offer, she doesn't even counter. Buyer goes away, forever. A few months later Seller reduces her price to $899,000, three weeks later she gets an offer, and then seven weeks after that her house closes at can I get a drum roll please? $850,000.
$75,000 less than the offer she refused to consider four months before.
Not nearly as nuanced a story as the one I told you two weeks ago, but far more common. Let's enumerate the mistakes Seller made:
6. Overpriced the house.
7. Didn't seriously entertain the first offer she got.
8. Didn't even counter it.
9. Let her house get as stale as week-old bread, and took a $75,000 hit because of it.
And $75,000 is a lot of money.
Let's finish with a flourish, with an example of seller wrongheadedness without parallel in my experience, although it typifies the need some sellers have to be their own worst enemy and make work for plaintiff's attorneys.
Late last year I had some buyers interested in a house with an unpermitted addition. In some neighborhoods it's not all that unusual to find an extra one, two or three bedrooms that no building inspector ever blessed, with maybe a couple of "bonus" bathrooms thrown in, but in this neighborhood it is unusual, which sets this house apart and not in a good way. It's listed as available but I call the listing agent anyway, so my clients and I don't spend three hours writing an offer on a house that sold two days ago. She says, "No, we're not taking offers. We're in contract, but we're waiting for the buyers to sign the seller's addendum." This makes about as much sense as it sounds—you can't sorta kinda be in contract, you're either in contract or you're not, and if you just got in contract, you're not already waiting for someone to sign an addendum before you move forward, and if you're not in contract, you're still taking offers—but I assume that something got lost in translation, that when she says "addendum" she means "counter". Yes, I reason, the seller and buyers must still be negotiating the terms of the contract, but the listing agent thinks they're so close that it's a done deal. But it's not, which is why she hasn't changed the status from active to pending sale. Not a great decision, but one I can see an agent making.
At this point I should have quit making excuses for the listing agent and sat down with my buyers to write an offer on the house, because she'd have to submit it to her seller, whether the house was in contract or not. I did that once, after weeks of getting the run-around, and it turned out that the house was in contract and had been for three weeks, all the while showing as active on the MLS because someone's assistant had supposedly "pressed the wrong button". My manager got a nice and very long apology from her manager, and the apology I was supposed to get from the agent was probably that hang-up I got later that afternoon.
But I don't write the offer. Instead, I say I'll call back in a day or two to see if the buyers and seller have had a meeting of the minds. I do, and this time I guess I'm feeling less open to goofy stories and press the agent hard. And find out that when she said "addendum" she meant "addendum". Seller and Buyers are in contract, but Seller isn't convinced. Stricken with remorse over the "overly generous" terms he's agreed to, Seller is demanding that Buyers sign an addendum removing their inspection contingency—after all, Seller had given Buyers his own inspections—after contractually agreeing to let Buyers have an inspection contingency! In writing, for all the world to see! And a good third of the house—the best third of the house—is illegal!
Whoa Nelly! Can you spell lawsuit? There isn't a judge or jury in the world—except apparently in Alabama, where a recent court decision makes it okay for sellers to lie to buyers ("certain conditions apply", as they say)—that would find in favor of Seller, and most would want to hang him. Say! Did you know that fifty-three years ago I was living in Alabama? In a trailer park? Next to a cotton field? And saying things like "Ah reckon ah'll go down to the crick"?
So what mistakes has this seller made?
10. Decided that he's the boy who can pull a fast one and get away with it.
I have to say it's not a mistake you run across all that often, but when you do, just hope you're not in Alabama.