Selling a home

 

We have only owned two properties.  The first we bought and sold in South Africa and it was a pretty simple process - find a listing, contact the realtor, make an offer and sign the papers.  The same was true for the sale.  Only one realtor and only one lawyer representing the seller in the transaction.

In the USA the common practice is to find a realtor who specializes in selling and have that realtor find a buyer who will also be represented by their own agent.  When we bought our home in 2005 we naively assumed that the process would be as simple and that the buying agent would really go in to bat for us - which, while true to an extent, ignored the affect of the buying agent's own interests (getting a sale and working to maximize the commission they get where possible) which don't always line up with our interests.  We should have realized that the buying agent would underplay disadvantages and pitfalls in the purchase and would encourage us not to bid lower than the asking price - both of which could have saved us money at the time.

Seventeen years later we looked into how to sell our house.  There are a few options that you can use:

The easiest option is to announce the house sale “as-is” and then leave the selling agent to set up viewings with the buying agents who have interested buyers. In theory this will work well in a seller’s market if your house is in an area where there is high demand and you are willing to risk the price being beaten down as buyers discover obvious problems with the house.

For us, the market seemed to strongly favor buyers and we were hearing stories about buyers outbidding each other by offering well over the asking price and waiving common diligence steps (like a building inspection by a professional) it seemed an obvious choice to use.

The second (more difficult option) is to spend some time and money preparing the house for sale.  This is much harder to achieve but is the option recommended by realtors to maximize the number of people who might actually make an offer on the home.

The last option is to make a private sale.  This is fraught with problems because there are no protections in place to protect the buyer or seller from unscrupulous actors.

Our first attempt was with option one:

We had been thinking about selling our house for some time.   I wanted to downsize in preparation for us both retiring and we were encouraged to accelerate this because the difficulties of managing a two home condominium over 17 years was getting annoying.  Our driveway was a challenge as well - in New England winters, the long steep driveway took several hours for Anne and I to clear after each storm.

Anne found a realtor in June who was pretty confident that with the market the way it was.  We could offer our house as-is and have people clambering to buy it.  So we cleaned the house and tidied in the yard, removed some of Anne's nude paintings on his advice and put the house on the market in July. 

 

A photo with the stain in the ceiling and clutter on the surfaces

Three weeks later about 3 families were showing interest but we were getting a large number of questions about a stain on the living room ceiling and other minor repairs needed - after these interested families moved on he let us know that we might want to take the house off the market and wait until next year to list it again.  I got the sense that he was used to selling in a more built-up neighborhood closer to Boston and might have found the north shore buyers' realtors less cooperative  because he was based outside of our area.

We also discovered, after consulting our lawyer about the realtor ‘exclusive right to sell’ contract, that while the realtor helping with the sale would work hard to get you a good price they would also try to maximize what they made on the deal which would not always work in our favor.  We had to get this realtor to explicitly waive the contract before trying to sell within 6 months because it said that he would be entitled to 5% commission on the house as long as his contract was in place.

Second pass (option two)

Almost as soon as the house was removed from the listings our phones started ringing with realtors looking to jump into the action on the promise that they could do what the previous realtor had failed to do.  Anne answered one of them and invited the realtor to come over and persuade us that she had a good plan…. and boy did she.

The plan included bringing someone to advise us on how to “stage” the house and offering some help from a person who could come over and fix many of the small things that needed attention.  She had in mind that we could spend one to two months preparing the house for sale and then listing it late in September.

 The person making the staging recommendations wanted all but one plant per room removed and wanted each room to only have furniture in it that fit the purpose of the room - so extra cupboards, storage/organizing furniture were to be put in storage or thrown out.  She also didn’t want any rooms colored brighter or darker than off-white.  Anne was immediately annoyed at the lack of interest in how we had made the house a home.  

Not only had she cultivated a plant that grew along the walls in our living room but most of the downstairs was full of plants.  She had painted decorative gecko’s and fish in our room which was toned orange and turquoise and her art studio was full of storage and art materials.  She took a break from the staging walk-through of the house to collect herself.  The realtor and staging consultant pointed our that the blander the house was the better people could visualize themselves and their things in it but it didn’t take anything off the sting.

What followed was 5 weeks of crazy, intensive work.  Our realtor's helpful handy man arranged for a dumpster to be dropped off and he started repairing and painting the “trim” on the outside of the house and looking into repairing and painting things both inside and out that needed work.  Anne arranged for a storage unit about 10miles from the house and she started packing boxes while I worked with the handyman to get the dumpster loaded and paint all of the rooms that where deemed too bright.    

 

The stain in the living room was a source of some contention because we were pretty sure it was just that (a water stain) but rather than paint over it I asked the handyman to cut a hole (2ft x 3ft) so that we could look into the source of any possible leak.  
It was apparent that the bath and washing machine area did not have particularly good water insulation in place so any large spills from the bath or washing machine would make their way down there.  He noticed that the washing hose was not fastened properly to the outlet and repaired that - but other than that there were no sources of leaks.

Sealing this large hole in the ceiling of the living room was something he was not confident doing so John (with whom I’d done many hikes in the past) drew on his experience gained as the son of a plumber and offered to come over with his son one night after work to demonstrate how to do the “mudding” - spreading a white paste that is used to seal holes and smooth out problems in the dry wall (sheets of a plaster-of-paris type of substance called “sheet rock”).  
The process took days - applying the mud, waiting for it to dry, smoothing it with a wet sponge and repeating.  At the end after some sanding, a coat of primer followed by a coat of ceiling paint the ceiling was in better shape than it had been in all of our time there.

After 5 weeks we were emotionally and physically exhausted but had reduced the house to an off-white and rather sparsely furnished home.

The before and after photographs of some of the rooms are quite striking.

The house went back on the market and after the first weekend of showings the realtor told us that there were two very interested buyers who had a deadline to submit offers of the following Tues.  By that Wed we had an offer that was more than the asking price that was an easy choice to accept.  Within 45 days of that we had the closing where all the paperwork is signed and we had sold the house.

Postscript (option three)

When we were preparing for our sale we had to get some documents signed by the owner of the second unit in our condominium and he told me a horror story of a private sale which serves as a cautionary tale.

When they bought their unit the seller (my former neighbor) had approached them with a private sale offer of an amazing real estate deal.  He pitched to them the entire building (both units) at less than the price of one of the units.  He had previously asked me to give him photographs of the inside of our home on the promise that his realtor might be able to sell our house as well and he used those photographs along with a walk-through of his unit to persuade them that they were buying both units.

After getting them fired up with the prospect of this “steal” of a real estate deal he had a lawyer prepare the papers for the sale of only his unit and relied on the buyer not reading the documents carefully enough (who reads all the docs?) which they didn’t.  After the sale and on the first visit to the condominium they discovered to their horror that that the previous owner had left a massive mess but had also lied to them about our unit being part of the deal.  I remember him confidently telling me they had bought the whole condominium when I met him on that day and me having to let him know that my unit had not been for sale.  I had not realized until I heard this story that my neighbor had been scamming them all along!

At this point, since they had signed the deal, they had little recourse and, of course could not track down the previous owner to hold him to task on his misrepresentations.  They had paid more than what that single unit was worth but considerably less than what both would have sold for.

When we sold our unit through the realtor there were so many checks and balances in place.  Our realtor made sure that we cleared out the house and garage for the showing - well before the sale - and guided us through each of the regulatory things that were needed.  We had to organize and/or make the house available for various inspections leading up to the acceptance of the sale by the buyer and before the closing (radon, smoke detectors, home inspection) and our lawyer - we found our own lawyer rather than take one offered by the realtor - made sure that we understood the implications of the documents that we were given.  

The new neighbors had no such protections when they made their private purchase of their unit.