Should you hire a real estate broker, even if the neighbor wants to buy your house? Is it really worth it to pay a real estate commission? Many times homes are sold off-market, to the neighbor, or a friend of a friend… sellers feel it makes good sense – save money on the commission!
Last week I sold a property in West Covina – a Trust sale. I made my recommendations and my team got to work, making minor repairs, replacing doorknobs and light fixtures, a thorough cleaning, yard cleanup and manicuring, and then staged it. My recommendation to my client was not to waste money on renovating the kitchen and bathrooms – staging would create a huge appeal that would draw attention away from the outdated tiled kitchen and bathrooms.
I got the property ready for market in one week, and waited my usual 10 day period to expose the property to the market. We got 19 offers, over asking price. One of the offers was from the neighbor across the street. We made a request for highest and best from all buyers, and the neighbor was in the top two, increasing the purchase price by $90K. I then picked up the phone and negotiated with the top two offers, and was able to bring up the neighbor by another $20K, and, the buyer agreed to remove all their contingencies. Property was listed at $849,900 and sold for $990,000! That’s $408/sf, while the highest sold comp is at $387/sf and is completely renovated with new bathrooms and kitchen. My client is thrilled. Presentation is critical. So is negotiations and that extra push and effort by your agent. Our services are available throughout California. Check out the property below:
Category: Strategy (Page 1 of 2)
Probate Court Real Estate Sales A Proposal to Expand the Statutory Rules.
Real Estate Broker and Author Orit Gadish has identified that the current court confirmation process is prone to some confusion, unnecessary delays, and possible litigation and proposes a solution to mitigate this risk. Judge Glen M. Reiser has joined forces with Orit Gadish to fine-tune the proposal that will improve the way real estate court confirmation sales are conducted in the future.
I have a vendor that specializes in the complete remodeling of homes that I use again and again and again. He does a fantastic job.
I have never calculated how much business he has received from me this year, last year, or the year before.
I never calculated how much money he is making on projects.
I do not know his home address, nor do I know how large his home is, and if he has a 2nd home, or other investment properties.
I never think about limiting the amount of business I send his way, because he is too successful.
I only have two questions for him each time I want to help my clients with a renovation:
- Can you handle another renovation right now?
- Can you do it in this town or that city?
He almost always replies with:
- Sure, I can
- Sure, I can
And he gets the business.
If I am not your vendor yet, try me. You will see there is more than the four books I wrote and an ongoing contribution to the CEB.
If you tried me and realized I am good, will you let me handle your next listing, or will you calculate how much I am making and where I live, and then turn to a different agent that may end up delivering less optimal results?
I see agents boasting about selling a property in one, two, or three days. And some people think this is impressive.
After nearly 20 years in the business, I still do not understand what there is to boast about.
Is it not better to give the property the proper exposure and leave it active on the market for 10 days or so, and have at least two open houses (on consecutive weekends)?
Do we not want to give properties time on the market to expose them to as many buyers as possible?
Is it not better to create competition among buyers by waiting to have a multiple-offer situation?
If the property remains on the market long enough this can easily result in competition among buyers with a multiple-offer situation, which results in increasing the purchase price as high as possible, as it does in bidding wars.
This past week I had two closings – a Probate sale requiring a NOPA in Lancaster, and a Trust sale requiring a NOPA in Lomita.
The administrator of the Lancaster sale is located in Northern California, and requested “full service”. I had my vendor clear out the property, do a sales clean and carpet shampoo within a few days, and we got the property on the market.
The PPF, acting as trustee for the Lomita property requested the same level of service. My vendor completed a trashout, sales clean, and did some yard cleanup and landscaping to increase the curb appeal.
Both properties sold above market value. These properties were both outdated, and both sold to owner-occupants, at values equivalent to renovated properties in the immediate neighborhood. They were clean and they smelled pleasant, so the buyers could envision themselves making the renovations slowly, based on their vision and preferences.
Both of these buyers did not request any repairs, credit, or price reductions from the seller.
It was smooth sailing. The beneficiaries of both sales all consented to the NOPA. Everyone was happy.
Why didn’t the buyers speak up after the inspection, and use their strategy to request a repair, and then, agree to a price reduction in lieu of that repair?
That’s because before I had the sellers accept their offer, I requested to have a call with the buyer’s agent and the buyer, and I anchored that discussion. I told them both that I need to set the seller’s expectations at this stage, and ensure we’re all on the same page. If there are any requests for repairs, or credits, or price reductions, the seller will simply move on to the next buyer, and there are many other buyers interested in the property. Both buyers confirmed they understand, and from that moment on… they both performed beautifully!
This strategy is just one strategy I’ve developed over the years to ensure I deliver a seamless and easy sales process for my clients while obtaining the highest possible purchase prices for the properties I’m selling.
Some clients believe agents need to specialize in a localized geographic market, because they have their finger on “the pulse” of that market, or they “own that market”. Other clients believe agents specialize in a particular style of property, say mid-century modern, and only hire agents with that specialization when they have a property to sell. Don’t buy into this! It’s just a marketing gimmick an agent uses for personal branding.
As a real estate broker who has been doing this up and down California for almost two decades, first representing financial institutions, and later representing fiduciaries exclusively, I can tell you that the most important attributes of the agent you hire are their negotiations skills and their contract knowledge, and that, an agent obtains with lots of transactional experience. Doesn’t matter where they’re located, and whether they have their pulse on the local market. If the agent has transactional experience, the agent knows how to market real property, and how to evaluate any given market with the tools at hand.
Just some tips on what to consider next time you need to hire a real estate agent to sell your property. Ask the agent you’re considering how many properties they’ve sold in the past year, and, how many they’ve sold since they became licensed. That will tell you how experienced the agent is. You should also ask what the agent’s role is in the sale. Some agents are hands-off and are not as involved in the sales process – they have a team that handles every step of the process, and the listing agent is busy seeking the next listing. Sure, the transaction will close, but had your agent been more engaged and utilized strategies to act in your best interest, perhaps you would have avoided issuing a price reduction to a demanding buyer, and, perhaps you would have been able to obtain a higher purchase price if your agent was proactive and pushed the buyers to offer more, and more.
Food for thought.
We recently created our first virtually staged 3D Tour… on a Trust sale requiring court confirmation. The property is the former residence of the Laemmle family…Carl Laemmle Jr., the producer of Dracula and Frankenstein. Carl had this home custom-built for him back in the day, perched up on Tower Grove Drive in Beverly Hills, 90210.
The house was not staged at the seller’s request, but we did virtually stage every image of the 3D tour and put them together into a video… check out the video via the link below! It’s amazing what technology can do.
You may be thinking NEITHER!!! Just sell it AS IS!!!
I’d like to share with you a story…. an attorney referred a client to me… she needed to sell grandma’s home. He referred her to me because a CASH BUYER approached her and offered to pay her $425,000 CASH and he will take care of cleaning out the house. He will buy it AS IS!
When I spoke with her, she stated that she had no funds, not even to rekey and secure the property, and it’s a mess inside, and she doesn’t want to deal with the headache of cleaning it up, which is why she was inclined on selling it to the CASH BUYER and not placing the property on the market.
I offered to have the property rekeyed for her and cleaned up with NO upfront cost. She liked my proposal and agreed to proceed.
I visited the property with my locksmith and clear out vendor, the yard was severely overgrown, and the padlocks on the gates and garage were previously placed by her brother……. my vendor was able to secure them with new padlocks, and, we got the property rekeyed. The kitchen and laundry area had paint hanging from the ceilings… it looked like this:
My client just walked in and came right out… she was frightened by what she saw.
Two weeks later, it looked like this:
For $3,000 the yard and the interior of the home were cleared out, the peeling paint was scraped off and touch-up paint applied, and the house was cleaned so that it smells and looks good.
AND my vendor also spent a couple of hours with my client in the garage to sort through the personal property that her grandma left behind, so my client can keep those items that have sentimental value…
The reward: We just sold it for $570,000!!!
That’s $145,000 over what she was offered by the CASH BUYER!
We sold the property to owner occupants, a nice couple who work in the construction industry and are now working to renovate the property for themselves.
We also had many CASH offers on the table, but none were close to the highest financed offer of $570,000.
Is my client happy with her attorney for referring me? Absolutely!
You see… it’s not necessary to have a complete renovation in order to sell a property to an owner-occupant at top dollar…. Sometimes it’s enough to just do a “QUICK FIX”, so that buyers are not distracted or disgusted by paint hanging from the ceiling and bad smells…. You want to allow the buyers to be able to IMAGINE themselves living there. Some owner-occupant buyers don’t mind remodeling themselves…and some are in the construction industry as were these buyers!
Some in our industry are under the impression that they must have the property auctioned when they need to sell a property quickly.
This is never the case.
Before I explain why let me provide you with a quick background. At Geffen Real Estate, we have experience conducting real estate auctions. And so, if you wish to auction your property and have not done so with us before, you are welcome to give us a try.
However, if your goal is a quick sale, all you need to do is work with your real estate broker to price the property well below the comparables, and list it on the MLS with a relatively short deadline for offer submission, require that offers are cash only and are non-contingent. You can also request a larger EMD, such as 10%, to weed out the weaker buyers.
The results are superior to those of an auction! How so?
Either way, the property is listed on the MLS well below the comparables.
Either way, you can choose to accept cash offers only. Just state so in the MLS!
Either way, you can define when a property will go under contract. How? Specify in the MLS a deadline for offers.
Either way, you can require a quick closing. How? Specify a 10-day closing in the seller’s counter.
So, what’s the advantage of not selling at auction if everything is the same?
Some people may not be able to attend the auction on auction day, but they all can submit their offers at their convenience by a specified date in the MLS! And so, the pool of potential buyers is increased, as is the competition.
And if you think there is more pressure placed on buyers at an auction, remember that buyers are typically investors, and they have their limits calculated before arriving at the auction. They can be pushed to the same limits via a set of counters if your agent is experienced and knows what they are doing.
Orit Gadish is a member of the National Auctioneers Association.
You have a situation where the real property you are managing needs to be sold and is full of personal property and trash. Completing a trashout and cleaning the property costs thousands of dollars. The estate or trust does not have the funds to pay for these services.
Your agent may offer you to sell the property “As Is”, with all of the debris and personal property to be included in the sale. The standard verbiage of the C.A.R. purchase agreement states that “all debris and personal property not included in the sale shall be removed by Close of Escrow or at the time possession is delivered to Buyer”. This term can be negotiated and addressed in a counter or addendum, stating that the seller will not remove the property’s debris and personal property. However, marketing a property in this condition will not appeal to owner-occupants, who typically can offer more than investors.
Investors will use this condition as leverage to offer less. Since the property is full of debris and personal property, investor buyers may not be able to determine what the floor and walls look like, what damage exists, or if there’s mold and water damage, which will affect their bottom line. This creates added risk that they are required to take, which does not result in the highest and best offer.
Alternatively, my firm’s network of vendors can handle the trashout and cleanup, and the estate or trust can pay for their services through escrow once the property has sold. This includes the services of an organizer who will sort through the items, create an inventory list, determine the value of these items, and facilitate the sale of the valuables. This approach maximizes the property’s value for the estate while minimizing your liability.
For more information about this or other probate real estate related topics, please contact me at 323-606-1919 (call or text).
You have a situation where you need to sell real property that’s occupied. The occupant can be a paying tenant or someone that was not authorized to occupy it. In some cases, the occupant is one of the estate’s beneficiaries. The occupant does not want to vacate the property, is unwilling to provide access to the property to show it to prospective buyers, and refuses to allow access to your agent to conduct open houses or any combination of these.
You consult with an eviction attorney, who advises that the eviction process may take at least six months, or more, and there is a cost. The estate or trust does not have the funds to pay for the eviction, or, needs the funds from the sale as soon as possible and can not wait for the duration of the eviction.
What to do?
Owner-occupants won’t purchase a property they have not seen, and, won’t be willing to take on the risks of an eviction and the costs involved. You can, and many agents will advise you just to sell the property occupied. This will require you to sell the property at a substantial discount to an investor. Many agents will tell you they already have investors lined up to purchase such properties, and they do! But will this generate the best and highest value for the estate? Would this be acting in the estate’s best interest? Would you be upholding your fiduciary duty and your commitment to act in the best interest of the estate?
There is another option to consider! You may offer the occupant relocation assistance for vacating the property within a short period of time. I have completed these transactions hundreds of times and developed best practices that motivate the occupant to cooperate with me and leave in a short period, usually two weeks. If the estate doesn’t have the funds available for payment of the relocation assistance, my firm can provide those funds and will obtain reimbursement through escrow once the property has sold.
For more information about this, or other probate real estate related topics, please contact me at 323-606-1919 (call or text).