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VOL. 40 | NO. 28 | Friday, July 8, 2016

Rules? Deadlines? None for me, thank you

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A strange thing happened last week with the closing of 929 Woodmont Boulevard. Priced at $380,000 – $80,000 more than the 2012 sale price and $130,000 more than the 2005 sale price of $250,000 – the home attracted multiple offers and sold for $25,500 more than list price.

All that is standard fare these days, but how the winning contract won the war is unique to the Nashville market.

With only 1,406 square feet and a single bathroom, listing agent Mary O’Neil was challenged as to how to price it, since overpricing a home today can lead to an extended stay on the market.

Resting comfortably on a .32-acre lot, the probability that a developer/builder would be able to make the numbers work for a teardown was not likely. Additionally, the seller was hopeful that the new buyer would want to live in this preserved home.

O’Neil gave all of those interested in making offers her rules of engagement, including that all offers must be submitted by 6 p.m. on the appointed date, and that all would be presented at 7:30 p.m.

At 6, she printed all of the offers and prepared to visit the owner, just as she said she would. As you have read, many agents do not do as they say when it comes to multiple offers.

In this case, it was a buyer’s agent, not the listing agent, who tried to play the role of the fly in the ointment.

As O’Neil was leaving, another offer arrived. Tennessee law requires that all offers received must be presented and countered, rejected or accepted. Realizing the law supersedes her rules, she printed the offer and delivered it with the others.

Upon arrival at this home of ever-growing popularity, she and the buyer huddled and decided to call the buyer’s agent of the late arriving offer for some clarification. Of note is that the last offer was from a developer who had intentions of demolishing the home.

In these situations, the offers are “as-is” with no inspection and cash, but with a due diligence period of usually 15-30 days to allow them to go to the zoning department in order to determine what Metro will allow to be built on the site.

And don’t be surprised when an appraiser knocks on the door, as there is usually a bank involved.

At the end of the due diligence period, it is often the case that the developer requests an additional period because the architect has not been able to complete the plans that would allow the builder to price the construction of the new units.

Sometimes even another due diligence is required. In the case of this house, the builder’s offer was considerably more than the second-place offer, but the agent’s attitude – coupled with the way in which the builder’s offer was constructed – led the potential buyers to their Waterloo.

Within earshot of the seller, O’Neil called the agent and pointed out they had missed the deadline she had established. The agent answered, O’Neil recalls, that she was the exclusive agent for the builder and they play by their own rules.

Gulp. That took care of that.

Then, to further reduce the value of her offer, she asked O’Neil if the lot sloped. O’Neil responded she was not sure of the angle of the slope and asked the agent if her client had not been able to discern that angle they visited the property. “We haven’t seen the property,” she admitted.

In summary, they made their offer late, they play by their own rules and they had not seen the property. Strike three.

Fortunately, Caroline Dean, a rising star, skillfully crafted the winning package and painted the perfect portrait of an offer in a multiple-offer scenario.

First, the offer was “as-is,” but with the option to inspect the home. In this case, the buyer is covered and the seller need not worry of being nickled and dimed to death.

Next, she offered $25,500 more than list. It would surprise many to see how much difference that last $500 can make and how often that swings the pendulum.

Additionally, Dean went over the $400,000 bar. Even in this market, most buyers require two bathrooms, and agents are careful not to show buyers properties that do not meet the criteria of those buyers have established, lest the agents lose their clients.

If the home had a second bathroom, it would have been possible to get $450,000, and as Dean knows a second bathroom does not require a $45,000 investment. She did not allow the lack of a second bedroom to deter her client.

Sealing the deal was a letter that Dean included with the offer. That letter, written by the buyer, explained that she loved the house and wanted to live there and to enjoy it just as the owner had.

These letters, when accompanied by good offers, often rule the day.

The reason for this call to arms is for the agents to realize they must bring their “highest and best” and that highest is not always best.

Richard Courtney is a real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at Richard@richardcourtney.com.

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