Having a listing is a good thing is Los Altos because they usually sell rather quickly (average days on the market hovers around 25 days) and they usually sell for a lot of money (average sales price hovers around $2,000,000.). This type of real estate activity makes for an exciting month or so for the seller as well as the listing agent.
Over the past several months, I have been involved in situations that make me wonder about the capabilities of some of our area’s listing agents. I’m not about to talk about specific agents and I will write in generalities, but I can tell you that senarios have come up where the listing agent(s) have cost their home sellers a sale and may lead them into legal troubles as well. Worse yet, I don’t think the agents realize that their livelihood is at risk.
Scenario One – Newbie agent is in over his/her head:
Newbie agent takes a listing (probably a relative – sarcasm added). Agent has never had a listing or sold a home in their life. License is so new, the ink hasn’t dried. As a home seller, this is the type of person I want to help guide me through the home selling process. But at least I think his/her fee was cheap!
The Property comes on the market and is entered into mlslistings.com (our local MLS service provider). Overall, the home was poorly located and over-priced for the current market, but it did have an over-sized lot.
I had a client who was interested in the property. I showed it to them and they seemed to like it enough for me to begin an analysis of the property. After research and a series of questions in which the agent had problems answering, I determined that is was a “short sale” in the broadest sense. I also learned that the homeowner had used the property like an ATM machine, taking out several hundred thousand dollars over the past few years. I thought they had awfully nice cars. Lastly, I found out that the seller’s plan was to sell this house and buy another more expensive home in the area.
After spending several weeks doing due diligence, several problems arose:
Fortunately, I relayed this information to my buyer and recommended that he pass on this home and look elsewhere. None of us wanted to get involved in a situation that clearly looked as if it were heading for trouble. Thankfully my client listened and is now looking forward to moving into a muc nicer property in a few weeks.
Scenario Two – Agent needs to check out the home before putting it on the market:
In this scenario, a new home was listing for sale that appeared to be a fabulous property. My clients had been looking for a large custom home that they could raise their family in and this home looked to fit the bill. Upon walking through it, it was clear that this was the home. It had the right floor-plan, the bedrooms were large, the kitchen was well appointed but not flashy. The yard was expansive but not too much to take care of. This was the house.
Upon picking up and reading through the disclosure package, the property slowly began to lose its luster. There were questions about the size of the home. Was it XXXX sf or was it smaller? There were questions about landscaping and what could be done to the property. Was the home built to the specifications of the architectural plans or not? What was built with permits and what wasn’t? Could a pool be built? Lastly, the CC&R’s stated that any changes to the property had to be approved by an individual who lived in the area. My clients didn’t like strangers determining their landscape design.
All of these issues should have been addressed and clarified with the seller prior to putting the home on the market. It looks like the seller is getting these issues rectified, but its after the fact. The horse are already out of the barn. I know my client is now turned off because their afraid that further issues may turn up. What else has the seller conveniently forgotten? I also know other buyers have walked away for similar reasons.
If the listing agent went through the disclosure information with the seller, he/she should have known that anyone purchasing this property would want “clear” title to it and they would want to know the correct size of the home. As it is now, the house size has been changed/reduced by over 10% in the MLS. Funny though, there hasn’t been an equivalent change in the asking price. The agent is also feverishly working to get the issues related to the title worked out. For my client, it is too little too late.
When listing a home for sale, most of the time you only get one chance to make a good impression. If the home comes on and its not ready, you’ve lost that chance. After that, you’re just playing catch-up. Unfortunately, in scenario two, I think it will cost the seller some cash, because the home will take longer to sell and its price will have to be substantially reduced to get it to sell.