I received a call from Becky (not her real name) in June, 2011. She wanted to sell a house that she and her brother inherited from their father where they spent their childhood. She wanted to do some work to the house so we met again in July.
According to the CMA (Comparative Market Analysis), the similar size Cape Cod houses in the area sold for $52,000 and $57,000 in the past 4 months. Becky’s father’s house was a little smaller than either of these houses. It had less updates than the $57,000 house, but was in better condition than the $52,000 one. Becky and her brother agreed to start at the price of $54,900. There were four other Cape Cod houses on the market. Their prices ranged from $59,900-$95,500 but they had also been for sale over 100 days. This showed that houses were not moving in this particular market. Our strategy was to sell this house quickly thus it had to be the cheapest house available.
There were outdated curtains from the 1970′s era(!), some furniture in the living area, clutter in the basement, etc… I asked Becky to put neutral window treatments and clear out the whole house before taking pictures and listing the home.
Finally, the house was listed (put on MLS) on Sep. 12. A few hours later we received a first showing request. A full price offer was delivered the next day. This proved out our strategy that good price positioning and making sure a house shows well will move a house even in stagnent market. Counter offers were exchanged on Seller’s contribution to buyer’s closing cost. They went into contract on Sep. 20.
After an inspection, a “Request to Remedy” came in from the buyer. We negotiated for a month but my client and Buyer could not come to an agreement. The deal fell through on Oct.26. Seller did not agree to spend several thousand dollars to fix basement water issues when the house price was set to sell.
Another full price offer came in and they went into contract on Nov. 7. We disclosed the basement condition from the previous inspection, but the buyer made no request to remedy after a satisfactory inspection. We moved onto the final stage. An appraisal for financing was scheduled on Nov. 17. The loan was approved with the conditions to remedy basement’s structural and mold issues. Becky considered to list it “as is” (she would probably have had to drop the price more than cost of the remedy) or to raise the price for several thousand after fixing the issues (there was no guarantee for an offer to come in at higher price). However, she decided to fix the basement. It only cost $2600 total not the several thousand dollars the initial inspector reported. We closed the deal on Dec. 27.
【Comments from Akiko】Structural damage and mold issues to the basement occur from allowing water to enter the basement over time. If you are a home owner, I recommend you always assure that your gutters are cleaned, downspouts are carrying water away from the house, and the ground around the house is graded so water is not flowing into the base of house. These are inexpensive preventative measures that will save you a lot of money later from fixing possible structural damage and mitigating mold issues.