The Real Estate Crisis Hits Home - Part 1

This is not a comic blog post or an internet marketing blog post. This is one of those personal blog posts...very personal - and I struggled as to whether or not I should publish it. However, there are big lessons learned here and if they can help anyone...just ONE person...then it is worth it.

I bought my house at 1723 Overbrook Drive in Rock Hill, SC in 1995 for $268,800 - you can see the pictures and so forth by clicking the link. Fast forward to 2008 when my girlfriend, Melissa, and I decided that it would be much better for our relationship if I moved in with her up in Swannanoa, NC near Asheville, NC. Well, to do that, I needed to sell my house so I contacted the #1 realtor in South Carolina to get it listed. The house was cluttered and I had next to no knowledge about how to prepare the house for the listing. The agent said that a) I needed to de-clutter and b) I needed to get a home inspection and take care of any major items. The agent listed the house in February of 2009.

Melissa asked about open houses - both a broker's open and an open house for the public. The agent said that open houses do not work in Rock Hill. Well, being naive, we accepted that and didn't push back. That was stupid...no wait..."naive".

We got the inspection performed and were glad to see no major items except for a back deck that was in degrading shape. We eventually fixed EVERY single item in the report and eventually went WAY beyond was in the report - more on that later.

To make a long story somewhat shorter, we didn't get many prospective buyers and after three months, I asked the agent what is the ONE thing we could do to help bring in buyers. He responded to paint the interior as much as possible. Nice idea but there was a ton of wallpaper in that house - almost every room. Well, Melissa and I started removing the wallpaper. Lesson #1 - some wallpaper is applied professionally and is fairly easy to remove and some is applied by DIY amateurs and it is the PITS to remove. Guess what type we had...

Anyway, the six month listing period was coming to a close and nothing was happening at all. It was then that we realized that there are several types of realtors out there - one is the type that gets as many listings as possible in the hope that several of the listings will be sold by other MLS realtors - i.e. throw enough pasta on the wall and see what sticks. Not a bad business model if you are the realtor - a horrible one if you are the seller because your agent isn't really relying on his own staff to sell the house as much as he is relying on the greater Rock Hill real estate community to sell the house.

I looked at the listing on the various real estate websites and saw that the square footage was around 500 square feet LESS than what I thought it was. Ouch...because when realtors do "comps", they look at the price per square foot and my house was not holding its own well because my cost per square foot was higher than comparable listings. I brought this to the attention of my agent and his position was something like "I'll remeasure if you want me to but my guy is pretty darn good and it is rare when he makes a mistake...but I'll remeasure if you want me to...". I should have had him remeasure but didn't as I wanted to do my own research. My agent now was the same one that sold the house to me in 1995. I reviewed the listing documents from then and lo and behold, I was right about the square footage. You would think that the realtor would have looked at his own records when I mentioned the discrepancy but he did not. Lesson #2 - Review your listings in mind numbing detail - make sure EVERYTHING is right. There are no "do overs" for the few people that looked at the house and saw the higher price per square foot than other comparable listings.

When I brought the proven discrepancy to my agent, tempers heated a little and he finally blurted out that the reason my house did not sell was its poor condition. "Poor condition" in this context means that my house was too cluttered because structurally, it was in fine shape. I asked him, "Why did you list the house when it wasn't ready to list?" And his reply was something like "I did it because I've known you for awhile and that is what it seemed you wanted to do". Yikes! I'm not the expert here, I NEED TO HEAR WHAT IT IS I NEED TO DO and I don't care if it hurts my feelings! Lesson #3 - if possible, avoid realtors that are hesitant to tell you things you don't want to hear. The market is SO tough and the last thing a seller needs is a realtor that doesn't provide the "tough love".

Obviously, I didn't renew the listing with that realtor - heck, he even let the brochures at the "for sale" sign run out - we had to tell him that it needed refilling. The next realtor we chose is a fairly dynamic person that runs pretty much a one woman show - her credentials were impeccable - several awards, great closing stats...the whole nine yards. She came into my house in August of 2009 and noticed that a number of items needed to be taken care of like interior painting, a few remaining inspection items and detail cleaning - i.e. where you take a tooth brush and get into the cracks in the kitchen and so forth. She said that she could sell my house but she wouldn't list it until a number of items were completed and she gave us a list of what we needed to do. FINALLY, someone is going to tell me what I don't want to hear but NEED to hear. Um, but when we asked her about open houses, she too said that open houses don't work in Rock Hill. Oh well....

Anyway, Melissa and I rolled up our sleeves and started really addressing EVERYTHING cosmetic in the house. I don't remember how many trips to Goodwill, Habitat for Humanity and the local dump we made - it was several. We even used 1-800 Got Junk twice (they are FANTASTIC!). We hired a painter to remove the wall paper and paint the house as well as epoxy the floor of the two car garage, got all the inspection items finished and even decided to replace the deck. Unfortunately earlier in the year, the downstairs gas furnace went on the fritz so a whole new HVAC system was installed for the downstairs which included a gas furnace and heat pump. We also replaced the condenser coil for the upstairs air handling unit which is tantamount to replacing the whole unit. We even hired tree guys to trim up the outside trees. There were several other items we had done but this is already getting long as it is.

Eventually, we staged the house with some of Melissa's stored furniture and so we had to have movers to get that stuff down here. Bottom line is that we spent close to $50,000 in cosmetics, moving & hauling and repair with the majority of the money going towards the cosmetic end of things - just to get the house listed. Yep, 50 large....

Well, our new realtor was ecstatic and said that we did our part and she was ready to do hers - so the house was re-listed in November of 2009 and we were excited....but it didn't sell. What to do? The house was draining me fairly fast and I had to get something done or my nest egg would get hit.....hard.

We'll finish it up in Part 2 later this week....