PAULA'S SOUTHAMPTON BLOG: How Do YOU Tell The Buyer That The House They Love Is In The Wrong Spot???

How Do YOU Tell The Buyer That The House They Love Is In The Wrong Spot???

How do YOU tell The buyer that the house they love is in the wrong spot???THE FACTS OF THE PROPERTY WERE NOT GOOD

FIVE years ago (2007) I had a buyer who fell in love with a beautiful, historic house that was notorious for it's "Issues". The former owner had major problems with the Village when she bought it. Local zoning laws were not so strict when the Village was first being built in the 17th and 18th centuries and there is now a mix of commercial and residential properties on this particular street.

This very beautiful old house was right next to a non-functioning gas station which was torn down and a new bank was being completed in that spot. I was guiding them carefully to buy another house on Elm Street, a street that was quickly becoming a very popular one for new buyers in the village of Southampton...and it was completely residential.

Because there was a bedroom that faced the street in the Elm Street house, the buyers could not get their mind around buying it---it was an exquisite, brand new house that had everything else they could want. it was beautifully detailed and in keeping with all other traditional homes. They ended up not buying that one.

The house they fell in love with was a beauty---originally built in the mid 1800's, it had historical value and can never be altered or torn down--which was perfect for them. They are very much into the idea of protecting the older houses here in the Village, as was the former owner.

THE SELLER HAD POURED MONEY INTO THE HOMEThe former owner carefully restored the whole house while she owned it, pouring money into it that she probably never should have. The reason I say that is the following issues were unfolding during her ownership:

 

 

  • During her ownership, there had been a fatal motorcycle accident in front of the house. A lawsuit ensued against Southampton Village and even though it did not involve the home owner, she had allowed the survivors of the person who died in that accident, to erect a "headstone" of sorts right inside the hedgerow in front of the home. It was not too big because it had to be approved by the Southampton Village signage laws...but you could see it clearly.
  • The new bank that was under construction was having a terrible time with the Village over the lighting that they wanted in the big parking lot. "Light pollution" was the claim against the bank and they were pressured to lower the  light towers and lower the wattage too. They also were required to plant triple hedges on the residential side of the property--These problems went on for 2 years while the owner struggled with the Village Zoning Board of Appeals. They finally finished construction but it very clearly is a bank next door.
  • The house was on the South side(good) of the road but there was another street that runs perpendicular to said road and as it opened onto this road, the traffic coming South, faced the house directly--in other words lots of more light at night!BUYER FALLS IN LOVE WITH A PROBLEMATIC HOUSE

Even after my suggestions that these were issues they needed to consider, they decided that the house was worth it. They paid a healthy amount for the house and were very excited as they proceeded with the sale. I  love to see happy buyers and I left them at the house feeling as though MAYBE I had been wrong about the potential "issues" and went on with my life.

Last month, I got a call from the "new" owner---they need to sell the house because his business had fallen off badly. As I did the recent comps of the property I shuddered at what I now had to tell this homeowner.

Not only did he overpay at the time (it was the top of the market in '07), the "issues," were now a glaring negative to the possibility of re-sale and ultimately needed to be taken into consideration when pricing the property. As I carefully did my research, I got the horrible feeling that I sold them something that they will never get their money out of. It was comping out at almost half of what they paid for it!!! 

As I made the call to the homeowner, I made every attempt to keep it positive...as positive as I could. It was not a question as to what it should be priced at---it was a problem and I had to tell him that.

He was not very happy as I explained what had happened to the prices here in Southampton Village; I reminded him that he did buy at the height of the market. We had a brief conversation and then he told me his business was turning around and he would wait---since it was a third home for him he had other Doing My researchoptions. I was sick to my stomach after that phone call...

WHAT WOULD YOU HAVE DONE IN A CASE LIKE THIS: IF A BUYER WANTS A HOUSE IN A VERY DIFFICULT PLACE WITH MAJOR ISSUES AND DOES NOT WANT TO HEAR YOUR CAUTION??? In my case, I felt that I did everything I was required to do by law, under the circumstances. I was working for the seller at the time. I had a fiduciary responsibility to the seller and at the same time treated the buyer fairly and honestly...IS THERE SOMETHING ELSE I COULD HAVE DONE???? 

 

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                                     **ALL INFORMATION AND CONTENT IN THIS BLOG IS ORIGINAL TO PAULA I. HATHAWAY.  The views expressed herein are my personal views and do not reflect the views of Douglas Elliman Real Estate

 

Paula I. Hathaway, Senior Broker Associate, Douglas Elliman Real Estate

Southamtpon Village Real Estate Specialist since 1995;  Also Specializes in North Sea, Noyac, Water Mill and Bridgehampton, New York

Diamond , Gold and Chairman's Circle Awards; Top Producer since 2005

 

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Comment balloon 73 commentsPaula Hathaway, REALTOR, LBA • March 18 2011 11:45AM

Comments

Paula: It sounds like the MARKET was the major problem for him; he bought at the height of it. You can't beat yourself up if the negatives you describe did not matter to him at the time. You told him and I'm sure you documented the negatives. He still loved the house! He did not want to sell the house because of the negatives, but because of the MARKET. Everyone is in the same place.

Posted by Hella Mitschke Rothwell, Hawaii & California Real Estate Broker ((831) 626-4000) over 7 years ago

Hella: I know that the market was the problem but so was he---he absolutely did not want to think abou tanotehr house after he saw that one. Now he tells me that there were problems with the owner as well--so there may have been a legal problem which he did not want to go into with me. I just feel terrible if he really needs to sell now. I only hope he is able to pull his business out of the hole it was in and then he and his wife can enjoy their beautiful home again.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

We have some problem houses in our area. (falling into river). I tell them if you want one of those find another agent, I'm not getting involved. ( think being named in future lawsuit).

Posted by Rob D. Shepherd, Principal Broker ABR, GRI (Windermere/lane county) over 7 years ago

Paula,

Isn't it a special business we're in? You're like me--we always want everyone happy and everything to be perfect, and it's hard on those of us who approach our business this way.  I can't think of anything else you could have done.  So remember that you always do your best, and that's the best!

Posted by Michele Norris, ((( Buy or Sell, Call Michele ))) Lake Tahoe NV (Crystal Realty - Incline Village Nevada ) over 7 years ago

Oh, I don't blame you one bit for feeling the way you do, but honestly, I don't think there was anything else you could have done.  You warned them about the potential issues and on top of that the market has just changed and now these 2 areas are a double whammy.    I would try to let it go since it sounds like you did all that could have.

Posted by Debbie Gartner, The Flooring Girl & Blog Stylist -Dynamo Marketers (The Flooring Girl) over 7 years ago

Paula, I do think you did everything possible within your fiduciary responsibility. And so many people are lossing money on investments bought in the hight of pricing as they sell now. We are not magicians, nor are we their parents, so we can't change the situation or tell them what to do!

Posted by Ellen Caruso (Daniel Gale Sotheby's International Realty) over 7 years ago

You can't beat yourself up for this one, Paula. The reasons you cited were very valid reasons not to buy because of resale value, which every buyer should take under serious consideration when they buy a house.

Posted by Cynthia Larsen, Independent Broker Serving Sonoma County, CA (Safe Haven Realty) over 7 years ago

Paula ~ I was selling new construction homes in 2007 and have received calls from homebuyers needing to sell. It is very difficult to explain the value is less than 1/2 their original purchase price. I shared some of the same concerns you expressed. For us all I believe we can only do our best in each transaction but remain ethical, fair and honest - which you were.

Posted by Kristal Wilson, We Like 'Em New ~ New Home Specialist (Strategic Sales and Marketing) over 7 years ago

Rob: I would have done that but these buyers were referred to me by another customer of mine and it was a real problem getting them to see the real truth without making it appear I was steering them...I felt like I was walking a tight rope on that deal..and now it turns out that I may get the listing and will have to to sell it!

Michele: You are so right! It is a very complicated business from a moral standpoint---I don't like how I feel abou this one! I have to stop second guessing myself--I think I would really like to understand how others do it and feel OK about it.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Debbie: I think you are right--there was nothing else I could have done. I do have documentation and emails that i can present if I need to---I just feel very bad for these people now and will try to convey that when i see them again.

Ellen: You are so right--I could not tell them NOT to buy it..they would not have listened to me anyway as it turns out. I think underneath it all, this buyer knows what he did and he knows he went against my best information as I told him of the issues. So I guess I just have to suck it up and go on.

Cynthiha: I think the history of the house and the beauty of the details was a very powerful draw for them--they wanted this house and there was nothing else available  like it at the time.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Kristal: I guess that is what I am going to hear from fellow members--just like you, I had to tell him the horrible news and to hear his tone after I gave him the price was very depressing. I heard a little despair in his voice and that's what got to me.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Paula, 

Completely understand your concerns.  Since I have developed a strong repuation for being very honest, I will tell folks I am concerned if they buy this particular property resale could be a huge challenge if I believe it will be. 

(Specifically for condo's and townhomes in our area, I joke that I need them to sign off on a form saying Michelle was concerned about me losing money if I need to sell before a decade is over and I am letting her off the hook!)  

Having said that, some folks just won't listen, so not much you can do. 

All the best, Michelle

Posted by Michelle Francis, Realtor, Buckhead Atlanta Homes for Sale & Lease (Tim Francis Realty LLC) over 7 years ago

Michelle: That is great--having them sign off on buying something you do not recommend! It is after-all, our reputations that we need to keep in reasonably good order. I was always cncerned too because in every case up until January 2011,  all brokerages here in the Hamtpons were identified as sellers brokerages. Even though I am comfortable with the fact that I was treating them fairly and honestly, it still was a very uneasy transaction for me, knowing that they were buying something that could be trouble later when they wanted to sell it. We now have a very clearly written New York State disclosure form that spells out the differences of the brokerages and the choices that a buyer has so there is not so much of a challenge when dealing with buyers from here on out. But this deal haunts me.....

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Probably like raising kids, you can teach, warn, help, etc. but at some point their going to make decisions on their own & unfortunately sometimes the wrong ones

Posted by Brian Doubleday, Ladera Ranch, Foothill Ranch, Lake Forest, Mission Viejo (Brian Doubleday - IML RealEstate - Orange County, CA Broker) over 7 years ago

Paula~I think when the market changes it tends too magnify these special interest type properties. A good market, like 2007, buyers tend to overlook many very important factors when purchasing.

Posted by Adrian Willanger, Profit from my two decades of experience (206 909-7536 AdrianWillanger-broker.com) over 7 years ago

Brian: Words of real wisdom---thanks for saying that because that is the case here. i could have stood on my head (well, not really!) and they would have bought the house. Hopefully they can find a way to still enjoy it and if they hold on long enough the prices will at least come back to where they were before the crash!

Adrian: You are so right! There are a few more yet to surface that will reveal the same or similar circumstances...I only hope it doesn't happen to another one of mine! (selfishly) It is a shame but I guess that the one thing we must all know when we buy a home: Things change; you have no guarantee that the market will go up or down! 

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Hi Paula,  This happens, people fall in love with something and love is blind.  All we can do is advice our clients and hope that they listen.  Happens alot in Denver where we have open space today, but that could change and commercial could end up buying that open space, then the price will drop.  Do not beat yourself up.  Have a great day.

Posted by Will Hamm, "Where There's a Will, There's a Way!" (Hamm Homes) over 7 years ago

Will: Thank you for the moral support! I know logically that the issues that the property has will NOT just disappear--they will always be a factor in the value of the  property. unless the Village shuts off that street and tells the bank to leave. Highly unlikely so that is why I am so frustrated by the sitiuation--it probably would have disappeared from my mind if they were settled inthere and not going to leave for a good long time but that turned out not to be the case.....

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

The "issues" you mention shine much brighter in a down market!

Posted by Matthew Johnson (Keller Williams Premier Realty) over 7 years ago

It is like a marriage engagement. I have counseled several friends that I did not think that they should go forward with their marriage. Did they listen? No, our friendship faded and they married and divorced. When someone is in "love" there is practically nothing you can say to dissuade them from their decision. This does not mean that we should not say something... but their decision is not our responsibility.

Posted by Scott Petersen (Client First, Realtors - Canton, MI) over 7 years ago

matthew: You can say that again!

Scott: I like the analogy; when we look back on the many people who did not heed our advice, it is not wise to say"I told you so!" either....

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Paula, have you ever tried to reason with a smoker?  They will agree with you sayng they should quit, but they never offer a logical reason for their choice to continue--they just do what they want to do!  Your buyer was hooked on a dream, and had no hold on reality.  It was, "I see it, I like it, I want it, and I'm going to have it!"

Nothing you could have said would have swayed their decision--price was not the issue, problems did not matter, and they thought they knew more than you.  That happens.  I've seen it in six year old boys climbing trees, jumping out of barn lofts, and going into a barn lot--taunting a bull who almost killed them when he charged.

Have you ever challenged your boyfriend/husband's testosterone by suggesting he stop and ask for directions?  He's not admitting that you may have a point.  Your buyer knew he was right, and you became an "order-taker."  He is now enrolled in the University of Hard Knocks--let's see if he gains an education.

HOW DO I KNOW?  I found the enemy, and he is me!

Posted by Fred Cope, Looking For Homes With A Smile (Reliant Realty in Nashville, TN) over 7 years ago

Fred: Thank you so much for your input! Your experience is the answer to your wisdom now and the same will be, perhaps with my buyer---I will get the listing when he decides to sell..that I am sure of. I have made the plans necessary now to get the house out there and sold for him when he comes back. My whole approach will be to get the idea of it's history out there so that whomever buys it will have the same love for it that this buyer had....and I will be revealing all that is necessary to the future buyer as well...there is still hope and all it will take is someone who "gets it" and does not care about the other things. Price will be key here!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

you don't!

what you like or dislike or your business, i understand protecting the client

you provide them with all the facts and let them make a decision.

of course i would have all the facts written down and some sort of reciept of disclosure.

 

 

Posted by Rob Aubrey over 7 years ago

A tough situation, but there is another buyer who just like them wants a home in the Village with historic charm.  It will take time to find the right buyer, but they will come along.  You put up all the caution flags, and they will remember your warnings.  They made their decision.  You did your job well.

Posted by Eric R. Nahm (RE/MAX Suburban Lifestyles Realty) over 7 years ago

You helped the buyer get what he wanted.  You shared the facts with him, but in the end he made the choice.  I get why you are second guessing yourself on this one, but the fact is you did your job.

Posted by Kathy Strader, ASP (Memorial Staged Homes) over 7 years ago

It seems that buying is the emotional side of the transaction and the selling is the intellectual side. Typically, one doesn't understand the other.

Posted by Jan Rankin Richmond, South Delta Realtor (Sutton Group Seafair Realty - Richmond, Ladner & Tsawwassen ) over 7 years ago

Paula I am not sure what else you could have done besides beat some sense into them at the time of purchase.  Disclosure is a real estate agent's best friend and as far as I can tell, you met and exceeded that responsibility.  The rest my dear, is on the buyer now wanting to sell.  Sleep tight.

Posted by Charita Cadenhead, Serving Jefferson and Shelby Counties (Alabama) (Keller Williams Realty) over 7 years ago

It sonds as if you did more than enough. I had someone that worked for me buy a house. We all told her it was not a good house, certianly not what the agent was telling her. She bought it high, got an high appraisal poured money into it and then lost is all to foreclosure, it sold for 100K less than what she paid. I could go on, but the only thing I can say is, I told you so

Posted by Dave Woodson, Not the Average Agent (Dave Woodson) over 7 years ago

Paula -- It is what it is; but when the time to list comes, you should market all those wonderfully positive features that drew these buyers to that house in the first place.  There will be another buyer with a similar mindset. 

Posted by Barbara Altieri, REALTOR-Fairfield County CT Homes/Condos For Sale (RealtyQuest/Kinard Realty Group, Fairfield and New Haven County CT Real Estate) over 7 years ago

Rob: Very smart on your part--short of alienating them, I would do that too; however, I am sure it would backfire on me since they were very clear that they were going to buy THIS house and there was nothing I could say that would change their minds!

Eric: Thank you for recognizing that! I have had such awful feelings since isold it to them--like a bad dream that keeps returning in my sleep! I ahve in my mindalready a couple of people to call when he does list it with me.

Kathy: I did my job, that is true! I need to get that clear in my head--maybe after i sell it again I will feel like I have really achieved something--some peopl have priorities that may include a historic home and the lights may not matter to them! :)

 

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Paula, like Kristal in OrangeCrest, I was selling new-construction in the early- to mid-2000's. Recently, I door-knocked in one of the worst-hit neighborhoods. I told one of the homeowners that I felt like I was the "angel of death" swooping into his n'hood. He interrupted me and gave me great advice. He said "Hey Nancy! We loved our homes when we bought them. You weren't our Mommy then and and you still aren't our Mommy. We're adults-stop trying to take the blame." I could've kissed him!

You must realize that you did the best you could when they bought the home, and that the current market isn't your fault. You aren't their Mommy, either!

Posted by Nancy Aroneck over 7 years ago

Jan: You make a good point and that is the reason I am in the dilemma I am in...it didn't bother me as much until I was told I had to sell it again! Isn't that interesting--I better go get my Historical House mojo going again...and let go of intellectualizing about it!

Charita: Thank you--you are so right! I have to know that it will sell again to the right person and take it from there.

Dave: I can't say that, though..I would lose them completely and the people tehy refer to me as well.

Barbara: you know it! There are many of them here in this area too--they can't find enough of the historical houses.

 

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

nancy: You are right! I am NOT their Mommy and I won't take the fall either for their having made such a mistake..thank you for the support!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Paula, I remember once trying to talk a dear friend out of a place I considered to be a white elephant.  She told me in no uncertain terms to hush and write up the offer.  When, years later, it took months and months to sell, she reminded herself that it was her idea, not mine, to buy the place.  At least she got it for a white elephant price, so the numbers still made sense when she moved.  I think if you had been a pushy salesperson when your guys bought, they would be feeling much worse than they do now.

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 7 years ago

Understandably, buyers are guided by emotion. Reason seems to go way back on the back burner. It's only after people have settled into their new home that emotion and reason do a switcharoo and true realizations come into play. In my job I can't "guide" people into their purchasing decisions - no inspector should. I've had clients come back to me after closing claiming that they never would have bought the property had they known this or that even though the inspection report covered the concerns. It's common for clients to say that they really didn't read the documents pertaining to their purchase. 

I am passionate about my job and my clients but I've learned that that can lead to my own frustration and disappointment if I let it "get the best of me." It seems the best approach for me is to maintain some "distance" from my clients and let them make their own decisions even when it can be a bit agonzing to watch.

Posted by Eric Barker (Moraine Woods Consulting, Inc.) over 7 years ago

Patricia: Good point! I never puished and that may have seemed weird to them at the time; after they thought about it, they had to realize that I was not so sold on the house myself!

Eric: You, of all people! I think it would be the hardest job in the world to be an inspector---I know that when blame is out there to go around, it is not always the agent who gets the blame!  The inspector is probably first to hear the complaints---come to think of it--the buyer did say to me during our conversation something like: "You know, the owner turned out to be a real creep--I would never deal with her again."...So something went wrong early on with the woman he bought the house from....

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago
Hi Paula STOP BEATING YOUR SELF UP. You did a great job for your seller. You disclosed all potential down falls to the buyer and put them in a house they were in love with despite your warnings. None of us are happy our homes are not worth what they were in 07 .............Brad
Posted by Brad Hornshaw, Realtor, Listing Agent, Buyers Agent, Investments (Brad Hornshaw Realtor Lynnwood, Bothell, Everett) over 7 years ago

Brad: Thanks for the positive input! I really need it and when the time comes to sell his house I will let him know that I will do my best to sell it and get him the highest price possible in this market.......

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

I often run into this issue. It sounds like you did evrything possible. You were honest that's all anyone could ask. I know if I tell my clients all the resale issues a house may have when they buy it I won't have any problem reminding them of my honesty when they sell if the problems come up again.

Posted by Laura Coffey, Keller Williams VIP Properties (Keller Williams VIP Properties) over 7 years ago

Hi Paula,

This one is not your fault.  That is the kind of house you buy because you love it and would probably never sell it.  It is not the type of house you turn to sell when business is bad.  Historic homes can't be bought and sold like that in my opinion.  It was obvious that the home needed a unique buyer to re-sell it to and unique buyers (like them) cannot be located quickly (like for a business downturn).  They need to cash in another asset to help them out of their temporary cash crunch.  It is simply not the right asset in their portfolio to liquidate.  My opinion.

It sounds like you went overboard telling them the risks.  But, ultimately it was their decision.  I just wrote a post about putting your foot down with clients -- but if they want to buy a house that they shouldn't there is really nothing for you to put your foot down about.  They were fully informed of all the risks.  That part of the equation is their call. 

And, given the market downturn and the fact that they bought at the top of the market they would probably be down on the home on Elm Street too.  Have you looked at that? 

Just my thoughts.

Tni

Posted by Tni LeBlanc, Realtor®, J.D., Tenacious Tni (805) 878-9879 (Mint Properties, Lic. #01871795) over 7 years ago

Laura: Oh, I will remind them very carefully though! I don't want to say "I told you so" literally but I will remind them when the time is right.

Tni: You are probably right--I think it was a genuine need to sell that brought him to me to see what he could get if he sold now...I appreciate your being able to see the quandry I am in--I love getting this feedback so I can stiffen my spine when I speak to him again..Thanks for your help! 

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Just explain the long term benefits of location and let them make the final decision.

Posted by Dennis & Terri Neal, Your Home Sold in 45 Days or We Se (RE/MAX, Big Bear) over 7 years ago

Dennis and Terri: You are right--probalby the less said the better for me. That is probably what I will do any way--I am not a person of many words by nature.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Stop beating up on Paula! You did your job and then some. You pointed out the "faults" that these buyers could plainly see. You warned them. You gave them the most honest picture possible and they chose not to listen.

Take a deep breath, exhale, and let the guilt float away.

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) over 7 years ago

I have faced this in our market recently as well.  As a mainly second home market we have seen a tremendous number of foreclosures (people do what they have to to keep their primary home when times get tough) so our market dropped almost 50% since 2006.  As such. many of my buyer clients are now wanting to sell and I'm forced to explin that their "investment" hsa lost half it's value.  It really breaks my heart, but that is where we are now.

In terms of telling them about "issues" that is all that you can do and then they have to make the decision as to how they spend their money.  I have had clients fall in love with a house that I have a laundry list of concerns with and they just don't want to hear it.  Thankfully, most still love their homes despite my concerns! 

 

Posted by Gayle Barton, Forsyth County Real Estate, Cumming GA Homes For Sale (404) 710-0204 (BERKSHIRE HATHAWAY Georgia Properties) over 7 years ago

Paula it sounds like you did what you could.  A lot of people bought at the high point and are now having problems.  They have a few more and you did what you could to let them know this.

Posted by Brenda, Ron, Lee Cunningham & Tara Keator, Realtors, Homes for Sale - Phoenix Metro (West USA Realty) over 7 years ago

Nothing you can do! When the disclosures are done right, they know what they are getting themselves into and that's all we can do. Sorry

Posted by Karen Fiddler, Broker/Owner, Orange County & Lake Arrowhead, CA (949)510-2395 (Karen Parsons-Fiddler, Broker 949-510-2395) over 7 years ago

Values dropped across the country. Thye should have known the value wa sdown just by looking at his assessment. These type house are all over around here, and they are all maintenance projects and money pits to a certain extent. But, properly restored historic homes hold their value beter sometines, but the amount of buyers looking for these type of homes is usually less than the amount of buyers looking for a traditional home. How many days was it on the market when they bought it? I think they also should have known that those type of house usually take longer to sell. No sense is beating yourself up over it. It's done now. If his business falters again, and he is forced to sell, he might just have to go with a short sale. Have they looked into a loan modification? If I we're you, I would discuss mapping out a strategy to sell now so they'll be ready when/if the time comes.

Posted by Jeff Pearl, Full Service Full Time Realtor (RE/MAX Distinctive / LIC in VA) over 7 years ago

Marte: Thank you for the support to get past the guilty feelings I have--if only it were that easy. I do know, as I read your comment and others here, that I did do everything that I should have done and could actually not have stopped them from buying the property.  So that much I know now and that makes me feel better.

Gayle: You know, now that you say that and as I look back at other homes that I have sold before the crash in '08, this one stands out because it had more issues tahn the others. However, those have lst their value as well--I have not had the calls from them that I got on this one!

Brenda and Ben: Thanks for your support on this one. I hate to say this but there is comfort in knowing tht the same thing is happening in other areas to other people.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Karen: They did it to themselves---I know that in my mind; my heart is having a problem though and I just have to get past that! Thanks for your support....

Jeff: I have strategized a listing/sale of the house for him and he decided to go ahead and sell another house he has elsewhere because the way it laid out, it was not good for his comfort level. He told me he would consider selling later on, after the market turns around.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Paula, what could you do? You did everything except tell them that you would not write the contract. If I were buying that property, I would have in mind that it would be an historic commercial piece someday since it was next to a bank and that would increase the value. Is that possible to have it rezoned for an attorney or doctor's office? Or is it impossible to change because it is a house?

Let's face it - they were in love and it was the top of the market. What can you do when someone is in love? They will not listen to reason. You tried ~ you did your job and more.

Sharon

Posted by Sharon Alters, Realtor - Homes for Sale Fleming Island FL (Coldwell Banker Vanguard Realty - 904-673-2308) over 7 years ago

Frank and Sharon: In the Village here, zoning changes are almost impossible---we do have "mixed use" zoning which de-values the property because then it becomes a problem like a multi-family would and banks do not appraise those like single family properties. Banks have a problem financing mixed-use or multi-family properties. As a single family, restored and kept as close to "original" as possible, the value is maximized.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

I have been through many situations where I thought there were too many negatives based on the location of a property for my buyers to enjoy it or be able to resell it. I very objectively tell them the positives and negatives and in the end it's their decision. Unfortunately, some people make decisions that go directly against their own best interests.

Posted by Don Kanare, Incline Village Real Estate (RE/MAX NORTH LAKE - Incline Village, NV) over 7 years ago

Don: That seems to be what happened here---I have seen them around town because they can walk to everything from their house. It does have it's positives and that is what they fell in love with I guess. But the bank, the traffic flow right towards their house and the headstone in the hedge row is just too much...we will see when I get to list it for sale.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Dear Paula,

If these clients have other options, maybe they could rent this home out and at least recoup some of their mortgage, while they wait for the market to turn around as it will eventually. You only realize your loss or gain, if you sell. If you can hold on to the property, it is of no consequence and may eventually provide positive cash flow.

Posted by Anonymous over 7 years ago

Paula, that is a tough situation!  It is not your fault that they didn't listen to your advice.  There's not much else you could have done!

Posted by DeeDee Riley, Realtor - El Dorado Hills & the Surrounding Areas (Lyon Real Estate - El Dorado Hills CA) over 7 years ago

Paula I think from what you have written you handled the transaction very professionally.  We are kind like the center of a pendelum balancing a buyer and a seller.  If things work out they make a decision to close.  

Posted by Robert Courtney, Century 21 All Islands, RA, CDPE, MCRE, CIAS over 7 years ago

Sound like you warned them...I hope it was somewhere in writing...buyers have selective memory.

Eve in Orlando

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 7 years ago

#56: Good advice! I will make that suggestion to the owner...we do have a lot of homeonwers who do that but in many cases it is hard for someone to think of themselves as landlords. I will make suggestion and I thank you for  it!!

Dee Dee:Thank you for your support!

Robert: Good analogy---that pendulum is not a fun place to hang, if you know what I mean--especially since he did have trouble of some sort with the owner in this case. I have never heard specifically what it was but it is a dead issue now.

Eve: I have many emails back and forth and I do keep notes also---so I do have it it writing.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

I think if you laid out all the issues to them that was all you could do.  We are not always right and some issues are not relevant to people.  I had a house behind a super market.  That might have been a turn off to some people, but the other positives of the house made it worth while for me.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) over 7 years ago
Hi Paula It is what it is. There is nothing you can do now but deal with the current facts of the market. You did your best for your client then, and you will continue to do your best for him now if needed. Good luck
Posted by Karen Steed, Associate Broker Haralson Realty (Tallapoosa, Bremen, Waco, Buchanan, Temple, Carrollton) over 7 years ago

You were right in acting within your feduciary responsibilities, but then it's up to your clients to decide how they want to respond to that information. Those issues certainly do shine brighter in a Buyers market.

Posted by Sylvie Stuart, Home Buying, Home Selling and Investment - Flagsta (Realty One Group Mountain Desert 928-600-2765) over 7 years ago

No!

a) he could have gotten his own agent.

b) he is an adult and obviously a business man. People need to take on their own risks and responsibilites.

c)TVs, cars, jewelry, everything looses value when bought, the same can happen with RE.

 The more you "nanny" people and accept their risks as your own the worse it gets. The daughter of clients of mine had a sticker on her coat the other day reminding of a day off that was announced in the school calendar months ago. The school puts resources in reminding people that they should not come to school that day. Another case of taking on other people's responsibilities. Time to go back to the roots!

Posted by Annette Sievert over 7 years ago

Gene:Very Good point! I had a house near the train at one point too---worked for me;  not so for many others..thanks for bringing that up!

Karen: Right you are! I will go on and I am sure he will too--maybe I will have the chance to sell i to other buyers..I don;t think there is another way to handle it  but the way I did.

Sylvie: They do don't they? I think the slow market ha uncovered a lot of other problems for other people as well. It is not a good time to try to sell if you HAVE to.

Annette: I think you are right---"time to go back to the roots" as you say

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Paula---

You were honest upfront with them. You can't dissuade Buyers from purchasing a home they have their heart set on. It's their 3rd home, so these people obviously have extra money-----I mean, they are not out on the street, which of course it's easy for me to be blase' about someone's money. But it really was the market's downturn that is the culprit, not you----and you can't be responsible for the eventual downturn of any market-----impossible for you to be culpable in any way.

Posted by DEBORAH STONE (PACIFIC HOME BROKERS, San Diego, CA) over 7 years ago

Deborah: I think you are right on the money here....they surely can see that the downturn was not my fault--and that is why they wanted to sell anyway....so I think they have taken another look at the other properties they have.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

It can be a somewhat fine line between disclosing a material fact of a property versus stating an opinion of the property. I recently showed a home that had a very awkward driveway into the garage. It would probably require several back-and-forth attempts to get a car into the garage. In my opinion it was a big negative - but that was just my opinion. We have a saying, "Do not accentuate the negative." That can be quite different than material facts that require disclosing.

Very much like saying, prior to showing a house, "You are not going to like this house." But turns out, the clients love it. The reverse can be true, too.

Regarding the economy, one of my associates always compares real estate to stocks. He asks if someone has ever lost money on a stock - particularly in the last few years. Real estate is a commodity, just like stock. We say, "It's not your fault, and it's not my fault - it is simply the market."

Posted by Phil Porter (Charter One Realty) over 7 years ago

Phil: Very helpful! I can see that the decisions established by a buyer has nothing to do with me---I had a manager in NYC who used to tell me that: "It has nothing to do with you! Don't talk--the buyer will sell themselves the house if you just let them do the talkiing"...and I can see the stock comparison. Nothing we do will make a stock increase in value!!!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Paula, it sounds like you did all that you could at the time they were considering to purchase the home.  No matter how many times or how many different ways we tell a client about the possible risks/negatives when purchasing a home with "issues", it is ultimately up to the buyer.  I often tell clients, if I have to sell this home later, it may take longer since it backs to a busy road or whatever the issue may be.

Posted by Patricia Beck, Colorado Springs Realty (RE/MAX Properties, Inc., GRI, CDPE) over 7 years ago

Patricia: That is something we all need to keep in mind--in the case of other houses I have sold that had an issue or two, I have never had to re-sell them, ironically--this house has so many issues and the owners do want to use my services to sell it so I guess I had better get into the selling mode!!! :)

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Sometimes we point out all of the negatives and our clients still choose properties we don't think are the best choices. I just took about 40 pictures of a Fannie Mae foreclosure for an out of state client since there weren't many pictures on the listing. As it turned out the pictures told them things about the house that they needed to know. It spent a good amount of time doing it but it was worth it. If they had decided to make an offer they would have known much more about the property. Some people see things differently than we do.

Jacqueline Drake CRS

Posted by Jacqueline Drake CRS, Southeast Arizona land, farms & horse properties (Jacqueline Drake Realty) over 7 years ago

Jacqueline: You are so right, there is nothing we can do to make it "happen" but the worst is when they ignore our cautionary words---I can't shout it out but I do try to let them know the facts about a property.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

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