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Reader Steven Lane tells his tale of a horrible home manager and a house swap that almost happened….
In 2004, my wife and I met as neighbors in the Village at Grant Park, a small townhome community in the up-and-coming Grant Park neighborhood of Atlanta. We dated, we married. In January of 2007, I put my townhome on the market for $240,000, which would have yielded a decent profit from my $198,500 purchase price.
We spruced up the place by contracting with a staging company using their home manager service. Generally, a staging company is only used for high-end real estate, but for some clients they offer a home manager. A home manager lives in the home, rent- free, with stage-quality furniture. The manager pays all utilities, makes sure the home is show-ready every morning, and is contractually bound to clear out within 15 minutes if there is a showing. Over a six- month stretch, our first home manager “staged” the house with oversized pictures of her & her boyfriend, a no-no in any real estate guide. The dirty dishes in the sink didn’t help. We asked the staging company to find a new home manager. They did. He smoked. In the house. That put a quick end to out time with the staging company, and to agent #2. Now, our listing price was down to $219,900, a break-even point for us financially.
Luckily, a friend of my wife’s needed a place to rent. We gladly welcomed her. In exchange for a friends-and- family rental rate, she’d keep the place staged and tidy and be able to clear out in the event of a showing. The rent helped us slow the bleeding that was our lost mortgage payment and HOA dues each month. And the house received some TLC it didn’t get from the home managers. We actually de-listed for a while and tried listing my wife’s home, the one we still live in, an end unit with more premium features and value. During this time, our first home manager re-emerged, having attempted to fraudulently use my identity as a guarantor on a car loan. Yes, we could now add identity theft to our list of real estate troubles.
In summer 2008, we listed my old place once again, now with agent #3.
Agent #3 seemed aggressive and ready to go, providing a much-needed jolt of energy and passion to the proceedings. That energy faded with the market, and it was clear our $215,000 listing price was still too high. We received our first offer, a $180,000 deal from a young guy who scheduled six separate showings to make sure it was the right place. (This is the point in the story when I sigh deeply, lamenting the lack of affordable time travel.) I rejected the deal, countering closer to $200,000. The deal fell through.
By Fall, agent #3 was on to other priorities, and my wife and I realized that with everything we had learned, we could probably do an okay job marketing the home ourselves, and by saving the selling agent commission, afford to drop the price to market levels. So in November, we hired agent #4 - ourselves. We paid a flat-fee listing agent service to get the home up on MLS at its new price of $200,000. We created our own web site, www.villageatgrantpark.com, pouncing on the neighborhood’s url when the original builder let his license lapse for lack of funds. And my wife placed listings just about everywhere. One of those listings was an offer of a housing swap. In the Craigslist ad, she offered both of our townhomes in exchange for one house in suburban Fayette or Coweta counties, both areas closer to her work and family, where we’d like to be eventually.
Shockingly, we had a taker! A couple of empty-nesters in Peachtree City were looking to downsize and move intown. Both our homes were under contract, and we loved the house we would be moving into. That is, until the inspection. Unfortunately, when something seems too good to be true, it’s probably because it needs a new roof and siding. To add insult to injury, the appraisal of the house came in a full $50,000 below where the empty-nesters needed it to in order to make the deal work. My wife and I crunched the numbers and realize, for the very first time, that we were better off staying put, with four monthly mortgage payments and two HOA dues, rather than take on an overvalued fixer-upper. We terminated the deal just this week, and are regrouping, right where we started, selling my vacant townhouse.
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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.