Tell Us Your Real Estate Story

Posted by: Chris Palmeri on March 13, 2009

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.


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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.

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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.

If you’ve got a real estate story to share, send it to chris_palmeri@businessweek.com with a photo of your house!

Reader Comments

Richard

March 14, 2009 3:56 AM

I'm a real estate agent in beautiful Cincinnati. I can't deal with this home in Atlanta, so frankly in this market, having your home listed with a good broker or firm gives you the best odds, not only of a sale but even a decent price.
An agent, maybe chosen from good friends or references, can find many more buyers than you can, and take care of so many complications that could harm or stop a sale.
A house is worth what it sells for, if marketed well [and in decent shape, clean, etc.]; it's not worth what "you want." All owner's, including agents, fall into that trap. You might find someone to pay more than what comparable's go for, if you wait a year and go through many headaches!

Richard

March 14, 2009 3:56 AM

I'm a real estate agent in beautiful Cincinnati. I can't deal with this home in Atlanta, so frankly in this market, having your home listed with a good broker or firm gives you the best odds, not only of a sale but even a decent price.
An agent, maybe chosen from good friends or references, can find many more buyers than you can, and take care of so many complications that could harm or stop a sale.
A house is worth what it sells for, if marketed well [and in decent shape, clean, etc.]; it's not worth what "you want." All owner's, including agents, fall into that trap. You might find someone to pay more than what comparable's go for, if you wait a year and go through many headaches!

Rick Jackson

March 14, 2009 3:03 PM

There is no way I would want someone living in my vacant home. I don't care how much screening went on. Look at this furniture, it is terrible, not appealing at all. I haven't seen any homes that have people living in them that have impressed me. I would rather call a home staging company and have them bring in furniture, but no people. It's worth it not to have strangers doing who knows what to my home.

Indrid Cold

March 14, 2009 3:41 PM

Before 2009 is more than half over, the government and the banks are going to realize that they cannot simply expect the underwater homeowners to take this up the doopha. There are going to be interest rate AND principal adjustments. Indeed, I expect an entire cottage industry to develop around structured personal debt reworking for victims of the real estate crash. Cram down, markdown, call it what you will, the bottom line is that homeowners are going to have a degree of leverage that will spread this loss far beyond the confines of the mortgage holder's contract. Right now, employment is taking center stage, but this (much bigger) shoe is going to drop as soon as people realize the implications off owning a home you'll never really own.

Indrid Cold

March 14, 2009 3:41 PM

Before 2009 is more than half over, the government and the banks are going to realize that they cannot simply expect the underwater homeowners to take this up the doopha. There are going to be interest rate AND principal adjustments. Indeed, I expect an entire cottage industry to develop around structured personal debt reworking for victims of the real estate crash. Cram down, markdown, call it what you will, the bottom line is that homeowners are going to have a degree of leverage that will spread this loss far beyond the confines of the mortgage holder's contract. Right now, employment is taking center stage, but this (much bigger) shoe is going to drop as soon as people realize the implications off owning a home you'll never really own.

Indrid Cold

March 14, 2009 3:41 PM

Before 2009 is more than half over, the government and the banks are going to realize that they cannot simply expect the underwater homeowners to take this up the doopha. There are going to be interest rate AND principal adjustments. Indeed, I expect an entire cottage industry to develop around structured personal debt reworking for victims of the real estate crash. Cram down, markdown, call it what you will, the bottom line is that homeowners are going to have a degree of leverage that will spread this loss far beyond the confines of the mortgage holder's contract. Right now, employment is taking center stage, but this (much bigger) shoe is going to drop as soon as people realize the implications off owning a home you'll never really own.

Indrid Cold

March 14, 2009 3:41 PM

Before 2009 is more than half over, the government and the banks are going to realize that they cannot simply expect the underwater homeowners to take this up the doopha. There are going to be interest rate AND principal adjustments. Indeed, I expect an entire cottage industry to develop around structured personal debt reworking for victims of the real estate crash. Cram down, markdown, call it what you will, the bottom line is that homeowners are going to have a degree of leverage that will spread this loss far beyond the confines of the mortgage holder's contract. Right now, employment is taking center stage, but this (much bigger) shoe is going to drop as soon as people realize the implications off owning a home you'll never really own.

Indrid Cold

March 14, 2009 3:41 PM

Before 2009 is more than half over, the government and the banks are going to realize that they cannot simply expect the underwater homeowners to take this up the doopha. There are going to be interest rate AND principal adjustments. Indeed, I expect an entire cottage industry to develop around structured personal debt reworking for victims of the real estate crash. Cram down, markdown, call it what you will, the bottom line is that homeowners are going to have a degree of leverage that will spread this loss far beyond the confines of the mortgage holder's contract. Right now, employment is taking center stage, but this (much bigger) shoe is going to drop as soon as people realize the implications off owning a home you'll never really own.

Karl Lingenfelder

March 14, 2009 5:14 PM

One should always try to suppress the emotions. Buying a home is very full of emotion and one needs to be prepared to back off if the deal is not right.

Keep a Business-like balance to the emotions and have fewer regrets.

www.viewrAdvantage.com

--- Karl Lingenfelder

Andy Capelluto

March 14, 2009 8:47 PM

My heart goes out to these people who were clearly victims of both an unscrupulous staging company as well as the slow economy. They are better off living in one condo and renting out the other until the economy improves. The concept of home staging is not only for 'high end' homes, it is for every home at any price point. Let me demystify it by saying that it is merely the correct presentation of the home after it has been decluttered, depersonalised, repaired and upgraded and then scrupulously cleaned and finally well presented either with just a few strategically placed items of furniture. This is a service that every Real Estate Agent should offer their clients. I'm appauled by the idea of staging companies placing 'home managers' in someones home - why would they want to do that? When you're ready, List your home with an agent who has an AHS Designation (see www.stagingspecialist.com) They will guide you through the staging process at no additional charge to you. Good Luck :)

cekestner

March 15, 2009 4:04 PM

These folks have the money to do all this, yet they're in some sort of real estate hell? Awwwwwwww.

investment

March 17, 2009 4:42 AM

Thank you for sharing your tale about real estate.

Lee

April 20, 2009 12:01 AM

Sellers need to learn how to seller finance their homes. There are alot of good courses on this and books that can be bought for $20-$50 that will show you how to do this.

Since the seller if providing the financing there is no bank or appraiser needed in the process. If I decided to sell the house to you for $100k at 10% interest and you agree to buy it at that price then we have a deal. After the buyer has been in the property for 3 months he can refinance with FHA into a low interest loan.

Lee

April 20, 2009 12:02 AM

Sellers need to learn how to seller finance their homes. There are alot of good courses on this and books that can be bought for $20-$50 that will show you how to do this.

Since the seller if providing the financing there is no bank or appraiser needed in the process. If I decided to sell the house to you for $100k at 10% interest and you agree to buy it at that price then we have a deal. After the buyer has been in the property for 3 months he can refinance with FHA into a low interest loan. You can always put a balloon payment into the mortgage that requires the buyer to refinance after 24 or 36 months.

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About

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.

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