April Fool!

by Darrin DeRoches April 10 - 16, 2014

I went to look at a property to be listed today and when I drove down the street, I could see four other homes being worked on, ready to hit the market. The seller of this particular “flip” house had several agents come to look at his property and the first one to “bite” at his proposal would win.     The property is about 70 per cent complete and he wants to list it at a 20 per cent premium without even finishing the work. He believes that people with money can see past the unfinished work and will be willing to pay a premium for his property. It was one of those meetings where even if he was willing to give you the listing you would still have to turn it down. The outside looked great, the workmanship is good, the location is perfect but once you walk through the doors and see the unfinished work and discuss their expectations, you just have to walk away.     I have sold properties in all stages of completion. I do not believe that a property has to be finished and staged to get top dollar. I have sold homes for top dollar with swearing tenants, leaking roofs and foundations but they sold with full disclosure and fair pricing. This seller believes it is such a “hot market’ that he can sell a property that is unfinished, badly designed for a hundred thousand dollars over comparables. It has been over a year since they tried to sell before and the work is still not finished. Once you walk in the door, all the red flags start to fly. After a five minute conversation, another dozen red flags pop up. The seller believes that agents do not have vision and he wants to sue past brokers over certain promises and all the time offering a game plan to sell the home of 4 per cent commission with 3 per cent going to the buyer agent. Then a bonus if you get his ridiculous price. All I could think of was how would I get out of the house with my ethics and real estate license still intact? Any agent who would take such a listing is risking a fine, a lawsuit, or worse. I have worked with all types of sellers and I always find a way to make it work for everyone but sometimes you have to walk away.     The problem is that he did sign with an agent who agreed to his insane plan. There is no way that they can get this home sold for this “fools price”. The agent will lose money just listing the property but since it is in a great area they will risk taking a losing proposition. The listing went from a For Sale By Owner to an agent who chases FSBO to an agent who will list at any price. It is a hot market but buyers are not fools and anyone willing to list a property that is 20 per cent over comparables may be foolish.     Make sure that you do your homework and work with a broker who earns your trust. V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.