The condominium in Evanston was almost perfect. It offered space (three bedrooms, a den and a sunroom), grace (1920s vintage styling) and a realistic asking price ($315,000).
But it sat on the market for two months without a serious nibble. Many lookers felt it had a fatal flaw, what the real estate trade terms
”functional obsolescence,” a feature that makes a property less workable for today`s lifestyle.
In this case, the glitch was its lack of a parking space.
When a potential buyer finally expressed serious interest provided that parking could be arranged, listing agent Carolyn Smith of Mitchell Bros. ERA in Evanston distributed 250 flyers offering $500 reward for a space. Within 24 hours, an older couple in the area agreed to sell their little-used space for the cash. The condo sold shortly after for almost its asking price.
Not all flaws and other more obvious physical defects can be overcome so quickly and inexpensively. A house without a formal entry, an older townhouse with a narrow living-dining room and doll-size bedrooms or a condo with a horrid view of a strip mall can`t be transformed into a perfect home with the wave of a Realtor`s magic wand.
In many cases, lowering the asking price may spur interest and help clinch a deal. But sometimes a price can`t be lowered more, especially when the market has become hotly competitive.
But there are other solutions. Properties can be marketed cleverly in advertisements and on listing sheets and talked up during showings to accentuate positives, downplay negatives and target likely buyers.
An agent, a client and an outside design professional can collaborate to develop an economical plan to turn a perceived lemon into lemonade. That may involve spending a little money on redecorating, drawing up plans or sketches for work needed to make the transformation, or offering an allowance.
Deceptive? Not at all. Just savvy marketing within the bounds of good ethics, Realtors contend.
Structural and major defects are another matter and legally must be brought to light, even if not obvious or revealed in a home inspection. In this category come leaky roofs, flood-prone basements and unseen termites munching on wood frames.
Different strokes
How honest should agents and owners be about the less-troublesome quirks? Some agents advocate not mentioning such potential problems because they may not be considered mettlesome by a majority of lookers. ”Different buyers have different priorities,” says Reed Hagee, also with Mitchell Bros. ERA. Instead, she says, if a condo is on a congested street she`d tout its closeness to good public transportation, restaurants and cultural amenities.
”Most people who want to live in a major metropolis like the accompanying hustle and bustle.”
Charlotte Newberger, with Beliard, Gordon & Partners in Chicago, agrees and adds: ”If the apartment has air-conditioning, owners won`t necessarily hear traffic and radios on a summer day. I`d stress that the apartment is across from a lovely park, has thick walls and quality craftsmanship not found everywhere.”
When it comes to flaws that can`t be talked away, many agents advise sellers not to undertake excessive rehabilitations that cost a lot of money.
”You rarely get a 100 percent return on an investment made shortly before you sell, even in strong markets,” says Forest Macfarlane, an agent with ERA Arrow Real Estate in Oak Forest.
Changes also can be so personal that quality redos won`t appeal to everyone. ”You may replace avocado-colored kitchen appliances with white, only to learn that a potential buyer really wants a dark country look and has no interest in remodeling,” says Mary-Rita Carey of Koenig & Strey in Chicago.
The best approach, most agents agree, is to weigh how bad the defect will seem to a wide cross-section of buyers, based on trends in a specific price range and geographic area. Owners then should make the least number of possible improvements, but at least gain the opportunity to sell, Macfarlane adds.
Small expenditures sometimes can eliminate defects. For just $80, Eva Bernath of Kahn Realty`s Glencoe office hired a tree specialist to prune a large oak tree that darkened a client`s upstairs bedroom and obstructed views. Presto, change-o
Sometimes, slightly more refurnishing and changes are called for. Judy McEvoy of Mitchell Bros. ERA knew that an Evanston couple`s 1870s pre-Prairie- style house would not only have a better chance to sell, but would bring a higher price if listed and decorated as a four-bedroom with family room rather than as a three-bedroom with upstairs and downstairs sunrooms, the way the couple used it.
McEvoy purchased a laminated armoire for just shy of $200 for the upstairs sunroom, which had the advantage of direct access from the hall rather than through a bedroom. It lacked a closet, however, because of three walls of windows. She turned the downstairs sunroom into a full-fledged family room by moving in a television from another room and buying an area rug for $30. She also encouraged the couple to plaster and paint their living room. The house hasn`t sold yet, but is expected to bring close to its asking price in the high $400,000s, based on traffic and queries.
To spend more money and tackle more work becomes a greater gamble. Often, a safer bet as a next step, especially when defects are more significant, is to call in a professional. Many architects and interior designers are willing to share expertise for free in anticipation of referrals.
Often, a combination of their suggestions and the bait of cold cash-euphemistically referred to as a ”rebate” or ”allowance”-makes an ugly duckling emerge as a swan.
For a recent condominium listing that hadn`t been decorated in 12 years and looked tired, Smith brought in a contractor to estimate improvement costs. She printed up a ”menu” on a large poster that she set out in the condo`s front hall. To replace carpet, for example, would cost $500, to strip wallpaper and paint, $1,500. Clients were offered an allowance of $10,000 worth of changes. The condo sold within a week, though the new owners so far have kept their windfall and left the home intact, Smith says.
Do suggestions and rebates ever become red flags that raise more concern than comfort? It depends on individual buyers, their acceptance of the offbeat or more serious flaws, eagerness to undertake work, and the strength of the market.
Sometimes, the smartest route is to list a house in its existing condition, then bring out extra ammunition if needed, according to feedback agents hear.
No limits
After great debate, Ross decided to show a house that lacked a dining room without placing a table in another first-floor room. ”I didn`t want to limit the imagination of future owners and how they`d use the house. I also didn`t want to clutter beautiful, gracious spaces.”
Ross kept that ace as an option. The property sold ”for a good price”
and the new owners reconfigured the layout and put on an addition to gain a formal dining room, Ross said.
In other cases, clients may be fortunate to have agents who don`t push them to do more than they can emotionally and financially handle.
Newberger, for example, now has clients who couldn`t bear, she says, to pare their overflowing North Side home. To some observers, however, it may resemble a cluttered disaster zone with no appeal. ”Before I take potential buyers through, I set the mood and preface remarks with a little speech. I tell people, `The couple who lives here has experienced very full, rich lives.` ”
Such an explanation seems to obfuscate the potential flaw, Newberger believes. ”Most people react with fascination as they tour the home. I think I`ve enhanced rather than hurt it. I also think most buyers would love to meet the current owners.”
