Q-Last year I inherited an empty house in the wrong part of town, where I refuse to go after dark. I signed a six-month listing with a real estate broker who said he could get the house sold for me. But he didn’t bring me any offers and I doubt he ever showed the house to prospective buyers. That listing expired about a month ago. The agent didn’t even phone me to try to renew the listing.
About two weeks ago I mailed about 50 information sheets to local realty agents showing details about the house, with its asking price, property taxes and terms (I am willing to carry the mortgage with a 30 percent down payment). So far I haven’t heard from any of the agents, although I offered the selling agent a full sales commission. What should I do to sell this house without taking a loss?
A-I hate to be blunt, but you are doing everything wrong. First, your thinking is confused. Because you inherited the property, it didn’t cost you anything, so you can’t lose when the house eventually sells. Second, sending that information sheet to 50 local realty agents was a mistake. You thereby created an open listing, which is really no listing at all. Most successful agents won’t waste time or money selling open listings because the agent lacks control over the property sale.
Your first step should be to locate the most successful realty agent who specializes in property sales where the house is located. Virtually every neighborhood has an agent who sells the most homes there. Ask neighbors and look around the vicinity for “sold” signs. Interview at least three agents before choosing the best one. Be sure to ask for the names and phone numbers of each agent’s three most recent sellers, so you can call them to inquire: “Were you in any way unhappy with your agent and would you list your home for sale with the same agent again?”
The next step is to sign an exclusive-right-to-sell listing with the most successful agent. You have an especially difficult house to sell, so be sure it is priced correctly. Review the comparative market analysis forms given to you by the agents you interviewed. With the help of the agent you select to list the home for sale, add or subtract value from the recent sales prices of similar nearby homes to arrive at your asking price. The listing should either be for 90 days or 180 days, with an unconditional cancellation clause after 90 days (just in case you choose an ineffective agent).
It is good you are willing to help finance the sale by carrying back a mortgage. However, few home buyers have 30 percent for a down payment. I suggest you lower your sights to a 10 or 20 percent down payment.
If the home doesn’t sell, another alternative is to lease it with an option to buy. I’ve found lease-options can “sell” virtually any residence, if the tenant is given a big enough rent credit. Between 50 and 100 percent rent credit should be the incentive needed to get the purchase option exercised.
Mum on top agents
Q-Following your advice to list my home for sale with the most successful realty agent in my area, I phoned the local Association of Realtors to get the names of their three top salespeople. But I was rudely told, “That is privileged information, which is not available to the public.”
So I had to phone several nearby local brokerage firms to get the names of their best sales people to interview for listing my home. It seems to me it was very bad public relations for the Realtor’s association not to give the public the names of their best salespeople. Why did they do it?
A-Some local Associations of Realtors are proud to share the names of their top sales-volume agents. But most feel it is unfair to the less successful agents. Because so few home sellers ask for this valuable information, I see no harm in Realtors providing home sellers with names of their top agents, but most local Realtor associations don’t agree.
Agent was remiss
Q-I have an ethics question for you. My home seller says I was unethical as a real estate agent. Here’s what happened. I had a listing on her home. Another agent in my office obtained a good purchase offer and I immediately phoned the seller to arrange presentation of the offer.
Meanwhile, I knew an agent from another brokerage was showing the house for the second time to a prospective buyer. At the listing presentation, it didn’t occur to me to inform the seller about the other prospect, because most showings do not result in purchase offers. The seller accepted the first offer.
The next morning at 9 a.m. the agent from the other brokerage was at my office with a purchase offer that was $7,000 higher than the offer my seller accepted the previous evening. I immediately communicated this second offer to my seller, who accepted it as a back-up offer. Now she is mad at me for not telling her about it before she accepted the first offer. Should I have informed the seller about the possible second offer?
A-Yes. A real estate agent has a duty to report all material facts to the principal during the term of a listing. Although every routine property showing is not a material fact, when a purchase offer is being presented and the listing agent knows the property is being shown for the second time to another prospective buyer, that fact becomes material to the seller and should have been communicated.
The seller might have decided to delay accepting the first offer until she learned whether a better second offer was going to materialize. For further details, please consult your attorney.
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Robert Bruss will answer inquiries addressed to Tribune Real Estate Features Service, P.O. Box 280038, San Francisco, Calif. 94128.
