An Orlando-based sales team arranged for a perfect trade: You buy this house, and the seller will buy yours. See how they used staging and inventive thinking to get the property sold.
August 1, 2008
Location: Longwood, Fla.
Square footage: 2,600 square feet
Lot size: 1 acre
Year built: 1984
Extras: Custom-built, new kitchen, and pool.
THE CHALLENGE: The husband-and-wife duo of broker associate Malte Strauss and sales practitioner Helene Bonello-Strauss of Southern Realty Enterprises Inc., Longwood, Fla., got their shot at selling a Longwood charmer in September 2007.
The expired listing had been on the market with a different practitioner for more than a year and had several price reductions before the couple took over. To add to the challenge, there was roughly 2-years-worth of inventory flooding the local market and not much sales activity.
Despite having a new kitchen and great architectural bones, the custom-built home was tired, outdated, and smaller than neighboring properties. But the Strausses saw potential. The house, located in a prestigious part of the Metro Orlando area, could be the gem of the neighborhood with an ambitious cosmetic overhaul.
“The transformation was a huge undertaking that took hours of hard work,” Strauss recalls.
In the end, the hard work paid off when a young family fell in love with the house. But there was a caveat—in order to buy the home, the family first had to sell its property.
How did you get the listing?
STRAUSS: We saw the expired listing on the MLS and sent the seller a handwritten note that we would like to talk to him about staging and marketing the property. He called, and we met three times before he made a final decision to list the property with us.
How did you transform this property to give the listing new life?
STRAUSS: When we took the listing in September 2007, the seller was considering lowering the price. We suggested a different route that included staging the whole house. We replaced the tired looking grey Berber carpet in the living room with Bamboo hardwood floors and replaced dated light fixtures and faucets. We removed the wallpaper in the master bath, refinished the bathroom cabinets, changed the countertop in the second bathroom, and rebuilt the fireplace mantel.
The seller agreed to have the exterior of the house painted and professionally landscaped.
In addition to the cosmetic changes, we postponed listing the property for three weeks to complete the transformation. We marketed the re-launch of the listing by hosting a broker champagne reception, which was attended by about 75 area real estate practitioners and really helped us lift not only the house out of its state as a stale listing but also increased showings.
We also hosted three public open house events advertised by invitation to area home owners. Each event was promoted as a celebration of the home’s completed interior-design transformation.
We also placed flags placed along the property line and at the entrance to the local community. This gave us so much visual impact, which some visitors mistook as an open house for a new construction model. After 60 days on the market, we received two offers simultaneously.
How much did you spend renovating and marketing the home?
STRAUSS: The total investment for renovations was about $23,000. It would have been more, but Helene and I worked personally for three weeks on many of the improvements to save the seller the additional labor expenses and to keep within budget. We spent around $600 for postage on invitations and about $1,000 for open house events, catering, virtual tours, and newspaper advertising.
How many times did you show the property?
STRAUSS: We had four or five showings by appointment during the 60 days the home was on the market and about 12 showings with other agents. About 12 families attended each of the three public champagne reception open houses we hosted.
How did you finally find a buyer?
STRAUSS: The buyers were a young couple with a growing family who lived in a 1,300-square-foot home in Southeast Orlando. They found the listing on the Internet and liked it very much but said they would need to sell their current home in order to purchase this one.
Coincidentally, the seller's workplace happened to be just minutes away from the buyer’s home.
After talking more and more about the location and features of the buyer’s home, Helene realized this might be a good property for the seller, who was looking to downsize. So, we proposed a house trade to the buyer and seller.
How did the trade work?
STRAUSS: First, both the seller and buyer showed interest and allowed me to prepare a trade proposal. Because of time constraints, the seller made the offer sight unseen with the contingency on a personal inspection.
So after we came to an agreement, we arranged for a home inspection and a personal visit by the seller. He liked what he saw and moved forward with the transaction. We closed six weeks later, simultaneously, on both properties.
In the paperwork, I made both transactions contingent on one another and closed them at the same title company. The actual closing went very smoothly.
The buyers now live close to work and have a larger home for their growing family. And the seller is happy with a smaller home that he was able to pay for outright from the proceeds of his sale. His commute from his mortgage-free home is so short now that he can ride a bicycle to work.
This story is proof that for every pot there is a matching lid. In this case it turned out that we found them both on the same shelf. The house-trade story even got local coverage during a televised segment on the Fox Channel 35 News.
So what was the final selling price?
STRAUSS: We closed in December 2007 and ended up with a sales price of $500,000, which was $50,000 higher than the previous best offer and extremely competitive. Meanwhile, the seller ended up paying $225,000 to purchase the buyer’s house.
What was the key to closing so quickly, and getting such a great price?
STRAUSS: It was the seller’s willingness to work with us, follow our unusual advice, and trust in our vision. This enabled us to make the property more salable very quickly. His willingness to entertain a property trade also helped to make the deal happen.
What lessons did you learn from this transaction?
STRAUSS: Transactions like this make me remember why we are in this business. Sometimes it’s not all about how much you get out of it, but how much you’re willing to put into it. Helene, who has a background in architecture and interior design, had a vision for the house and did not rest until she achieved that total transformation. I’m glad that she pushed me through it.
It has been six months since we closed on these properties, and we have since received a referral from the buyers to help their parents move. So in times where agents often struggle to make a living, this lucky draw helped us to steer through a tough market and enabled us to grow our business.