Refusing to Take 'No' as an Answer
The lender said the condo wasn't worth the sale amount, so the seller was ready to accept defeat and rent the property instead. But one savvy practitioner refused to give up on getting it sold.
December 1, 2008
Square footage: 1,088
Year built: 1999
Extras: Open floor plan, fresh paint, new fixtures, fireplace, and within walking distance to the popular Moonlight Beach, YMCA, and shops.
THE CHALLENGE: Jordan S. Mossa, a sales practitioner with Prudential California Realty (RSF Main) in Rancho Santa Fe, Calif., says the loud traffic noise in the freeway-facing condominium was a hard sell indeed.
“Buyers would walk in, comment on the noise and walk out,” Mossa recalls.
Fortunately for Mossa, this tumultuous detail was a non-issue for a Caltrans worker (California Department of Transportation) who submitted an offer of $399,000 for the Encinitas, Calif., condo in June 2008. “He worked on the freeway and didn’t mind the noise,” Mossa says.
But when an identical property in an adjacent building sold for $365,000 three weeks into Mossa’s escrow, the practitioner knew an even bigger problem was about to surface.
“Even though that property was bank-owned and ours had upgrades, I told the seller that the lender, a credit union, would use this information for comparison,” Mossa says.
He was right. Shortly after inspections were complete, the bank told the buyer’s representative that based on comps, the property was worth $375,000 max, Mossa says.
Adding to Mossa’s challenge, the buyer was loyal to his Caltrans credit union, which had the lowest rate but the strictest lending rules. And the seller—single, pregnant, in financial distress, and infuriated by the bad news—called Mossa constantly to ask the verdict and remind him that if the offer failed, she was going to give up and rent out the property. “It was very stressful,” Mossa adds.
How did you overcome the challenge?
MOSSA: I stayed really close to all parties involved in the transaction. If there’s a real problem, I don’t try to resolve it over the phone. So I started by inviting the buyer's agent to lunch and convinced him that the only option we had was to go with another lender, one with whom I worked with on a regular basis.
The buyer’s rep was reluctant to move forward, but the buyer loved the property. So despite being loyal to his credit union, the buyer agreed to go with the different lender that approved the loan and the seller agreed to pay the $9,800 in closing costs.
In essence, we reduced the price to $389,000 for the buyer and recorded a sale of $399,000 so that the seller could get the full benefit on her taxes.
It was a real nail-biter. But by getting creative and encouraging open communication with all parties, I ended up with a win-win for everyone.
What was the selling price?
MOSSA: I listed the home in April, and it closed in July for $399,000.
How did you get the listing?
MOSSA: The seller had a property listed with another agent for about six months. She came to me through a referral from someone who told her I would be aggressive.
How much did you spend marketing the home?
MOSSA: I probably spent about $350 with the online advertising on my site, the MLS and Craigslist.com, the virtual tour of the property and surrounding beach areas, and fliers.
How many times did you show the property?
MOSSA: I showed the property about 50 times and held about 20 open houses. I also attended several broker caravans, weekly marketing sessions and tours set up through the North San Diego County of REALTORS® and held at various venues. It costs $40 for registered sales practitioners to showcase a property at a caravan. Some use PowerPoint presentations. Some pitch their listings or talk about their buyers. And everyone can ask questions.
I attended two caravans at a Solano Beach movie theater, handed out fliers, and announced showing times. It’s a great networking tool.
What do you attribute to closing the deal so quickly in a tough market?
MOSSA: Consistency, creativity and calming the seller's urgency when things were getting tough. I convinced the buyer's agent that there wasn’t any room for price reductions. I delivered the escrow package in person, to make sure the deal recorded the next day, which was a Friday. And I brought everyone in real estate transactions together by keeping the lines of communication open and setting expectations in advance.
When things got difficult, I made sure I had a lot of face-to-face meetings with the parties involved to keep the lines of communication open and clear.
What lessons did you learn from this transaction?
MOSSA: The challenge here was enormous but not impossible. I learned that if two agents work together, anything can be done—especially when they’re communicative with their seller and buyer. I also learned that it’s important to stay positive in tough times. The media may play down the market, but I don’t pay attention to the media because buyers and sellers still are out there.
Do you have a "How I Sold It" story of how you used savvy marketing and sales techniques to sell a challenging property? To be considered for a future column, send an e-mail to REALTOR® Magazine Online. You must be able to supply a photo of the property.