Success Through Project Management
For a California-based practitioner, a great Bay Area listing was complicated by a series of unfinished home improvement projects, and a messy divorce.
October 1, 2010
Location: Los Altos, Calif.
Square footage: 2,330
Lot size: 11,000 square feet
Year built: 1952
Extras: Spa. Cathedral beams in the living room. Gorgeous inlaid hardwood floors.
THE CHALLENGE: Nationwide retailers such as Lowe’s and Home Depot and TV shows that focus on home renovation often make do-it-yourself projects look as easy as one-two-three. But many weekend warriors find that despite big dreams, their DIY plans fail to materialize.
This was the case for the Los Altos, Calif., property owners who turned to Cres McFall, GRI, broker-owner of Sunnyvale, Calif.-based McFall Real Estate, when looking to sell their single-story Bay Area home in April.
“The husband had decided to make some minor repairs to a hall bathroom in 1998. When the wife called to ask me to list the property in 2010, the hall bath was still under construction,” McFall recalls, laughing.
The hyper-extended DIY project in the hall bathroom wasn’t the only problem with the home: It also needed a new roof.
“The roof inspection failed during escrow, and the buyers refused to go ahead without the seller fixing the roof,” he adds.
In addition to the problem with the roof, the huge master bedroom had an in-suite bathroom about the size of a small closet. Conversely, the DIY-project bathroom in the downstairs hall of the home was huge.
To make matters worse, the owners were going through a contentious divorce.
“There was a lot of frustration in the air,” McFall explains.
What approach did you take to overcome the challenge?
McFall: I presented the owners with a variety of different floor plans that would link the large bath in the hallway to the master suite, but they declined each one. They were too expensive.
When I explained that the bathroom issue could decrease the property value by about $50,000, the home owners agreed to a simple plan: Create a doorway in the hall bathroom that linked the room with the master bedroom with the smaller attached bath, and advertise the unique feature as his-and-her bathrooms. It was the least expensive solution.
The roof had become a real point of contention between the buyer and the seller. In basic terms, the seller needed to reroof the house but didn’t have the funds to fix any part of the roof, even the side facing the street.
When the roof inspection failed during escrow and the buyers refused to go ahead with the transaction, we had to come up with some kind of solution that worked for everyone.
So I worked with the roof inspector. We came up with the idea that if the sellers gave the buyers a credit, the deal could go ahead. Problem solved, right? Wrong. When we got into escrow, the loan officer said a credit for roof repairs would not work. So we ended up giving the credit to the buyer for nonrecurring closing costs.
How long did the sale take? What was the selling price?
McFall: It listed for $1.6 million in August and sold in 11 days for $1.575 million. The fact that we sold the home so quickly shows that we did a lot of things right.
How did you get the listing?
McFall: The sellers were repeat clients of mine. I sold them their first house 32 years ago. And I sold them this house, the one they were selling, about 17 years ago. When they got ready to sell this house, the wife called me and said, “Cres, we need your help again.”
How much did you spend marketing the property?
McFall: I spent about $300. I put the listing on the MLS, did a simple flyer on my own computer, and had some added costs for miscellaneous repairs.
The bathroom wasn’t the only project left undone. There was a huge amount of insulation laying around on the property. I worked for four solid months and can’t tell you how many trips I made to the dump in my SUV getting rid of the insulation and trash around the house.
We also moved all the furniture into the garage and staged the house from top to bottom. By the time we showed the home, it was gorgeous.
How many times did you show the property?
McFall: We had one open house over two days and showed the property about 45 times.
Can you tell me about the buyer?
McFall: One of the couples from the open house bought it. The buyers, a couple with children, were anxious to get into the Los Altos schools in time for the fall restart. They barely got in ahead of the deadline.
What do you attribute to closing the deal?
McFall: Persistence. I was totally occupied with selling this house for four months. There were so many sidebars to the story, but I dealt with each issue as it came up.
How did you get started in real estate?
McFall: I got my real estate license in 1966 but worked in the mortgage industry for the first few years. In 1970, I decided to move into real estate sales after the sales practitioner who sold me my first house offered me a job selling real estate. I started my own company in 1980.
Do you have a specialty or niche?
McFall: Getting problem properties sold. I also love to train agents. I took some great seminars in the beginning of my career about working with buyers and was able to pass that knowledge on to many young agents. Training also became a great recruiting tool for me when I started my own firm.
What lessons did you learn from this transaction?
McFall: One of the things I learned was the importance of maintaining relationships. I sold this couple their first home 32 years ago and have completed four transactions with them since that first sale.