Guiding the Transaction
With a second-choice property waiting in the wings, the buyers wanted a little more from the sellers. But the sellers were done making concessions. RE/MAX of Naperville, Ill., practitioner Bernie Cobb Jr. managed to get everyone on the same page.
December 1, 2010
Location: Naperville, Ill.
Square footage: 3,000
Lot size: 8,400 square feet
Year built: 1992
Extras: Two staircases. Nice finished basement.
RE/MAX of Naperville sales practitioner Bernie Cobb Jr., e-pro, says the market conditions and the state of the property made for a tough sell when the owners asked the real estate sales veteran to market their four-bedroom Naperville home in June 2010.
“The home hadn’t been updated in 18 years. It had the same carpeting and light fixtures and appliances as when it was built in 1992. But it now had an added feature — overgrown landscaping,” Cobb says. “It was horrible.”
What approach did you take to overcome the challenge?
COBB: The sellers were willing to do about $22,000 in updates before we listed the property or started showing the home. I found a buyer before we really got going with the updates. And the seller agreed to let the buyer pick the upgrades — paint colors, carpeting, appliances, countertops, and light fixtures. So it was a good match.
However, when it came down to the nitty-gritty, there were some sticking points. The buyer asked for some additionally basic updates, and there were some inspection issues. The sellers, on the other hand, who had reduced the original price by $30,000 and done all the updates, felt they had already gone above and beyond. But the buyer had a second-choice property that was less money. So things started to get tricky.
This dynamic — where the buyers feel like they paid more than they wanted to and the sellers feel like they sold for less than they wanted to — is normal and probably happens in about 90 percent of all real estate transactions I have been involved with.
But this was a better house for the money. So I asked the seller, “How are you going to feel when this buyer walks away, and two weeks later, after you’ve calmed down, you’re trying to get them back and find that they went with that second option? How are you going to feel when you have to put your house back on the market?”
This is where experience comes into play. I told them some stories about other sellers. I was completely honest, because I never want people to come back to me later and ask, “Why didn’t you tell me, Bernie?”
Unfortunately, I have quite a few stories about people who felt they knew more than I did and regretted their decision. Months later, sure enough, I get the call, “Bernie, I wish I had listened to you.” But by then, it’s too late. And in some cases, we might be looking at a softer market and a $10,000 drop in price. So people don’t always listen. It’s their prerogative. It’s their money. But these sellers listened.
How long did the sale take? What was the selling price?
COBB: The original paperwork was done in June, but we didn’t want to list the property until all the updates were complete. So the sale actually took about three weeks, and the listing closed Nov. 3, 2010, for $465,000. The buyer wanted $495,000.
How did you get the listing?
COBB: I listed the same home and sold it to the current seller in November 2000. In June 2010, the owners called and asked if I would list the property for them.
How much did you spend marketing the property?
COBB: I really didn’t spend anything. I used networking and word-of-mouth to market the listing.
How many times did you show the property?
COBB: I showed the home once.
Can you tell me about the buyer?
COBB: They live in the same town and sold their home to buy a bigger home.
What do you attribute to closing the deal?
COBB: Experience and attention to detail. I have been selling real estate for 20 years. When it gets down to the nitty-gritty and finalizing the details, stress can start to build up, and everything can go sideways. So negotiating the transaction is about being aware of the details and navigating that tricky territory to make sure everyone comes out the other side feeling pretty good about the experience.
What was your closed sales volume last year?
COBB: I closed approximately $15 million last year.
How did you get started in real estate?
COBB: I majored in communications and public relations in college and got my bachelor’s degree. When I finished college in 1990, I went right into real estate at 22. Growing up, both my parents were in real estate sales. They started selling real estate in 1973. We like to say that in our family, we speak English and real estate. It’s like the second language.
Do you have a specialty or niche?
COBB: I really don’t. I’ve always just worked hard and smart and never tried to focus on one niche. I’ve sold $50,000 condos, million-dollar homes, and everything in between. Over the years, I’ve learned that no matter what you do or how hard you try, rejection is part of the deal. Accept it. It’s part of the business. But if you believe in yourself, you can make it happen. It’s just like the old saying: “If you believe you can, you can; if you believe you can’t, you’re right.”
What lessons did you learn from this transaction?
COBB: This transaction taught me patience. There was a lot of detail in the transaction — a lot of push and pull. So a big part of making this transaction work was knowing when to press ahead and when to let things be for a while. You really can’t push people. You can guide them along. But you have to be patient, especially in the current market.