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Seller’s Over-Confidence Killed The Deal And His Own Pocket

By Cindy Lin

Education & Training with Staged4more School of Home Staging

January 06, 2008 10:18 AM

I caught TLC’s Property Ladder this morning about a 25-year-old seller & first time house flipper T.J. who “hopes to make a ton of cash in just 12 weeks by doing a modern makeover on a classic house. Things go terribly wrong when his loan applications are rejected and he is forced to beg, borrow and plead to make his first $4,800 mortgage payment.” (From TLC website)

Originally, he bought the home at $584,000 and spent $40,000 on renovations. Let’s pretend that he did find a buyer who is willing to pay for an overpriced property, he could obtain a profit at $125,000 if he sold at his asking price. After the price reduction and 2 mortgage payments, his profit became $56,400.

A total 21 weeks on the market (that’s 147 days!!!), he finally received an offer at (Read more …)

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Rosario Lewis

DDR Realty - Newburgh, NY

GRI, SRES - DDR Realty - Orange County, NY

I wonder where over-confidence like that comes from. It sounds like he had good advice, but he ignored it.

Jan 07, 2008 05:18 AM

Marzena Melby

Coldwell Banker Burnet Realty - Richfield, MN

Realtor, Twin Cities Minnesota Real Estate

Cindy,

In more than 12 years of my real estate practice I have seen many sellers do this. Whether they are selling themselves or with an agent, they self destruct for many reasons:

"I set my budget at a minimum of $250,000, I know my house is worth that much, so... $235,000 won't work at all"
"I know you told me that we should list at $375,000 but that doesn't give me any room for negotiation, so I want to start at $425,000"!

I could fill a book with examples of conversations with clients (buyers also can be unreasonable in their demands, especially when they feel or know that the seller is desperate to sell). So, I do not feel sorry for people who are given solid professional advice and they know the consequences of their actions but they themselves do not act in their own best interest. I personally know a real estate agent who invested in 7 single family properties, rehabbed one after the other, put them back on the market, and... since they were all grossly overpriced, only two of them sold in a year and a half. Another one is rented, and the rest are in foreclosure. How does that happen to a REALTOR? I guess greed does damage no matter what the market does, but... that's just my personal opinion.

So, in conclusion, we all need to be realistic about our options and the consequences.

Jan 07, 2008 08:10 AM

Cindy Lin

Staged4more School of Home Staging - South San Francisco, CA

Host, The Home Staging Show podcast

Rosario I think ignorance and didn't do their homework.

Marzena I think your comment is so brilliant that it merits its own post: http://tinyurl.com/2fhngq

Jan 08, 2008 10:28 AM

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