Bad Day! What Would You Have Done?

Real Estate Broker/Owner with Sellstate Advantage Realty

Today was the first day back in the office in beautiful Cape Coral, Florida after a week in New Jersey!  You know what the first day is like a day after a week messages piled high and a million things that need your attention immediately!  Today however, I had a pressing problem that needed my attention as soon as I had returned!

Back in April, I have listed a property three bedroom, two bath 1627square ft. for $169,000! This home was built in 2006 and had many upgrades and was on a beautifully manicured lot!  The CMA at the time showed that this property was well worth the asking price of $169,000! In early July, we had a couple from New York, who viewed the property and fell in love with it! They they also thought the house was well worth the asking price and submitted a full price offer closing in the middle of August! They had come to this decision after a week of looking at properties, that did not compare to this one! The home inspection and pest inspection were done, and they came back without a problem.  Then last week we got a telephone call from the lender in New York, who stated that the house did not appraise! I asked for a copy of the appraisal to be sent to my office,  so it would be there when I returned today!

Upon arriving at the office this morning I found the appraisal for the above-mentioned property with the value of $138,000! That's right $31,000 less than what I have sold for! My initial response was, "How can that be?", "Impossible", "No way!" I couldn't imagine if I could have dropped that much over the last two to three months!  But much to my surprise they had! I called a friend of mine who is a local appraiser and asked her for her opinion, and she said that if she stretched it she could possibly get up to $142,000! Well that's still a long way from hundred and $169,000!!

So with nowhere else to turn, I called the seller and scheduled an appointment to discuss this dilemma! I had already spoken to the seller last week, and told her that we had an appraisal issue.  When I arrived at her house today, she informed me that she had already purchased a lot in Ohio and had started construction on her new home! She then asked if I had bad news for her and she immediately began to cry! I tried to break the news to her and be as sensitive as possible, however, I found no easy way to tell her the cold hard facts! Her home was not going to sell for $169,000, as she originally thought, if it was going to sell, it was going to sell for $138,000!

In my opinion, she had two choices.  First of all, she could sell her house for $138,000 and move to Ohio and live in a new home and be close to her family which was her original motivation!  Or she can refuse to sell the home, cancel her contract in Ohio, and wait until the values come back! After a short discussion, she agreed to sell a house for $138,000 but she was not going to include the refrigerator and the washer and dryer! As I am writing this I am still waiting on the signatures from the buyers on the new contract!

Those of you who know me, know how much I love my profession, but today was not one of those days!  I would like to hear from anyone  who may have had a similar experience and also if you haven't, how you  would have handled it! Tomorrow will be a better day!

I always thought it would be nice to call my seller and ask, "Would you be happy with me if I sold your home for more than what it was worth?" You would figure that they would be thrilled! Today I realized, I never want to make that phone call again!

Mike Kelly, Sellstate Advantage Realty, Cape Coral, Florida, 239-549-9200


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Gene Allen
Fathom Realty - Cary, NC
Realty Consultant for Cary Real Estate

Amazing but I would have thought that you would have been able to see that with an updated CMA.

Jul 29, 2008 01:28 PM #1
Mike Kelly
Sellstate Advantage Realty - Cape Coral, FL

Gene, You are correct and now I will be doing CMA's weekly on every one of my listings!

Jul 29, 2008 01:57 PM #2
Jay LaGace
RE/MAX Realty Team - Cape Coral, FL
Cape Coral / Lee County Real Estate - 239-443-8795

Mike, Had the exact thing happen to me about a week ago with almost the smae exact numbers. Its a bit crazy out there as we are dealing with all the Bank Owned homes that have closed in the past few months.

Jul 29, 2008 02:39 PM #3
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