The Pricer per Square Foot Argument

As I go another listing appointment I know the first question that will be asked: HOW MUCH IS MY HOME WORTH? Of course that is the most important factor our sellers look at when deciding to sell their home and of course which realtor to choose. I lost a listing last month because the seller held me to a price that was said as part of a lengthy discussion on marketing the property. Side-note: This home in question is in my neighborhood where my real estate partner and I have lived for over 12 years. We have had the most resale transactions in the neighborhood for the last 4 years! Back to the story: I gave him a quick number with the comment "If you want to sell it quickly". To this day he took that number, held me to it, and hired another agent two weeks later. However the seller does not seem to remember that our discussion continued. The seller had taken price per square foot of recent sales and arrived at a much higher price. We discussed this and I said he had a very valid argument. At the end of the discussion the seller said he wanted to list it for his amount and I said we could do that and see how the market reacts. Quick history of the home: •Built in 2005 •Approximately 3675 square feet plus unfinished basement •Went into foreclosure in the summer of 2013 •Overall good shape for a foreclosure •Listed, in foreclosure, for $327K, lowered to an auction price of $289K after 6 months of being on the market! •Present seller buys home in foreclosure auction for $284K •Present seller puts approximately $10K to 20K in work on home. •Present seller wants to list it at $399K! •I bring him an offer, before it is listed, at $389K, with $11K in closing cost. Seller turns offer down. Says he wants $10K more Here is my point: We cannot base the price of a home exclusively using a price per square foot model. In this particular case the home did not sell in foreclosure at a much lower price. It had to be sold at auction. Why is it going to miraculously sell now, over $100K higher than auction price, because the seller has cleaned it up? The home is located in a part of the neighborhood that is in lower demand than in other parts. It does not have a golf course or lake view that most buyers want in our neighborhood. When pricing a home you need to know the history of the home, its location in a neighborhood, and other subjective criteria, before pricing it. The price per square foot is a great start but it is not the ultimate determining factor!

MOLD! A Four Letter Word

I bring up the subject of mold because we just dealt with this situation. Please read our prior blog entitled "We Know What We Are Doing".

What I have learned about mold is that the very word sounds off alarm bells with most people. Realtors have placed mold with synthetic stucco and for sale by owner as terms we hate to discuss.

Here is what I will say about mold:
•Take the time to check your homeowners insurance to see if you have mold coverage
•If you suspect mold in your home call at least three certified experts to discuss optionos.
•Do not try to treat the mold yourself.


Very simple advice but words that my partner Barb and I had to put into practice recently (again read our previous blog).

We know what we are doing!

I have had to emphasize this point for many years: THIS IS OUR PROFESSION.

My partner Barb and I have had the pleasure to work with many well educated, business savvy, experienced clients. Some of them have bought and sold more houses than I have!

However after 7 years of success in this real estate market we can say with confidence that we know what we are doing.

Recently we had a client who was dealing with a possible mold issue in a home that he was lease/purchasing. A water leak occurred in the bathroom (nail in a pipe). The homeowner sent out an insurance adjuster who made a report. The homeowner next sent out a plumber and contractor to fix some of the items but not everything in the adjuster's's report.

In the interim our client's son, who is 4, had been sick for over four months! Possible mold in the home and how it relates to their son's illness.

Once the "M" word was mentioned my partner Barb and I took this to a higher level.

We asked our clients to not talk to the current homeowner and let us discuss options. Our client, who had lease/purchased the home, wanted to work this situation out with the homeowner but nothing was being accomplished.

Reviewing our GAR contract with our broker, we looked at possible options.

After a professional mold certified inspector filed his report we were at our next step.

Barb and I then advised our client to discuss all options with an attorney.

The contract was to be terminated pending a final walk through by the current owner, our client, and my partner Barb present.

Needless to say the current owner did not welcome my partner Barb with open arms. They proceeded to make a lot of comments and accusations, some rather harsh, at her. She had to listen to these irrational comments because she represented her clients.


Moral of our story: A lot of us thinks we can do everything our self. Whether it is working on our car, our house, investing our savings, doing our taxes, buying our houses there are times when we need to use a professional.

Barb and I pride ourselves on our knowledge, integrity, and hard work. All we ask is that our clients let us "watch their backs".