The house selling process of our renovation project on Camden St in Ferndale, Michigan continued as the project began. Nothing went according to plan and new challenges presented themselves every step of the way. As hard as it was at times, the lessons we learned are priceless and it will be an unforgettable project for us.
In this post, we explain to you the experiences we had during the house selling process. We’ll highlight the mistakes we made and share with you a real case of how long and agonizing a selling process can be. We hope this will help you prepare as best as possible in order to make the sale of your home a bit easier.
“I never lose. I either win or learn.” – Nelson Mandela
House Selling Process Lesson #1: Listing Preparation Issues
We are used to looking at houses in need of extensive updates and repairs. Every house we purchase is based on its potential. We envision pass the repairs needed. So naturally we don’t see houses through the same lens as a home buyer. We overlooked final details that we considered small, but played large in the eyes of a home buyer. Minor items may be considered major if the home buyer doesn’t have the resources or know-how to remedy them.
- Issue 1: Garage Not Cleaned Out
The garage was full of debris when we purchased Camden. When we listed it for sale there was still old paint cans on the shelves, ladders and shelves in the rafters, and old lumber along the wall. Although it was an organized mess, potential new owners don’t want to take on the hassle of cleaning old items out.
- Issue 2: Staging Downfalls
Staging is a must. It highlights the full potential and helps home buyers envision their home. Going against our stager’s better judgment, we did not hang curtain rods in the living areas. Although the house was staged beautifully, the bare windows left the house without a “home feel”. It also exposed the garage through the window, which took away from the beautifully renovated kitchen. We ended up re-staging the house later with current rods, and the drapes made a HUGE difference. They softened up the room and made it feel like a welcoming home. Listen to professional advice!
- Issue 3: Debris Left Under Back Porch
We dug up the yard to replace an old sewer line. By doing so, we unearthed old concrete blocks. These blocks ended up under the porch and were never removed. Another one of those things that the new owners shouldn’t have to deal with.
We had spent so much time and effort with this renovation. We had missed our deadline and were eager to get the house up for sale. The last thing we wanted to do at this point was clear out debris. We figured it was such a great renovation that it didn’t matter. This was not the case. Leaving the last items of debris leaves a bad impression. Especially after a house was completely renovated. If the rehabbers can’t clear out minor debris, then where else did they cut corners? It doesn’t matter how nice your house is, if you do not do a thorough preparation for listing it will not show well.
House Selling Process Lesson #2: Listing Too High
When we first listed the house for sale, we shot for the highest price possible. Comparable homes that recently sold in our price range didn’t compare. Our finishes were above and beyond. A few things hindered us from selling high.
Located just a few blocks off of 8 mile, Camden had to battle old perceptions. Living near 8 mile was thought to be too dangerous. A lot of showings never amounted to much interest. The feedback we received was location, location, location. We had an interested buyer considering to give us a full asking price offer, but her mom wouldn’t let her because of its proximity to 8 mile. If the house was further north, interest would have been much higher.
- Time of Year
By the time we listed the house for sale, it was the tail end of the selling season. The school year had started and families were settled in. Houses in Ferndale were flying off the shelves over the summer time. If we could have listed a couple months earlier we may have achieved our asking price. Instead we missed the wave.
- Lowering the Asking Price
After a month on-market without much interest we decided to lower the price. This reflects poorly on the seller. It’s basically an admission of guilt, knowing that we listed too high. We were hoping that by lowering the price it could turn into a quick sale before the holidays.
- Too Long On-Market
After a house has been up for sale for a long period of time, it tends to go “stale”. Buyers will often come across your house multiple times online during their home search. They’ve seen it so many times for so long it doesn’t capture their interest anymore. Buyers will start thinking it must be priced too high so it’s not worth seeing, or something must be wrong with it.
Price to sell. Even if you think you can get the highest possible price it may not be worth the time. Listing high can often be counter productive. You are limiting your market of available buyers. In most cases, your house will sit for a long time on-market which costs you money in the form of mortgage payments, taxes, insurance, and utilities. By the time you accept an offer, you would have been better off just asking a lower price from the start.
House Selling Process Lesson #3: New Year Brings a Fresh, New Approach
As we approached the holiday season, showing request were becoming less frequent and our hopes of a sale before December was becoming less likely. Instead of letting the house sit on-market we decided to take it off until the New Year. While it was off-market we needed to rethink our strategy.
- Clean Out Shed and Remove Debris
We cleaned out old items from the previous homeowner and removed debris from construction in the backyard. It made the space more presentable. No one wants to inherit another person’s mess.
Hanging curtain rods made a difference. Opening the front door and walking in gave you a nice warm feeling and made it feel like home. We also focused on other personal touches to make it feel more like a home to viewers.
- Basement Fixes
- Moisture Barrier
When we purchased the house the basement needed a lot of work. We had to dig up along the foundation in order to install a new drainage system and sump pump. We also installed a moisture barrier that went up the base off the wall about 6” high. Although it served a purpose, it wasn’t delightful on the eye. It was also a bit intimidating for buyers and raised questions and concerns. We ended up cutting the moisture barrier down flush with the floor and installed a vinyl base. This made the basement much more presentable and still provided the protection from moisture.
We painted the basement prior to listing. However, over that time moisture started to show itself through the porous foundation and floor. A fresh coat of paint was needed before it was re-listed.
- Seal Cracks
Moisture showing itself through cracks in the floor needed to be sealed. We used a paintable cement sealer caulk to fill everything in and protect from moisture creeping through again.
- Moisture Barrier
- New Pictures
Now that the house was re-staged and the basement freshened up, it was time to get new pictures. New photos are needed when you re-list a house for sale. Buyers who have come across your house in previous searches won’t just pass it by because they won’t be looking at the same pics. It’s a simple way to create (or recreate) new interest.
- Lowered the Asking Price
We decided to adjust the price to reflect no garage. It was our way of managing expectations. By not listing with a garage, it turned a disappointment into a pleasant surprise.
- Clean Out Shed and Remove Debris
Re-listing takes more time and money. Not to mention the agony of having to go through the listing preparation process all over again. Avoid this by listing at a price to sell and complete listing preparation. It may be worthwhile to have a friend or family member give you an honest opinion of how well (or poorly) your house presents. They may uncover items you missed.
House Selling Process Lesson #4: Excluding Appliances
We decided not to include appliances in the house, other than a dishwasher. We felt that buyers would want to pick out there own appliances because they know what will suit their needs. Also, if we were to pick out appliances we would just pick whatever is cheapest.
Instead, we offered concessions (cash to seller) towards appliances. However, buyers have a hard time visualizing empty space. Potential buyers were asking us if the kitchen could even fit a standard size oven. We designed it to fit standard size but it’s hard to tell without an actual oven there.
In the end we decided to purchase an oven. In the future we will be supplying appliances for all of our houses. It helps eliminate confusion and most people do not want to deal with the hassle of purchasing new appliances. This is especially true for most first time homebuyers. Today’s first time homebuyers want their house fully equipped and move in ready.
House Selling Process Lesson #5: Meeting Buyer Expectations
Home buyer expectations are very high. First time home buyers don’t have the time or the means to renovate, so they would rather find a house in perfect condition with modern updates. This can be challenging when you have an old home. Layouts may not fit today’s lifestyles, floors may creek, and basements may be gloomy.
- Buyer’s Inspection
All went well with the inspection. The inspector didn’t find any items that needed to be flagged. However, the buyer’s family came over to do their own inspection a day later. The “father inspection” (as we like to refer to it as) turned into a tough challenge. Protecting their son and daughter, they wanted to be sure they were purchasing a good home. So they questioned everything. Rightfully so, but we felt like we were being pushed around. This is a tremendous house and we were being treated unfairly. We were quite taken aback by their reaction.
- Buyer’s Demands
After the “father inspection” we were sent a list of repairs they wanted us to do. Most of which were satisfied by an explanation. Others we thought were a bit ridiculous but it was in our best interest to take care of it in order to sell the house.
Being in the business of renovating old houses, we face tougher criticism than most homeowners will. Buyers know that we bought the house, renovated it, and put it back up for sale for a profit. So buyers want to make absolutely sure that they are buying a well constructed home. Buyers also know that we don’t live in the houses we sell so they feel it’s more acceptable to criticize. That being said, expect buyers to nitpick little details about your home that you would never even think of. If your home is being criticized, don’t let it upset you. Usually an explanation is enough to ease the mind of the buyer. If they do give you a list of demands after the inspection, do what you can. Even if you feel it’s unfair, keep your mind on your ultimate goal – selling your house. If it takes a little more work to please a buyer it will be worth it when you get to close.
For more information about inspections check out our blog post: Inspections are Difficult and Sometimes Unfair
Selling Process Lesson #6: Overstating Features
When we first listed the house for sale, we included a garage. A house with a garage is more attractive to buyers than no garage at all. The property had a large enough structure, so based on size we came to the conclusion of calling it a garage.
- The “Is It a Garage?” Debate
The issue with the garage was the lack of driveway and garage door. The structure itself is the size of a 2 car garage, but without door access large enough to fit a car it was essentially a large shed. It is also set back on the property and doesn’t have a driveway to reach it with a car. We spoke to appraisers and realtors with differing opinions. Let’s face it, no car access = no garage.
- Buyer Expectations
By including a garage in our listing, buyers expect to see a spot they can park their car. When they view the property and find a large windowless structure with no garage door, they become disappointed and lose interest.
Always manage expectations. We thought the house would be more attractive if we listed it with a garage. It ended up having the opposite effect because we were disappointing potential buyers. Overstating features is an easy trap to fall into. You want to make your home sound as appealing as possible. Although we considered the structure to be a garage, it would have been better to accept that it wasn’t and listed it appropriately. Overstatements are counter productive. Your home may sound more appealing but when the buyer sees it for what it actually is, they lose interest. You end up wasting the buyers time, and your own time.
House Selling Process Lesson #7: Hindsight is Always 20/20
Before we took the house off-market, we received an offer of 225k, which was 30k less than our asking price. We were a bit insulted. The buyer had expressed strong interest and led us to believe that he was going to give us a good offer. At that point, we were not ready to accept anything lower than our asking price.
Four months after we received the lowball offer, we accepted an offer for that same amount… 225k. If we would’ve accepted the 225k in the first place we would have avoided the extra cost of the 2nd listing preparation, the 2nd re-stage fee, and another 4 months of carrying costs on the property.
It is difficult to see what the future is going to bring, and you don’t want to fold too early. But sometimes you have to be realistic, and in this case accepting the first offer would have been a much better decision. We needed to check our ego’s “at the door”.
Selling Process Lesson #8: Funky Features
- The Double Lot
The house sat on a double lot but the lot wasn’t utilized very well. Instead of having a driveway that led to the garage, it was a large open space on the side of the house with the large shed directly behind the back porch.
- Driveway Location
The driveway wasn’t in the most ideal position, being directly in front of the house. It’s a wide enough driveway to fit 2 cars, but it’s in a spot where the front lawn should be located. So instead of having a front lawn, the house had a side lawn. It’s also not a deep driveway. This makes it difficult for large vehicles to fit without encroaching onto the sidewalk.
Some things you just can’t fix. Especially when it comes to old houses. Features that may have worked in the past don’t fit today’s use. The driveway was probably plenty sufficient when the house was built in the 1920s. Apparently the builder didn’t expect everyone to be driving big trucks and SUVs 90 years later.
House Selling Process Lesson #9: Sewer Line Inspection
The New Standard
More and more buyers are including sewer line inspections. Especially in older neighborhoods like throughout Ferndale, Michigan. Old infrastructure needs to be replaced and buyers want to catch any problems before they end up having to foot the bill.
An Unpleasant Surprise
We replaced a large portion of the sewer line when we first purchased the house. So when we received the news that there was another rupture, we just couldn’t believe it. After all the time spent on the renovation and the time spent on-market the news was a real kick in the gut. We finally had an accepted offer and now it could be in jeopardy because of a major defect that was found. We were also in no position for a major expense before the house was sold. So this posed many issues.
If you ever face a situation like this, remember that there is always a solution. We weren’t capable of fixing the pipe before we closed. The cost was just too heavy. Now we were faced with a heavy burden if we couldn’t get these buyers to close on the sale of the house. We would have had to put the house back on-market and disclose that the pipe has ruptured. Who is going to want to buy a house with a broken sewer line? After a few gut wrenching days trying to solve this problem we found a solution. Thankfully the buyers loved the house so much they were willing to work with us.
House Selling Process Lesson #10: Appraisal Process
You never know what to expect when it comes time for the appraisal. It’s not an exact science, and you’re at the mercy of the appraiser’s opinion. This uncertainty at this stage of the selling process only adds to the angst. If the property doesn’t appraise for the full asking price, then we’re back to square one.
No Closet, No Bedroom
Another one of those grey areas. The appraiser considered Camden to be a 2 bedroom house because the 3rd room didn’t have a built in closet. It was clearly used as a bedroom. Even the County stated it as a 3 bedroom house on the public record. We were now faced with an appraisal based on a 2 bedroom house instead of a 3 bed. This could have a dramatic effect on the value.
In the end it worked out. The house appraised for full price. This led us to believe that if the house was appraised as a 3 bedroom then we could have achieved a higher price. At this point that didn’t matter. It was good to hear that we were another step closer to close. It’s always a good idea to be present with the appraiser. Ask her questions about her process and techniques, if she is familiar with the area, share features about the house that she might miss, and give her a list of comparable home sales to justify your sale price.
House Selling Process Lesson #11: Underwriting Has the Final Say
After the appraisal came in we were excited. After so much time has passed, closing from Camden was finally on the horizon. We had our close date scheduled and all parties were prepared. We just needed final approval from the underwriters. Underwriters review everything and have the final say on the buyer’s loan application. Just a few days before we were to close, we hit another snag.
- Old Porch Foundation
A lot of old Ferndale houses will have a separate foundation underneath the porch. It’s not part of the actual structural foundation. They were built and used as a coal room back in the day. These porch foundations are known to gather moisture and dampness, especially after a rain. While the appraiser was there she took a photo of that room and there was a small damp spot that caught the underwriter’s eye. Now the issue was structural integrity of the house. The underwriter will not approve a loan on a house if there is a structural issue. Now the appraisal was considered “full value, subject to an inspection”, and sent back to the appraiser for further assessment.
- Second Inspection
In order to satisfy the concerns of the underwriters, we ordered a second inspection with a different inspector. We knew the house was safe but we needed a professional opinion (even though the buyer already had a professional inspection and there was no issues stated with the foundation). The inspector we hired noted that there were no issues with the structural integrity of the house, it was simply a grading issue along the porch. Since the inspector stated it as “grading issue”, a repair needed to be made. Now the appraisal was considered “full value, subject to repairs”.
In order to get the final approval, we had to re-grade along the porch foundation. Once this was complete the appraiser had to come out and do a final inspection and take photos. It was a simple fix but delayed closing for 2 weeks. Once the underwriter received the picture of the grading, they approved and finally gave us the Clear to Close.
This is an example of the uncertainty you face until the very end. The sale is never certain until you sign over the deed at close. In most cases when working with first time home buyers, they are only able to put a small amount down on their loan. That makes the appraisal and underwriting process much harder for the seller. The lender needs to make sure the house is worth as much as they are lending.
Selling your home on-market is a difficult process. It can be an emotional roller coaster ride. The only thing you can do is prepare as best as you can. Prepare your home physically, and prepare yourself mentally. Get advice from professionals every step of the way. Keep a level head and remember that there is a solution for every challenge you face.