I have a friend. Let’s call him Jack. We are still friends because I declined his invitation to
sell list his home…in my farm, on a very busy thoroughfare that would have afforded me great sign exposure.
Jack’s hobby, until he got to the point where the clock started ticking on his capital gains, was playing with his house. And rendering it almost unsalable by making improvements like removing the support column for the ceiling from which the kitchen cabinets were suspended and installing a do-it-yourself French drain that improved the drainage to the point where the other side of the house became lopsided.
Then his hobby became talking to me about whether he should sell the house (“I don’t need the money”) or keep it as a long-term rental (“the tenants trashed the place”).
“Jack,” I said—over and over and over—“you will never recoup what it would cost to get the price you want. It’s a contractor special. I wouldn’t even advise doing the cosmetic remodeling and giving a credit for the structural work because it could very likely come back to bite you, no matter how honest you are and how many reports the buyer gets. You don’t have to be guilty to be sued (and settle).
Do you like to sleep at night?”
Every week when I sent out my market updates I would get an e-mail from Jack, asking the same questions. Over and over and over. Jack is very smart, so I knew these were just invitations for me to call and discuss all his options, upside down and sideways, because he needed something to do. Occasionally we met at the property to discuss it over and over and over.
Then Jack made a decision. He would “fix” the house and we’d sell it. Of course, he was going to do all the work himself. “Why pay a
professional contractor when I can save all that money by doing it myself?” he posed to me, repeatedly, in response to my annoying interjections about how buyers like to see licenses, permits, and seasoning on major repairs like foundations.
“Jack, remember what I said about risk and liability? You really don’t want to do that. And it could all blow up on you if you exceed your capital gains deadline. If you truly want the house out of your life, you will accomplish that goal more reliably if we offer it as is. And, by the way, have you talked to your CPA and attorney about the estate issues?”
We reached a compromise (he thought). We’d put it on the market priced as if it were fixed and see what we could get for it because, his lawyer told him, “You never know what you’ll get until you try.” And he’d give me a two-week listing. And if it didn’t sell at his price he’d just take it off the market and rent it forever. After I had spent even more time and money on this exercise in futility.
cut my losses made a hedged bet and declined his listing. We are still friends, and I will be here for him when his enthusiastic new agent produces…whatever he produces. But I think I’ll have him pay for lunch.