With basketball’s March Madness drawing to a close, the residential real estate world opens its version with April Madness, often referred to as the spring selling season.
Traditionally, there are two seasons in Nashville, spring and fall, with spring sales volume about 25 percent more than fall.
Lately, it has been more difficult to delineate the seasons as things are selling right and left and new construction closes upon completion with hammer and nails being oblivious to seasonal trends.
As pollen fills the Midstate air, signs featuring the “Coming Soon” gimmickry give way to the “For Sale,” which often appear with “SOLD” sleeves. The “Coming Soon” craze began in Nashville six or seven years ago and has added chaos to a market already rife with weirdness and subjectivity.
Unfortunately, some agents use the sign as bait, hoping to ensnare buyers for other properties or, in some cases, to sell the home to an unrepresented buyer, thereby not having to share the commission.
In many cases, buyers will notice the “coming soon” sign and call their respective – and respectful – agents to inquire about the property. When the listings agents field those calls, they usually explain that the houses are not ready to be shown at that point, but the homes will be listed at specific dates in the future and the first showings are upon that day and that day alone, set in stone.
Anyone who falls for this is an April fool.
If the buyer’s agent takes the listing agent at his word, the buyer’s agent is often surprised to see the property enter the Multiple Listing Service as “sold.”
But wait a minute. How could it sell if the first showing was to be that day? “Well, you see, uh, this person came by and knocked on the door, and the seller let them in, and I didn’t know anything about it.”
To be fair, in this market, which sees buyers miss houses with regularity, chaos breeds chaos, and buyers will make offers, sight unseen, with contingencies that they do, in fact, have an opportunity to see the houses in question.
The structure of the offer that may appear out of the blue seems perfect. It will be cash with no financing contingency or appraisal contingency, and the buyer will request no repairs. All of that and the price is more than the list price.
The buyer should be elated, except for the “April fool” aspect.
When the buyer has the home inspected, the radon reading is high, the gas HVAC has a cracked heat exchanger and there is sewage leaking into the crawlspace.
Contractually, the seller is under no obligation to fix anything, but the buyer will walk if these items are not repaired. To make matters worse, a licensed HVAC contractor can deem the unit unsafe when he discovers a cracked heat exchanger and refuse to re-assemble the system.
With radon being the No. 2 cause of lung cancer, the seller does not want to breathe the tainted air. With all of this newfound knowledge of deficiencies, the seller must repair or disclose to the next buyer, and two weeks has gone by since it hit the market. So, the “as-is” offer came with a $15,000 price tag.
The next call is from the appraiser. Huh? What appraiser? The contract is not contingent upon an appraiser.
“I know,” the agent says. “But they decided to get a loan, even though the contract is not contingent upon a loan.”
Then the appraisal comes in 10 percent less than sale price and the appraiser warns there is no way in the world for anyone to ever get the house to appraise for the price the buyer paid.
The buyer offers to pay the appraised value, and the listing agent recommends the seller take it, explaining most buyers need appraisers, and this appraiser knows the area and is usually spot-on.
Cash, as-is, more than list price? April’s fool.
Sale of the Week
The Terrazzo condominiums at 700 12th Avenue South, across the street from the Gulch, are on a roll, as evidenced by the sale of Unit 509 last week for $496,000.
With 1,465 square feet, it is still a bargain compared to prices at the Icon and 1212 in the Gulch.
This particular property has worked well for everyone. The property originally sold in 2011 for $347,000, then in 2013 for $431,500, and now has come close to $500,000.
Ted Pins, a pioneer in Gulch property sales and a Realtor with Village Real Estate Services, was the listing agent.
He described the two-bedroom, two-and-a-half-bath home as “spacious with solar shades, three walk-in closets with built-ins, wide-planked hardwood floors, Kohler fixtures, Romano stone and Kitchen Aid GAS appliances and a view towards the Adventure Science Center.” He then he added in all caps for effect, RENTAL PERMIT.
Being the veteran of these sales that he is, the savvy Pins knows that few of the high-rise condominium developments have gas stoves and that many buyers are quite fond of cooking with gas and loathe electric cooktops.
Additionally, some of the high-rises have restrictions as to how many units may be rented at any one time and allotment permits, which are valuable commodities in these buildings.
Debra Beagle, managing broker with The Ashton Real Estate Group of RE/MAX Advantage, procured the sale when she introduced her buyer to the property and led the buyer through the buying hoops.
Richard Courtney is a real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at [email protected].