I Made a Thousand Dollars a Day

I Made a Thousand Dollars a Day for a Whole Month
( too bad the job didn’t last)

Let’s play a game for a minute.
I am going to ask you a Real Estate question and give you three possible answers.
You tell me which one is right.

Here’s the question:

Which of the following is the most accurate indicator of what your house is worth?

1) What your neighbor’s house recently sold for?
2) What a Bank would lend someone to buy your house?
3) What a Realtor says your house is worth.

Which one did you pick?
Most people choose number one, but none are correct.
There is only one right answer and this is it:

“What your house is worth is based entirely on what someone else is willing to pay you for it”.
Period.

Okay, I told you earlier this wasn’t exactly “ Rocket Science” but there is a lot more going on here than you may realize.

Do you know what you are really doing the day you put your house on the market?
You are going into the “House Selling Business”, or to be more accurate, the “Used House Selling Business”. And that is exactly where Bill, and people like him have the edge on the average homeowner. They see it as a business.
And in a few minutes you will too.

I have read a lot of business and marketing textbooks through the years. Want to know one of the basic laws of selling? Here goes:

“Buyers will not purchase a product that does not represent a comparable value to other competing goods in the market place.”
Pretty impressive, huh?

Want to know what it means? It means no one will buy your house if they don’t think it’s worth it. They will just go buy someone else’s. I wound up having that law shoved down my throat the day I tried to sell my house.

I initially tried to sell it the way you probably want to sell yours. Just put it on the market and let it go. But it didn’t work out that way.

It took a month of no offers for me to realize I was selling something no one wanted. At that point I decided to give the “Investor Treatment” a try.
And you know what?
It worked better than I ever thought possible.

It is one thing to “say” something works and to actually “show” it works. And how could you ever be sure unless you were able to try it both ways with the same property?
Since there are no sharp real estate investors in rural areas I was able to do just that. So here is the example I promised and I am going to share every bit of it with you.

The house I wanted to sell was in a small town in North Florida. We started a Dental Practice there in 1993 and bought the house shortly afterward. Now to be honest, I had never actually lived in a small town before, but it sounded like a great idea.
Well it sounded great to me anyway, Rosemary wasn’t so sure.

Remember all those TV shows we used to watch about small town life?
You know:
Mayberry, Floyds Barber Shop, and all the other things city people think of when they think of a sleepy little town. Sounded great didn’t it?
The kind of stuff dreams are made of.

Unfortunately, dreaming about a small town and actually living in one turned out to be two different things. For one thing, there is not much to do.
Sure the County Fair shows up every October but what do you do the other 51 weeks of the year? Well, I found out fairly quickly that what you do is mow a lot of grass.

Houses in small towns tend to be surrounded by a ridiculous amount of yard. In my case, it was two and a half acres and I spent four and a half hours a week mowing it. And when I wasn’t sitting on a Lawn Mower, I was fixing things that were broken or trying to maintain other things before they got a chance to break. It didn’t take long to realize that country life wasn’t exactly what I thought it would be.

And if all that wasn’t bad enough, I also made what would later prove to be an even more tragic mistake. I discovered I had violated one of the Ten Commandments of maintaining a happy marriage. I think it is somewhere between “ Never Give Your Wife A Power Tool for Valentines Day” and “Never Tell Your Wife She Looks Her Age”.
The one in between those two and the one I broke is, “ Never Take A City Girl To The Country”.

Sure Rosemary was a good sport to begin with, but it soon wore off when she discovered the only forms of entertainment available were Bass Fishing and the weekly wrestling match at the County Coliseum. She wanted to go back to Daytona and I really couldn’t blame her.

She was born in Daytona, her family was from there, shoot; her grandfather was even one of the founders of the Daytona Speedway. What was she doing out in the middle of nowhere? So after twelve long years of watching life from the hood of a Lawn Tractor I decided to move her back to her hometown. The only problem was what do I do with this house?

I had worked on it constantly and when I decided to sell it, all I wanted was get rid of it as quickly as possible. Unfortunately, one of the harsh realities of home selling was about to knock me flat on my freshly mowed lawn.
I think they call it curb appeal, or in my case, the lack of it. To be honest, I had done a lot of maintenance but I had not done much to make it a candidate for Southern Living magazine. For one thing, there was an awful lot of stuff in that house.

After one set of Grandparents passed away and then another, we wound up with a hodge-podge of furniture and junk that filled it to the point that it would have taken a shoe horn to have gotten any more through the front door.
But who cares about that?
After all, I never claimed the house was perfect.

Maybe if I priced it right I could get somebody to take it off my hands. I’ll get it appraised, then sell it at a discount and throw in a few goodies.
That should do it.

Let’s see, I’ll leave that Player Piano; that thing cost a fortune and I didn’t want to move it anyway. And how about that Home Theater System and Big Screen TV?
That will certainly sweeten the pot, and besides, who needs a Home Theater System in a Daytona Beach condo?

And finally the thing that will absolutely have a buyer throwing money at me with one hand and pushing me out the front door with the other. I’ll throw in that Lawn Tractor I had spent the better part of my life sitting on.
That will be the clincher.
I could almost smell the ocean breezes as I was concocting my master plan.

The house appraised for $175,000.00 and I priced it at $165,000. I told the Realtor to make sure she told the eager buyers everything I was throwing into the deal. I knew it wouldn’t be long now.

Want to know what happened?
A lot of people saw the house.
They came in the morning, in the afternoon, and some even came at night. But none of them stayed very long and no one made an offer. Sure, there was the guy who offered me a hundred and a quarter, but he wanted me to stay on as the yard man because he didn’t want to mow the yard either.

After a few weeks I realized I was never going to sell the house this way. Sure I had an appraisal telling me and anyone willing to listen what the house was worth. But no one wanted to buy it. What was wrong with these people?

Turns out, there was nothing wrong with the buyers, there was something wrong with the seller.
Which happened to be me!

The Bank got the appraisal right but their value was based on the brick, wood, concrete, and all the other things the house was made of. The problem was the buyers weren’t looking for Building Supplies; they were looking for a home.
So I took it off the market and realized if I was ever going to get rid of it, I would need to change my way of thinking.

Maybe if I stopped thinking like a seller and started looking at it like a buyer, I might get rid of this house after all.


Intermission

Since you have read this far, you probably want to know how it turned out.

Here’s what happened:
It took thirty days and $3500.00 to turn the house into something a buyer could love.

After I was finished, I had it reappraised by a different appraiser and this time it came in at $185,000 (Appraisals are called an opinion of value and that’s exactly what they are. They are based on what the appraiser thinks. If the house looks better, it will probably appraise higher).

This time around I priced it $10,000 over appraisal instead of under and didn’t throw one thing into the deal. No Player Pianos, no Big Screen TV’s, and NO Lawn Tractors. Let them buy their own Lawn Mower.

The day the house went back on the market I got an offer at full price. The next morning I had another at a hundred dollars over that.
Now granted there was a risk if the buyer’s appraisal came back lower than their offer. People won’t buy houses that don’t appraise and banks won’t lend money on them. But a good Realtor can usually justify the price if it is at least within the realm of reason.

So the end result was I proved the “Investor Treatment” works.
I went from an asking price of $165,000 that I couldn’t get, to a selling price of $195,000 that I did get. And I got it the first day.

So I made thirty thousand dollars in thirty days. Like I said, not a bad job, too bad it didn’t last. If you want to know exactly what I did and why, I explain it in detail in the following sections.

Okay, Intermission is over, on to the next section.