Selling by the “list it and hope” method
Friday was a lousy day for me. It ended with the flooded house I'll tell you about someday. It started with yet another house that is on the market, but not really.
This one is not a foreclosure or a short sale. It is merely a house where the absentee landlord is sick of being a landlord. It’s fully occupied. The agent gave me the lockbox code and confirmed the showing. She told me to knock on the doors. She didn’t call the tenants.
My client and I met some lovely tenants. They were polite and the apartments were clean. They spoke only Spanish. They didn’t laugh at my accent, but then again, I am not sure they understood what I was saying, either.
This multi-family house is for sale as condos. Zero units have sold. All units are occupied. The price keeps marching down.
For an owner-occupant buyer, it is not a terrible deal. But it would involve evicting a good tenant. I am grateful that my client was not interested in doing this, and we moved on to the next property.
As an investment, this is a bad one. Since there are multiple units and none sold, the early buyers would need 20 percent down. Even with that down payment, the principal, interest, tax, and insurance (PITI) is at about the monthly rent. So, why buy one unit for zero profit? It also had an average amount of old-house code violations and old-house updating projects.
So why is this on the market as condos? Because it is still “worth” more as condos than as a multi-family house.
Why is it on the market at all? The agent probably told the seller, “why not?”
It is the “why not?” marketing I've heard called the “list it and hope” method. Sometimes I think my fellow agents think that if it is on the MLS, one day someone will throw money at it.
The sad part is that sometimes people do.
