I usually do my homework. When I set up a listing appointment, I always pull all of the deeds and tax records on the subject property. First of all, I need to know who owns the property, and who is required to sign the listing. Second, I need to know how much is owed on the property. In Georgia, we do that by examining the "deed to secure debt," or security deed. You can pretty much determine an estimated payoff by the amount secured by the property, and the date it was executed.
But today I goofed. I missed a second mortgage in the amount of $29,000. I spent all morning preparing the presentation and the listing paperwork, loader the sign, and headed to the appointment. The presentation went by flawlessly. I sold the sellers on my marketing, and they insisted that they would sell if they could only walk away without losing any money. After doing my CMA, I thought we has $20,000 to play with, so I thought I was home free, even if we had to take an offer.
Then the seller dropped the second mortgage bomb, and my heart sank. I knew there was no way to sell their house in our slow Coweta County Georgia market for enough to clear both liens, let alone pay me. I was dead in the water, trying to decide how to extricate myself from the awkward situation. I offered them my best advice, hold the home for another few years, or work with a financial adviser to help them save enough money to sell.
On the ride home, I thought about how my error cost me 6 hours of work on a Saturday, that would have been better spent doing household chores or enjoying a break from work. Instead, I wasted my time and broke the hearts of a lovely young couple who were expecting to get a larger home for their growing family. Ah well, we live and learn and I am still learning after 24 years in this business!
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Richard,
Of course, you did the right thing. I would hope that another Realtor doesn't come along and get their hopes up with false promises.
I agree with Jeff. The seller has to be made to see that the money borrowed for credit card debt and placed on the 2nd mortgage was not for the house itself. Most homeowners can't distinguish this once they merge their expenditures into an additional mortgage. I've walked away from several listings this year myself.
I always make it a point on the phone to inquire about their payoff and if there is a second mortgage on the home. Basic payoff information is printed on their most recent mortgage statement. We are seeing more and more homeowners with zero equity due to 100% financing or using their home as if it were a bank to make withdrawals.
Richard - You know you did the right thing. And that energy will always come back to us when we do. We've walked out of listing appts many a time after recommending that they not sell. Sometimes it's just the plain old truth, and that's of course what separates the best of us from the rest.
cheers
Hi Richard,
Sorry to hear about your wasted day, but you at least did the right thing in not taking the listing.
Have a nice weekend.
Michael A. Caruso