Our story began nearly 8 years ago. At that time, I was pregnant with our second child and desperately wanted to leave my job when the baby was born. My husband had experience in the construction business from when he was younger, and we had contracted out our home several years earlier. With this in mind, my husband got his contractors license so that we could build spec homes on the side to supplement my income. Our first experience went beautifully, we sold the house before we finished it. In fact, we even netted enough profit to pay off my car. We were in a great place financially, had learned a great deal following Dave Ramsey’s debt elimination program, and felt like we were ready to take the leap for me to stay home.
After such a smooth experience the first time, we decided to build two spec homes in the same neighborhood. We placed them just a lot down from each other. We decided that with the proceeds we would be able to pay down our mortgage and put extra away in savings. From our standpoint, our plans were perfect. At least they seemed that way to us. Then, right after we broke ground on those two houses the real estate market began to crash. My daughter who had just turned 3 was diagnosed with type I diabetes, and 3 months later we discovered my father had incurable brain cancer. With all of this on our plate, did I mention we were right smack dab in the middle of building two spec homes in a housing recession?
Life was very stressful during this season. Between taking care of a newborn, learning a new way of life with my daughter’s diabetes, and trying to visit my daddy as much as possible, marketing our homes was impossible on our own. Over the next 10 months we made the three hour trip to visit my dad as often as we could. At first, we tried to sell our spec houses by owner. It cost more to build the houses than we originally anticipated so we were hoping to bring in a larger profit. Do you know what happened? Those houses sat, and sat, and sat some more. No one looked at them, no one noticed our beautiful bright for sale sign in the yard, no one answered our ads in the newspaper. If we ever did get a call, either they didn’t want to make an appointment to see one of the houses or if they did, we were out of town with my dad and unable to show the houses.
As my dad’s health continued to decline we knew that the added stress of trying to sell the houses on our own wasn’t worth it. Not only were our houses not being exposed to buyers, but every month they didn’t sell meant two additional mortgage interest payments for us. So, not only were we not saving money by trying to sell them ourselves, it was actually cutting into our potential profit month after month. It didn’t take us long to realize something had to change.
I can tell you I breathed a huge sigh of relief when we signed the contracts with our realtor to list the spec homes. No longer were we solely responsible for marketing, showing, negotiations, contracts, etc. Although we had used a realtor to sell and buy houses before, I never understood their role and appreciated it as much until this moment in our life.
Here is what we learned:
- Our realtor helped us determine a competitive price for our spec homes so that they would be looked at more favorably by buyers. Since there were several other houses for sale in the same neighborhood, our realtor could look at both current listings and sales history to make the best recommendation. Plus, I recently read that people who use a realtor sell their home for 16% more than those who don’t. We could definitely use that additional 16%.
- By hiring a realtor our house was instantly in front of thousands of customers on realtor.com, and in the Multiple Listing Service. Having more than a sign in the yard and an occasional newspaper ad was key in getting our house in front of our target market.
- Open Houses – Our realtor scheduled open houses during strategic weekends. Even better, we didn’t have to spend our Sunday afternoon in the houses hoping for customers. This was more time we could spend with family.
- If you have ever tried to sell a house by owner then you know how awkward it can be to show a potential customer your home. When they were for sale by owner, often times potential buyers were reluctant to schedule an appointment for a showing when they called. Having a realtor meant that buyers were more comfortable taking the time to look through our spec homes with their realtor, someone they trusted.
- Once we had a buyer (hallelujah) finalizing the contract as well as the details needed for closing were all taken care of by our realtor.
As you can see, during this period of our lives a realtor was the key to selling our spec homes. We were able to focus on our family and the issues we were facing, while the realtor was able to help us get top dollar for our properties. We learned a very valuable lesson through this process, trying to sell our houses by owner ended up costing us more in the long run than we could have ever saved by not hiring a realtor.
Now, the most important task is finding the perfect Realtor. Did you know that Dave Ramsey offers an Endorsed Local Providers (ELP) program? The ELP program is super simple to use, trusted program. ELP’s are chosen based on the following criteria:
- Have the heart of a teacher
- Put the client’s needs first
- Have proper licensing and active license in good standing
- Agree to help clients based on Dave Ramsey’s principles
- Be licensed and practicing real estate full time for at least five years
- Be a high producer in their particular market (i.e. 40-120 transactions a year)
- Have the heart of a teacher and be willing to take time with clients to explain the process
- Be committed to service (i.e. will return phone calls promptly, show the house, advertise it properly, etc.) and have a record of demonstrating this service over time
- Be willing to provide real estate advice based on Dave Ramsey’s principles
- Be willing to work with anyone, regardless of financial
Our realtor, truly saved our sanity. Getting our spec homes in front of thousands of potential buyers was key. We’ve learned our lesson, and won’t make the the same costly mistake again.