Latest / Market Ready / Equity Rich, Cash Poor to $1.66M Win

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Equity Rich, Cash Poor to $1.66M Win · Market Ready

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  We ended up selling the house for 1 1660. So about 3.7 to 4% above list
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  price. He was extremely happy about the outcome, how fast it sold. We came on
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  the market on Thursday. Believe it or not, it actually snowed on that Friday.
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  I just remember driving out there doing a broker's open. We had an open house on
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  Saturday and it was sold by Saturday night. He was just ecstatic.
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  Every [music] listing has a story. This is the Market Ready podcast.
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  This week we're going to be having a conversation to really discuss what
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  happens when timehonored traditions like taking your
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  shoes off when you enter someone's home
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  is just not going to happen because the home is that bad that you're thinking
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  there's no way I'm taking my shoes off here. Super excited to have Hao Dang
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  with us this week on the podcast to talk about this and a lot more. How how are
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  you doing? I'm doing great. plans. Thanks for having me on.
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  Really appreciate it. How why don't you just really briefly tell everybody a
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  little bit about your background, how long you've been in the business, what
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  area you serve. Let us know a little bit about you.
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  Sure. We work the Seattle Bellevue area. I've been in the industry for about 24
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  years. I run a team of about 20 agents and we typically sell about 200 homes a
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  year. Wow. That's impressive. And you know, out of those 200 homes a year, I'm sure
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  you come across a lot of different things. Yes. Yes.
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  Okay. But when we first started chatting about this, what I thought was most
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  interesting was rarely have I ever had an agent say, you know, I wasn't sure I
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  wanted to take my shoes off when I walked into this place. So tell us a
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  little bit about this home. Tell us what the background story was and kind of
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  what you experienced. What was it like when you first walked in? What was that
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  reaction? So the owner called me. He's a second owner of a property over in Redmond.
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  Called me online, found me through chat GPT, uh, funny enough. So, we scheduled
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  an appointment, went to go look at the house, and I walked in and I looked at
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  the carpets, kind of looked at the flooring, and I was like, "Wow, he's had
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  either multiple dogs in here or pets or he hasn't cleaned the carpets in quite
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  some time. Found out that he hasn't done any maintenance to the home at all for
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  25 years. He has two kids and just kind of just lived in the home just the way
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  he lived in it. Uh, he's always wore shoes in the home, so I was like, you
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  know what? I'm going to wear shoes, too. Most of the time, I do take off my shoes
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  just to be respectful, but in this case, I was not going to do that.
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  [laughter] And so what was your initial reaction when you first walked in?
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  You know, I was like, you know, let's take a look around and uh let's assess
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  the home and see what he's willing to do and try to get a good feel for the
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  situation. And and then so went through the home, carpets were in pretty bad
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  shape. The walls, you know, all different colors, appliances were
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  falling off, the handles were falling off. He's like, you know, two of the
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  burners on the stove works, but not all of them, but that's okay. I only need
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  just the two. Some of the glass windows were fogged and frosted, had broken
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  seals all over. I was like, "This doesn't bother you." He goes, "Not at
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  all. I don't really care to see my neighbors. The landscape was not in
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  great shape. Everything was overgrown." I was like, "Do you have a landscaper?"
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  He's like, "No, I just prefer just to like not have any of my neighbors like
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  come and see me or any of that stuff." I was like, "Okay." So, I was like, "So,
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  we scheduled a Zoom after we met for the first time." And I asked him, "Do you
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  want to sell the property as is? I could bring you a cash offer. In fact, I might
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  buy the property myself or I could probably get someone else to buy it. We
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  can do some work to it or just do like a full full remodel and try to get you the
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  most amount of money and try to give him a full range of like what he could sell
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  the property for. Interesting. So, now is this a um is
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  this two bed, three bed? The four bed, two bath, like 2500 ft.
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  Like I said, he's lived in the house for 25 years, so no maintenance whatsoever.
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  And where does that fit within the the typical types of properties within that
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  area? You know, it's for the most part, most of the homes are really nice. I
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  would say average price is about 1.5.
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  Fully renovated is a little bit above 16 and no renovations at all. You're
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  probably like 125 to 135.
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  So, looking at this, what was your general initial assessment of what it
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  would possibly go for on the market asis?
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  I was thinking asis 13 to 1325. Put in
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  some renovation. uh maybe 20 30 you
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  might be able to get 145 full renovation. We calculated about 60 to
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  70,000 and then he might be able to push like high 15s or even six.
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  Interesting. Okay. So, you presented him with his options. What did he decide to
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  do? You know, it's funny enough. It took probably about eight calls, 12 text
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  messages, and numerous emails and about five weeks of follow-up fortunes in the
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  follow-up before he responded back. I mean, he it was probably at least
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  minimum five weeks, maybe seven weeks. I I I would have to go back and te take a
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  look, but he just was nonresponsive or was like, "Let me think about it. Let me
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  think about it. Let me think about it." Yeah. And he just he just didn't want to do
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  anything right away. Which kind of seems on brand for the guy
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  that's like, "I only need two burners." No, you know, I don't lawn. What's a
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  lawn? I don't know. I need to mow that. But not surprising enough, like he takes
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  his time and doesn't do things, you know, quickly. And I kind of knew that.
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  I mean, just look at the way he lives, right?
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  It's So, what is your So, okay. So, what was the decision that he finally then
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  made? He finally called me and said, "Hey, let's just go ahead and do it." Because
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  what I did is week after week after week for about a period of time, I showed him
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  homes that were ASIS, showed him homes that were in middle of the road, and
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  showed him homes that were, you know, fully renovated and how much he can get.
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  And so, he was looking at his return on investment, his ROI, and if you put in
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  70, like you could potentially get $150 to $200,000 more. And so he saw the
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  value in the work that could get done. I
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  had the contractor come over, give him all the bids so he knew what it would
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  cost and we put a timeline together and ultimately it came down to, you know,
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  when can we start? Are you sure about the budget? And then can we get this
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  done in a timely manner to get it on the market and I said yes and I guaranteed that.
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  Interesting. Why were you comfortable guaranteeing that?
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  Well, just be, you know, I do a lot of listings. Like 100% of my business is
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  listings. You know, I have a great staff. I have a listing coordinator. I'm
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  a transaction coordinator. have a production manager that oversees
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  everything, make sure we get the pricing right, you know, the inspectors ordered,
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  you know, stages ordered, you know, like we just have a process and a system that
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  makes everything move very, very efficiently and smoothly that I just
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  know that we're not going to have any hiccups. And I'm very confident in what
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  we do. You know, I've sold close to about 3,000 homes now.
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  That's amazing. What What does your listing coordinator do?
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  Listing coordinator manages like the inspector uh and goes over the
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  inspection report. So all the deficiencies, safety items, and things
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  that are concern to the buyers. So we just want to make sure that the house is
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  in tip-top shape so that when we do go to market, there's no objections. You
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  know, inside outside paint is like what's current to like what buyers are
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  looking for, uh what builders are using.
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  So we're up to date on all the remodel. Interesting. So you're actually doing a
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  pre-insspection, correct? Yes. Okay, got it. Do you and just because
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  it's a question that comes up for a lot of agents. It's a great idea, but some
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  agents say, "Look, you know, if I do a pre-insspection, then I have to disclose
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  all this stuff because it's now a known factor." How do you feel about that? And
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  how do you get around that? You know, I love it because, you know,
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  I'd rather find things out earlier on, like the crawl space, the leaky roof, or
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  the the furnace and so forth, the condition of it. And the reason why is
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  if you get an offer after you go to market, then you're kind of like at a
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  stalemate in the sense that you're at the buyer's beck and call as far as what they
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  want to negotiate as far as credits and things to be done. Whereas we catch
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  things earlier on, we can address those items, provide receipts, invoices, and
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  get it done and taken off the report so buyers never see it.
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  That's awesome. Um, so pivoting back just slightly then, so contractor comes
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  in, gives the estimates. How did you did was he did he have the cash and capital
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  to do that? How did that get dealt with?
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  He actually didn't uh unfortunately he had a lot of equity. So equity rich cash
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  poor and so no real savings and so u we have a program called Windermere Ready or
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  notable and so he borrowed up to $50,000
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  and the rest he actually um borrowed out his own funds to do it. But you know we
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  covered paint inside outside paint because again he hasn't done anything.
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  outside paint was flaking. Like I mean you just touch it just a little bit and
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  the paint was gone. Yeah. Pressure washing like I mean just
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  pressure washing uh the paint or the wood. I mean we found so much rot on the
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  house around especially around the window trims.
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  Yeah. That we had to fix all that. Um, so pressure washing the house, inside
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  outside paint, new deck, new carpet, new
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  uh LVP flooring, high-end flooring, new appliances, new windows, uh, service the
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  furnace, and we addressed all the inspection items as well.
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  That's amazing. Okay, so let's jump ahead. You go through the process. Was
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  he during the process of all this work being done, easy, hard? What was it like
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  managing that part of the relationship? You know, I look at this business like
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  doing sit-ups every day. You know, you do 100 sit-ups a day, you kind of get
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  accustomed to it. This business, same thing. You do the hard stuff earlier on
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  and then it becomes a lot easier. We just came in and just attacked each one
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  project one by one and we kept them updated every two to three days as far
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  as what needed to be done. In fact, he we actually invited him to come over and
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  take a look as well and take photos and like actually create a timeline and a
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  process like he he you know, it's it's a memorable home for him. He's been in the
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  house for over 25 years. So, he took pictures of every step along the way.
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  Well, how did he feel after he saw the finished product?
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  Almost to the point he didn't want to sell the house. I mean, he was like, I
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  can't believe that the house transformed and looks this way, you know, with the
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  colors, the carpet, the finishes. He's like, I wish I would have done this
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  before uh, you know, maybe one or two
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  years before selling the house so that he can enjoy it rather than doing this
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  for someone else where they get to enjoy it. It's interesting and I hear that a
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  lot from people too when they say when they do these capital improvements a lot
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  of times the homeowner is like, "Yeah, I'm not so sure I want to sell anymore.
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  I don't I it is it's a shocking thing to see how many people don't realize a
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  little bit of that work, right, goes such a long way in terms of one's visual
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  use and enjoyment of a property." 200%. I totally agree with you. Yeah,
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  it's incredible. So, okay. Now, you said originally one, two, maybe 13 if you're
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  just putting it on as is. Tell me what was the outcome? What what happened
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  next? So we ran numbers. Of course the market was low earlier this year and you know
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  inventory was low and so rates were also very favorable too. Um we didn't have
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  the war and so forth but we end up pricing the house at 1.6 definitely on
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  the higher side and we ended up selling the house for 1660. So about wow three
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  and a half 3.7 to 4% above list price.
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  He was extremely happy about the outcome how fast it sold. You we came on the
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  market on Thursday. Believe it or not, it actually snowed on that Friday. I
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  just remember driving out there doing a broker's open. We had an open house on
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  Saturday and it was sold by Saturday night. Like again, 4% above list and
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  surprisingly pleasant. He was just ecstatic. Like there's I mean he
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  couldn't hold his emotions then. That's awesome. And and you know would
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  you say this is a typical thing for the stuff that you experience when you've
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  come across these things? Was it slightly on the atypical side? What what
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  has your experience so far been in this? You know, it depends if they're willing
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  to uh take a chance on us and believe in us and trust us and whether or not we
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  can perform and actually say what we're going to do, but I would say it's pretty
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  atypical. Yeah, this is something that we normally do day in day out. Uh it is
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  pretty normal for us if someone's willing to invest in their property uh
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  and invest in all the deferred maintenance that they've had um and sell
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  it for the max amount of money and he saw the return on it. That's the thing.
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  he can see the return on this. Um, and we just had to follow, we just had to
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  follow the process. So, we're talking about you're talking about a $300,000
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  difference. Hey, you put in the work, you know, it's u Yeah, you put in the work, you
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  will see the returns. And and you know, I think too, one of the things that
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  always surprises me when I look at agents that do this type of work and and
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  the work that you're doing is again
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  how much easier it is when there's a system in place, right? When you have a
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  system and a process in place, which clearly you do, you're not doing 200
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  properties a year, right, off of running it willy-nilly. Tell me a little bit
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  about the system that you have in place and why you view that as as a good
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  benefit for you. So, usually I have my uh listing manager come out with me so I
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  don't have to repeat the the redundancy of what needs to get done. So, sometimes
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  either my production manager or listing manager will come out and, you know,
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  they take notes of everything that we need to get done. We summarize
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  everything, compose it, send it to the client, and then, you know, get costs
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  from the contractor as well. So, we put a lock box and we meet them out there.
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  So, we get all of our costs. We're we're probably within like $1,000 of what it
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  would actually cost or we're right on point uh of everything that needs to be
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  done to the house. Uh and from there, we schedule the inspector. I like the
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  inspector to come out earlier than later, so that way we can budget the
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  cost of the home along with the things that are going to come up on the
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  inspection so the seller knows what he's looking at as far as like future costs.
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  Super interesting. I I'd be curious to see what you think of this. I know that
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  for a lot of agents and the ones that are listening to this, you know, they
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  say, "Well, look, I'm a solo agent. I I do 7 8 n 10 deals a year. I've got a
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  very good practice in place." You know, again, price points vary and everything
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  like that. How you've got all these people at your disposal that are coming
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  in and helping. Of course, this is easy. What would you tell those agents that
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  are the the solo agent or maybe it's a small team, two, three people max, in
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  terms of being able to to operate in this fashion?
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  You know, I was a solo agent at 1.2, too, Lance. And so, you know, at one
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  point when I was selling 10, 15 homes, I would bring out a co- agent. You know,
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  co-agent would come out and give me recommendations. A good friend, a good
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  friend that you you partner with where they come out, give you an assessment on
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  the house, their recommendations, and they're just like another body to give
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  you suggestions on what is best for the client.
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  And so, that costs almost nothing. You're there just to help one another
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  out. And so, you know, that I started off that way as well. You know, I
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  started off with, you know, just selling just a few homes and just having an
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  agent come out and shout, they shadow me and I shadow them and we just give each
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  other suggestions. It's like a it's like a backup quarterback. You know, you're
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  help they're here. We're on the same team. We're here to help one another.
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  Interesting. Where was the inflection point? Where was that pivot for you
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  where it moved from, okay, I'm doing this, but I'm busy enough that I need the help?
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  Uh 2012, 2013. Yeah, that's that's where
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  the pivotal point was. I mean we started giving on Zillow that's another topic
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  itself but we started giving on to Zillow back then
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  and that then started to generate more of the lead uh opportunity so therefore
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  you needed more support correct yeah we were getting about 120
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  to 150 clients a month at that point that's amazing so current day you know
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  what advice do you have for the people that are out there that are talking
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  about uh thinking about doing some capital improvements to a property I
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  mean look there's a lot of people out there that'll say look you know what I
• 15:03
  sure maybe I can make a few more bucks I don't want the headache I want the
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  hassle. I just want to put the damn thing on the market and let it rip and
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  ride and and call it a day. You know, there's an argument to be made for that
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  too. You know, where do you help decide or defer the identify the difference
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  between those two options? You know, I would say, you know, where's
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  the motivation for the seller? Do you want it quick and just, you know, a
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  quick price? Like, let's say, for example, I just want to price it well
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  and not do any work. Let's just sell it. Or I'm I'm willing to do the work and
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  get a contractor in here and bid up. uh just find a thirdparty provider. For us,
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  it was notable or Windermere Ready in that sense where you can borrow money up
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  front. In this case, it was a small percentage paid at closing, which was
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  very favorable to the seller. So, no upfront money to the seller, get all the
• 15:48
  money up front, do the work, and then um put a line timeline together, like I
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  said, and you know, make the house super presentable. It's like going to a job
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  interview, shoot, tie, jacket on, and so that everyone loves the home, you know,
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  and sell the story of why the seller is selling and why it's such a great
• 16:06
  location in a community. It's sometimes it's just not the home. You got to sell
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  the community in the neighborhood as well. It all has to come together.
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  Interesting. Tell me more about that. What do you mean by selling the
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  community in the neighborhood? You know, like in my partic like where I
• 16:17
  currently live right now, it's like I live pretty close to the mall. I live
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  next to the park. I play tennis three or four times a week. You know, I take the
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  kids out swimming like yesterday. We love going to the beach, uh, playing in
• 16:27
  the sand, go paddle boarding. It's not just the home because your home makes
• 16:31
  the memories. Uh, but the house is just the house. Like the number of beds,
• 16:35
  baths, that's just those are all specs.
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  But in actuality, anybody can live in a house, but not everyone can live in a
• 16:41
  home and make all those memories that you have with it.
• 16:44
  That's a great point. you know, I I wrote a book on working with uh for
• 16:47
  agents for on working with seniors 65 and over um to better understand what
• 16:51
  the what their needs are because it's a longer timeline and runway. But one of
• 16:54
  the things that was most interesting when I did the research for the book was
• 16:59
  that, you know, at at a certain point when people age, the home and what the
• 17:03
  home represents shifts dramatically and
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  it stops being an asset. It stops being a a a financial entity and it becomes a
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  timeline, right? It becomes a chronological history of experiences of
• 17:19
  life of life lived. It holds a different type of meaning and sometimes it's
• 17:23
  really hard for people to think about changing that, turning that over, making
• 17:27
  changes to it or doing things differently because there's a comfort
• 17:30
  that I think comes with that. So to your point, I mean, I think it's really
• 17:32
  interesting to talk about how do you help, especially people that want to
• 17:36
  maintain the integrity of the home that they've lived in, right? And they love
• 17:39
  it for what it is and they view u they
• 17:43
  view the aesthetic or value of it, but also at the same time make it something
• 17:46
  that a younger generation or other people may find again aesthetically
• 17:50
  pleasing or even working that neighborhood, that area, and the
• 17:53
  lifestyle that someone's looking to live. That's a hard thing to balance. I
• 17:57
  I've seen at times. I agree with that. I mean living in your
• 18:00
  home is like they say is your largest investment and truly like when you do
• 18:04
  retire later on I hear that I don't know what the exact number it is but 70 to
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  80% of what you actually live on to retire on is the equity that's in your
• 18:12
  home besides the stocks that you pull out because at least you know you do get
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  that at least in Seattle or I don't know if it's a national thing or not but that
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  $500,000 tax deduction where you don't have to pay any capital gains u for a
• 18:23
  home I mean that's a real deal like you could buy a house for 800,000 sell it
• 18:27
  for 1.3 not pay paying taxes on it where like on that same same $800,000
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  you put 20% down which is 160,000. Yes, you could put in the stock market but
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  are you paying the principal down? Are you writing off the interest? And then
• 18:41
  truly you just get equity over time. You know that's the beauty of living in a
• 18:45
  home is you're living in the house. You get to enjoy it. You get to see it,
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  touch it, smell it, all your five or six senses and then at the end of the day
• 18:52
  when you sell on sell it, you move on to the next, right? You move on to the next
• 18:55
  chapter of your life. Yeah, it's so true. really really well
• 18:58
  said. As we wrap up for today, I want to talk about one last thing with you. What
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  advice would you give agents listening to this about how to go about
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  positioning the value and benefit to capital improvements to get something
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  market ready? Find a third party provider that can
• 19:14
  help or reach out to other fellow agents that have a program for you or you know
• 19:18
  that you can utilize and benefit from.
• 19:21
  Ultimately, it will h help the seller and have different products out there
• 19:24
  that are available to sellers, not just one product or one service.
• 19:28
  Okay. Products. Really quickly though, give me a couple of examples of when you
• 19:33
  say products, what does that mean? Well, like you know, the Windermere Ready,
• 19:37
  notable, you know, we have a cash offer program which you know, typically
• 19:40
  they'll buy it for like 70 80%, we have a a pool of investors, so that's one
• 19:44
  option. You can go to market, you know, and do some semi-provements. And then notable
• 19:49
  is like a full remodel. And so that's another program or product in itself.
• 19:53
  Got it. Super super helpful. And what would you tell consumers listening to
• 19:58
  this in case there's consumers listening to this, which I'm sure there are. What
• 20:02
  would you tell them about the value and benefit of getting a home market ready?
• 20:06
  So here's here's the beauty about notable or Windermere Ready is the fact that
• 20:10
  if you pull 50,000 or whatever amount out to do the renovations to your home,
• 20:15
  you're paying taxes, right? You're paying tax on that money. do the work
• 20:18
  and then you have to you just lose that you know you lose the taxes or the
• 20:22
  capital gains all that take advantage of the equity that you have in your home
• 20:25
  because you could pull up to about 80% and then you utilize us typically I
• 20:30
  believe it's like 1% um and so for every 10,000 you borrow like $100 for that
• 20:35
  amount um it's so so well worth it I mean it's the best ROI you can imagine
• 20:40
  I love it I love telling people would you spend $1,000 to make 200,000
• 20:44
  100% yeah right no brainer No brainer.
• 20:48
  No brainer right there. Right. Hey, how I really appreciate it. Thank you so
• 20:51
  much for being with us today. Great stuff. And again, uh, in the show notes
• 20:55
  will be all the areas that you can find how and learn more about him, some of
• 20:58
  the work that I do, and again, all the different things that House mentioned
• 21:01
  here today. Really appreciate it. Thanks so much for being here with us and great
• 21:05
  great stuff, man. Thank you, Lance. Appreciate it. [music]