Doubting Thomas

I may have shared this little story with my readers before.  I bears repeating nonethless.

Sixteen years ago the Key West real estate market was soaring to new heights. Previous sales prices were replaced by even higher prices throughout the city.  Sellers were giddy.  My pest control guy was a multi-generation Conch. In addition to his business and family home, he had purchased two or three small houses which had appreciated. He sold everything and moved to Ocala with a wad of money in his pocket.  A lot of other Conchs did the same. Many left Key West with over a million dollars in cash. Others just waited to sell their houses for a whole lot of money. They were sure someone would pay their price.

I was working at Prudential Knight Gardner Realty on Duval Street and had floor duty one day when a really nice woman and her friend walked in. The woman and her male cousin had inherited a house from their grandparents who had no adult children. The woman and cousin were the sole heirs. She wanted to list the property and asked me to take a look. I did and eventually listed it for around $775,00.

The house was an unassuming mid-century in the New Town area of Key West. The owners had updated it with a Home Depot kitchen and baths. The updates were cheap and looked cheap. The house was clean and showed okay. There was no pool. The 1,600 sq ft house sat on a nearly 6,000 sq ft lot covered with pea rock. It was fugly. But that was fixable. I held many open houses. I had many showings. Fugly is always hard to sell unless priced low enough for it to be perceived as a value.

One day I showed the house to a part time Realtor who was also a CPA. His customer (a widow spending her late husband's life insurance proceeds) made a cash offer of $750,000 to buy the house which had been on the market for about half a year (during a soaring market). While the dollar amount was an almost ten per cent discount to the asking price, the house had no other offers.  My sellers asked my advice. The woman had seen the house and knew it was fugly. Her cousin had not. They thought they might get more money if they waited. I urged them to take the cash offer. I didn't know if the house would appraise. I really doubted we would get any higher offer. I told them that you never know what tomorrow will bring. Nobody does. Ever.

The sellers accepted the $750,000 cash offer. We closed a few weeks later. The sellers inherited the property free and clear of any mortgage. They were the beneficiaries of a big cash payout. They had questioned the deal. But they accepted my advice and agreed to move on.

Seven months later Hurricane Wilma struck Key West in October 2005 and flooded that house and just about every other house in the New Town area. I drove by my former listing a few days after the hurricane. Everything from the inside had been dragged to the street. I felt sorry for the buyer who bought the place as an investment and for her tenants. The house sat empty for months. The same house has been on the market for over two years priced significantly below the price my sellers obtained. It is still fugly only more so!

I think a lot of sellers over think real estate deals. Of course there may be a better outcome if you wait long enough. But if you wait too long, something else like a hurricane or pandemic, or war or whatever could also happen. A known outcome may outweigh a lot of what-ifs.