The Quick Close
530 White Gate Lane, Stowe, VT
A powerful strategy to realize value in a real estate transaction is to offer very strong contract terms – quick close, large deposit, quick inspection, no attorney review and no mortgage contingency – in exchange for a purchase price that is below the value of the property. This strategy is best implemented when a property has been on the market for an extended period of time - as a few have during the last recession. This strategy is very risky and requires significant management on the part of the real estate agent.
My clients, Richard and Ronda, were mildly frustrated in their efforts to locate a house in Stowe. Their first complaint was not being able to find a local agent that would offer the time and direction they needed to organize their home search. A disorganized home search can lead to a significant amount of wasted time. As luck would have it, a couple of days after becoming clients a home they wanted came on the market.
In a multiple bid situation Richard and Ronda were able to get a property under contract without being the highest bidder – their bid won on contract terms – not price. During their investigation of the property a number of issues arose causing greater concerns for them, so we cancelled the contract. Our clients were crestfallen as they felt they had found their property in Stowe. Regardless, we restarted the search.
Richard and Ronda realized there is no such thing as the perfect property – just ones that are closest to meeting the majority of your wants and needs. After more searching we found an excellent property, next to Robinson Springs – arguably the nicest neighborhood in Stowe, which offered most of what they had on their wish list. They felt a contractor could help them add anything that was missing from their wish list. As Richard said, "There are never perfect opportunities, just really good ones."
They increased their budget slightly to take advantage of the current weakness in the luxury market and made an offer strong on terms; however, well below assessed value. After a lengthy negotiation process they had a fantastic property under contract at 10% below assessment – in a neighborhood that consistently sell above assessed value. In the end, they recognize they purchased a far better house in a far better location at a much better price than the original one they put under contract. Click here for information on the sale.
Since acquiring the property, Richard and Ronda dedicated hours renovating the home. They used a local interior designor to add some Vermont venacular to the architecture and design. The opened up spaces to make moving from one room to another easier. In the end, the renovated house meets more of what the market demands in the current real estate market. Should they ever decide to sell, Richard and Ronda should be reward hansomely for their time and effort. Please click this link to see more of the before and after from the renovation.