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A Texas Real Estate Story: The Good, the Bad and the Costly

Updated: Jan 7

Like shopping for health care, there are very few first-hand accounts on the internet about selling your home.

At the end of 2016, my wife and I decided to sell our house, most of our stuff, and travel the world. We knew that due to the challenging Houston, TX real estate market (oil prices had halved since the purchase of the house two years prior), the selection of a real estate agent¹ would be paramount.

Like most of my readers, I had previously bought and sold real estate (in my case: three buys and three sells). My experience, as well as conversations with friends, neighbors, and colleagues, had led me to a theory that almost all buyers and sellers spend a woefully inadequate amount of time and effort trying to find a good agent. Buying and selling your home is most likely the most important transaction of your life, but most spend less time selecting the right agent to hire than selecting the right computer to buy. Most of us interview at most two agents and many none at all, as we generally hire an agent based on a friend’s, neighbor’s, or stranger‘s recommendation. When I ask someone why they selected a particular agent, I’m usually met with “I liked her”, “There was a connection”, “I got a good vibe” or my favorite “I used him to buy our house”. The more I thought about it, I realized there must be a better way of selling a house. Now, I didn’t know what that way was, but I was determined to take a more rigorous approach to the entire process.

As a home seller, I had basically four options:

1. Full-service real estate agent (aka “pay the six percent commision”²) We had used a full-service agent to buy the house, so he should have been an obvious choice. Unfortunately, he had not done a very good job the first time around (forgot to initially inform us that our new house was in a flood zone³, failed to provide the best comps⁴, failed to show up for the inspection⁵) and therefore was not an option. We had hired him because “There was a connection”. He was a nice enough guy, who looked like Christian Bale and sounded like Matthew McConaughey, but even that wasn’t enough to convince the Missus to overlook his past performance. Also during the buying process, we had interviewed a number of agents, all of whom were lacking, one whom we actually worked with a few weeks until we realized we were working harder than he was.

We interviewed three full-service agents to sell our house. The first two used what I have come to realize is the classic (and only) real estate agent sales technique. That being to show up at your home at the appointed time, tour your house while issuing a few generic compliments (“I love the natural light“, “great backyard”, “beautiful floors”, etc.), then hand you “The Binder” which contains:

- Various brochures and documents that tout their ability to sell your house. Abilities that every agent and broker posses, you know: MLS listing service, listing on, access to exclusive clientele, blah, blah, blah . . . - Brokerage bio, agent bio, blah, blah, blah . . . - Comps for your house that lead to the recommended sales price (i.e. the only thing you really care about).

Not a single agent made any effort to personalize their pitch. The phone call setting up the appointment, the small talk, the compliments, and The Binder were all identical. I kept waiting for something that was specific to our situation, but it never came. When I first started out in the business world, I was a salesman for Mobil Oil. I sold lubrication oil to ships. The one thing that was drilled into my head was to personalize every sales pitch. No two customers were the same, so the sales pitch needed to change with each customer. Identifying the “suffering” points was critical and solving those points needed to be unique to each customer. - Side story: One of the agents we interviewed was a woman in her late thirties. At the end of her sales pitch, I looked at her business card and was very surprised to see a stunning woman looking back at me. I almost held the card up so I could l look back and forth between the photo and the actual. I quickly realized that the card was more than a few years old.

The third agent we interviewed was holding an open house across the street from us. I liked her For Sale sign (The Shingle) and that because she was selling a house so close to ours, she might have a good feel for the neighborhood. Houston was odd, in that, almost every For Sale sign had a different agent’s name with almost as many brokerage names. You never saw the same name twice. Per capita, Houston has a ton of agents and brokerages. Whenever I spoke to agents it appeared that they sold real estate throughout all of Houston, and didn't specialize in any particular neighborhood.

When we arrived at the open house I soon lost interest, as the agent appeared to be very young and the brochure for the house had a pen & ink change for . . . the price! From $405,000 to $399,900 (I wanted to ask if she had just changed the price). We picked up on the fact that she was not the agent whose name was on the sign. She went on to explain that the woman whose name was on the sign was her “Mentor” (and therefore she was, of course, her "Protégé"). I found this a little amusing, as you have to be careful about using the word mentor, as it makes some people think of Obi-Wan Kenobi/Anikan Skywalker and others of the Seinfeld episode. Either way, I quickly realized that “there wasn’t a connection”, also I felt it important that our agent be able to legally consume alcohol.

2. Discount real estate brokerage

There are some (but not many) full-service brokerages that do not charge a 6% commission. One of them is an outfit called Redfin, it’s actually a publicly-traded company (RDFN). They only charge a 1.5% seller's commission (you will generally still need to pay the 3% buyer’s agent commission). I had noticed one of their For Sale signs in front of a house a block away from ours and contacted the agent. She was a nice woman who showed up at our home at the appointed time and proceeded to use the classic (and only) real estate agent sales technique that is mentioned above. At one point though she mentioned that she knew the builder’s rep who sold us our house two years prior. I became filled with hope, a hope that she would next say that she had called him in an effort to gain a better understanding of how to best sell our particular house. Well, my hopes were quickly dashed, as she continued on, explaining how Redfin would market our house using the MLS listing service, listing on, access to exclusive clientele, blah, blah, blah . . .

3. Flat Fee MLS Listing Service

There are brokerages that will list your house in the MLS for a flat fee (and therefore avoid the 3% seller commission). It’s generally a no-frills deal, as you have to provide and enter all the details of the MLS listing (including the all-important Remarks section). Generally, you will still have to agree to pay the 3% buyer’s commission (or else why would a buyer’s agent show a customer your house?). My wife and I had successfully gone this route twice before in Washington, DC, so this was a very viable option.

4. For Sale By Owner (FSBO) To me, FSBO means not listing in the MLS and therefore avoiding both the 3% buyer‘s commission and the 3% seller‘s commission. This is a true do-it-yourself option and to me is not a realistic option. Without the MLS, I’m not sure how you could get the exposure you need. I guess if you were in no rush to sell, then it might work, but I just don’t know. Also, I’ve met a few people who tried this, and generally, they were just a little weird.

And the winner was . . . discount full-service real estate brokerage. Actually, Redfin wasn’t so much the winner, but the survivor, the best of the worst. While we weren’t impressed with the agent, she was no worse than the others and we were savings 1.5% of the sale price.

You may have noticed I mentioned the For Sale sign (The Shingle) a couple of times. It‘s a particular pet peeve of mine, as I‘m bewildered by the number of signs that are cheap, small, hidden, broken, confusing, and worst of all not plumb and level. I cannot understand how a man or woman could put their name on a sign that quite simply looks like crap. If the sign is unprofessional, then what does it say about the agent whose name is on it?

The Cheap, Small, Hidden, Broken, Confusing, and not Plumb and Level

Well, we met with our Redfin agent, made it official, and started down the road to real estate riches. As my wife had already stylishly appointed the place, there was little if any staging to be done. We agreed on a sales price of $424,900. As Houston was a buyer’s market we needed to price it above our expected sales price to allow room for negotiation.

I knew we were going to earn our 1.5% as soon as I saw the first draft of the MLS that our agent "Beverly Mae" (henceforth her nom de agent) had written. It was atrocious, almost like she had never written one before. My wife completely reworked it into the superior marketing document it needed to be. The photographer on the other hand did an outstanding job. Nothing new there though, as most real estate photographers do a pretty good job (if you could live in the house the way it looks in the photographs, nobody would ever sell).

On April 20 2017, the plumb, level and aesthetically pleasing For Sale sign was installed and we waited for the offers to come pouring in. And in a way they did. We were excited when Beverly Mae called us with an offer only a few days later. Our excitement quickly ebbed when we realized it was for $390,000. The lowballers had appended to their offer a lengthy document, which they used to compliment us on our style and landscaping⁶ while professing their ardor for our house. To be honest I'm not sure of the entire contents, as I stopped reading their love letter after they stated that $390,000 was the best offer they could make, as their finances would allow nothing higher. The Missus was insulted by the offer and wanted to buy a gun (we did live in Texas at the time). I gave her some Godfatherly advice, "It's not personal Suzie, it's strictly business". Despite their instructions, we countered at $420,000. Well, they were as honest as they were cheap, as we never heard from them again.

A week went into a month, a month into two months. We started dropping the price, first to $417,000 then $410,000. An acquaintance mentioned we should have followed the real estate adage "the first offer is the best offer" and I started to second guess myself. The Missus was a rock though, "we just have to be patient and see this through". Very wise advice I thought, but just to be on the safe side we also buried a statue of St. Joseph upside down in our garden. Now, I realize some of you are saying "What took you so long?!". Well for those others who are saying "WTF!?", let me explain: Burying a statue of St. Joseph in your backyard, upside down, is a well-known technique to enable a real estate miracle, as a subsequent "successful closing won’t be long in the offing". The reason why is obvious, as St. Joseph is the patron saint of home and family. Don't believe me you heathens? Well, it is well documented here. Not Catholic? Well, then I guess you'll never sell your house.

In our small subdivision, there was an adjacent, but much larger, similarly styled house that was also for sale, though with a significantly higher listing price of $575,000. As both For Sale signs (ours and theirs) were at the entrance to the subdivision, well away from both houses, we realized that many buyers that visited this larger house may not have realized our house was also for sale. We expressed our concerns to Beverly Mae, who was not that concerned about our concerns. We pushed and at our insistence she provided us with a second For Sale sign. We were then tasked with installing it (with a container for brochures) directly on our front porch in full sight of those entering the larger house. Not sure if it was going to help sell our house, but it certainly made me feel better. The pushback from Beverly Mae was irksome, but then again we were saving 1.5%.

After 100 days on the MLS (and only three weeks after burying St. Joseph), the Missus informed me I could stop crying and get out of the fetal position, we had just received not one, but two offers! That night we both gathered 'round my iPhone (on speaker), like we were gathering 'round a tube radio to await Edward R. Murrow announce the end of WWII. Beverly Mae informed us that she had gone back to both buyers for their best and final offer: Buyer 1 responded with an offer of $400,000 and Buyer 2 with an offer of $397,500 with the next step being for her to get a signed contract from Buyer 1. "Whoa, hold on a minute" I replied and asked her to go back to Buyer 2 and "tell them the bad news". Beverly Mae was reluctant as she didn't think this was professional, but she would if we insisted. We did and were rewarded with an offer of $405,000 from Buyer 2. "Next step is for me to get a signed contract" said Beverly Mae, to which I replied, "Not yet, please tell Buyer 1 the bad news". "If you insist" she reluctantly replied. We did and were rewarded with a $410,000 offer from Buyer 1. Unfortunately, after Buyer 2 heard the bad news (again), she didn't make a counteroffer. "Well I guess the next step is to get a signed contract," I said to Beverly Mae and she did.

We subsequently invited Buyer 1 to our home to say hello and introduce them to our old home. After a congratulatory toast to their new home, we were satisfied to learn that they had only noticed our home was for sale when they saw the For Sale sign on our front porch!

Well some 45 days later on Sep 15 2017 it was all over, the HUD-1 was signed and we were $410,000 richer (less $12,300 Buyer's Commissions, $6,150 Seller's Commission, $575.98 Title Fees, $415 Home Warranty, $20 Recording Fee, $100 Document Preparation Fee, $2,595 Title Insurance* and $307,764.53 Payoff of Mortgage).

* Title Insurance in Texas is paid by the Seller unless it is a new build when it is paid by the Buyer. We had bought our home as a new build, so we were double "blessed". Thank you, Texas!

Lessons Learned

1. If I had to do it all over again, I would have sold our house using a Flat Fee MLS Listing Service.

2. Home sellers have to put time and effort into finding the best agent. Defaulting to the agent you used to buy your house is irresponsible. Interviewing two agents is not enough.

- Home sellers also have to put in the time and effort to sell their home, hiring an agent is just the beginning of the hard work.

3. If you aren’t sold on going the Flat Fee MLS Listing Service route, then maybe the discount full-service broker is the way to go. 4. If you're sufficiently rich or busy then the full service 6% option may be the best.

5. Don't wait, as soon as the plumb, level, and aesthetically pleasing For Sale sign is planted, plant your St. Joseph's statue.

- If you live in a condo, plant the statue of St Joseph in a pot.

Endnotes: I wanted to provide some very specific details which while vaguely interesting did not contribute to the overall narrative. Perhaps just wait until the end to read.

¹ One of the most truthful aspects of the entire process is the name real estate agent, which is the problematic half of the Principle-Agent Problem. This problem exists in circumstances where agents are motivated to act in their own best interests, which are contrary to those of their principals (that would be you). When buying or selling your home you need to realize that your agent, no matter how much you like, connect or vibe with, is not necessarily looking out for your best interests. I think this will come as no surprise to most people, but as this real estate relationship goes on, many people start viewing their agents as friends and the principle-agent line is blurred. We instinctively know that the salesman selling us a used car is not to be completely trusted, but the nice lady who helped us buy our dream house (and recommended a good plumber) is completely different.

² We are 25 years into the Internet age. A period of time that has seen dramatic changes in historic pricing models: Commissions on the sale of stock that used to be in excess of 1% are now zero. Forty years ago every airline charged the same price and banks the same interest rate. It used to be that you needed a real estate agent to get access to the MLS, now the MLS is at the tip of your fingers. Technology has completely changed everything about the real estate experience except the cost.

- Next time an agent provides you a copy of an MLS listing, ask her why the layout is clunky, and cluttered, with the contents nearly unreadable. Like the 6% commission, the MLS layout remains unchanged by the era of the internet.

³ There are flood zones in this world, as documented by the U.S. Government. If you are buying a house in a city that floods (it happens more often than you think, especially with the advent of global warming), you should think long and hard about whether you want to buy a house in a flood zone and inform your agent accordingly. We only found out we were buying in a flood zone after we had started putting together our offer. - With the advent of climate change/global warming, I have my doubts as to the geographic accuracy of the flood zones or the statistical accuracy of their 30-year or 100-year periodicity.

- Years later while checking out real estate in a neighborhood in Boulder, CO, we asked our agent about flooding. She replied that she has lived in the neighborhood for many years and there hasn't been any flooding, but then casually added that during the 2013 Colorado floods, five feet of sewage backed up into her basement. She calmly described the entire experience as if she had wiped dog poop off her shoe, unpleasant, but just one of those things. One person's flood is another person's puddle.

⁴ Check the veracity of the comps. We bought the fourth house in a brand new six-house development located in The Greater Heights neighborhood of Houston (also, unfortunately, styled Shady Acres). The prior three houses, which were identical to ours, were sold over the previous three months. When our agent provided the comps, I realized that those three houses were not included. When I asked him why, after looking into it, he replied that since the builder of the development didn’t enter the final sales price in the MLS (which is quite common in Houston), the three houses didn’t appear in the comps. When he realized that I wasn’t impressed with his answer, he quickly volunteered to contact the builder and get copies of the HUD-1s for the three applicable houses. I mention this, not that this identical situation will happen to you, but that when you look at the comps for your house, you may want to review them very closely, discuss with your agent how they were generated, and ensure that they are the most relevant.

⁵ While I don’t doubt the necessity of hiring a home inspector, I’ve always doubted it’s efficacy. The common rule of thumb is to not use a home inspector recommended by your agent, but to get one on your own. The idea being that you don’t want your home inspector beholden to your agent, if he does too good of a job he may torpedo the deal and then not get recommended in the future. This makes good sense to me, but to be honest I don’t think most people (including me) follow it. On the other hand, the cynical New Yorker that I am thinks that most home inspectors don’t want to do too good of a job and torpedo the deal. If word gets out that they are too tough, then no agent will ever recommend them. Years ago I read an article in the Washington Post about a home inspector who did such comprehensive home inspections that no real estate agent would recommend him. It was so bad, that he had trouble making a living, though he did enjoy seeing real estate agents crap their pants when he showed up to the inspection.

- Another issue I have with home inspectors is their training and knowledge. I realize there are professional qualifications/certifications that help ensure that they are competent, but I must admit that I wasn't instilled with confidence when I found out my home inspector spent most of his working life in IT and had only then gone into the home inspection business. My limited experience with home inspection leads me to believe that this is quite common. You would like your home inspector to have a background in construction/general contracting, but it appears that very few do. - All the websites that offer advice on how to select a home inspector mention industry certification/licensing, insurance, years in the business, etc. but nothing about having experience in construction/general contracting.

The highlight of our backyard landscaping was three staggered vertical planters I constructed out of HardiePlank that had been discarded by the builder when our house was built. They actually turned out quite nice ("you know sometimes I amaze even myself"), though, like most projects, it took a little longer than anticipated. When my wife asked how much it all cost to make, I was proud to tell her that I did it all for about 40 bucks in materials. Though, I also then added that if you were to add in my labor, at minimum wage, the cost would be closer to $10,000.

The Real Estate in Question
The Kitchen of the Real Estate in Question

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La Pk
La Pk
Aug 04, 2020

Very cool article, Michael. I agree with your analysis, as you are solid in this department in general, and very accurate on this subject. All of this would be very helpful in Michigan, too, as it sounds like about the same situation. Real estate sales are so tightly controlled when done by the "professionals." I would like to sell independently if possible, if that day ever comes, which is a good bet it won't if I get to die here. Well, you know we are all thinking about that much more frequently now. On a happy note, I feel great! I hope you do, also, and that includes the missus.


Aug 04, 2020

Great article on real estate ! Always a pleasure reading, I love it!!

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