A month ago — and halfway through his two-year lease — the tenant who rents my house in Colorado told me he’d bought a house.
“But wait! You have a house, my house, for another year!”
“I didn’t say I wasn’t going to pay rent,” he said dialing my fret factor down from skyrocket -high to merely ceiling high. “I said I bought a house.”
“But what about…” and I hated myself for sounding so needy and dependant but the word flew out … “us?”
“I’ve thought about that,” he said.
And the negotiations began.
If I’d let him out of his lease by the date he wanted to move into his new house, he would pay me a “convenience” fee. Meanwhile, I could find a new tenant or buyer. If I didn’t find either, he’d still pay rent until I did or until lease was up, whichever came first. But the house would sit empty.
I considered my options: Cry. Scream. Pretend this wasn’t happening. Get professional help. I tried all of them.
Eventually, I shared my saga with a real estate agent who’s had success selling in my neighborhood: “He wants to be relieved of his liability,” I told her. “I want a warm body in the house that will cover the costs.”
When I was done ranting, she had just one question: “Are you going to write about this?” She sounded worried.
Is anyone else’s life this complicated?
As we talked further about how to best attract a buyer or a tenant she suggested I hire someone else.
“You’re firing me?” I asked.
“No, in addition to me.”
“I do sales. You should also have a leasing agent. I’ll send you some names.”
I flashed back to the time a few years ago when I was almost someone. I was so close to being someone, in fact, that I managed to wind up with three agents — a literary agent, a speaking agent, a talent agent. This wasn’t my idea.
I always knew I was a handful, but having three agents to manage my so-called act was just hilarious. You and I both know I’m just a writer with a neurotic home design obsession and endless other problems.
But that experience taught me that whether marketing talent (in the loosest sense) or houses, agents specialize.
As of this month I have two more agents — one to sell my home, one to lease it.
“Was this really necessary,” I asked Alan Smith, a broker/owner for RE/MAX in Littleton, who handles home sales, not rentals. “If I had a client who wanted to rent or sell, I’d do just what your sales broker did. I don’t know many agents who do both, and I’d be very cautious of any who said he did.”
That said, today, homeowners who want to roll their real estate have good reason to enlist both.
While the sales market is improving, Smith hasn’t seen the rental market this hot in his 29 years in real estate.
“Across the country, demand for rentals is very high and inventory is low,” Smith said. “Homeowners can rent out almost any home quickly and for top dollar. The average home will rent in a week.”
If you’re feeling stuck with your house here are some options and tips to get unstuck:
Pick the right agents. I chose both our sales and leasing agents based on their track records of closing deals in my neighborhood in my house’s price range and on their willingness to collaborate. Not all agents want to work with a competing interest.
Start with what you want in mind. You will get off on the right foot if you begin the conversation with, “I need you to help me do what’s best for me.” Agents, like most humans, except maybe Nelson Mandela, typically think in terms of what’s best for them. Ideally, your goals are aligned but not always. Selling your house at any price is what most agents strive for. Getting the best price quickly is more important to sellers. My goal is to fill the house with someone who will cover the carrying costs and not leave the place vacant. I’d prefer a buyer, but a renter will do.
Be fair to both sides. Brokers make a lot more money when they sell a house (6 percent split) than when they lease it (typically one month’s rent), but selling usually takes longer. Because our sales broker was going to invest time and money marketing the house and creating a video tour, we agreed to pay her a fee if the house leased before she could sell it. I also negotiated a reduced rate to the leasing agent because he can use the sales agent’s photos and marketing materials, which save him time and money.
Think outside the walls. In between the options of selling and leasing are other options. Lease options give tenants the first right to buy the property; lease purchases allow tenants to lease the house and ultimately buy it at a pre-agreed price. Smith warns, however, that while he’s in favor of being creative, he’s not a huge fan of these options, because “they rarely work out.” Another option is to rent the house to a tenant who will agree to let you keep it on the market for sale, and show it to prospective buyers – all for a discount on the rent in exchange.
Syndicated columnist and speaker Marni Jameson is the author of “House of Havoc” and “The House Always Wins” (Da Capo Press). Contact her through marnijameson.com.