The Hidden Reason This Dream Home Won't Sell (Even at the Right Price)

Drew Hendricks00:35

Welcome to the latest episode of We Fixed Real Estate. Today we’ve got three real important topics to go by you. We’re gonna give a deep dive into a particular property and answer the question, when is a house too big?

Fred Glick00:47

so I have this listing. It is gorgeous. It’s to give you the address, and we’ll put up all the Zillow things so you can see it and see the pictures of it and how pretty it is. It’s at 18471 Corte Zapala in Morgan Hill, California. Now, if you don’t know where Morgan Hill is, that’s one of the issues. It’s about, let’s say 12 miles-ish south of San Jose. So with no traffic, it takes about 55 minutes to get to the San Francisco airport. Kind of give you an idea of how far and where, but look at it. I mean, it’s just absolutely gorgeous. It was Toll Brothers. This is the fourth phase.

The last phase, so they worked out all the kinks, so everything works really well. And as you can see, it’s very, very spacious. 6,089 square feet. Yeah, and funny, that’s

Drew Hendricks01:58

Holy moly.

Fred Glick02:04

The problem. It’s 6,089 square feet.

Which is five bedrooms, five and a half baths. So every bedroom has a bathroom. There is a first floor suite. so if you have elderly people, parents, grandparents who want to live on the first floor, it works. and then upstairs, you see one side of it is the entire master suite, and the other side is three bedrooms, and obviously the first bedroom on the first floor totals five the bedroom the main bedroom is just gigantic it’s actually maybe too big for some people and that’s the interesting thing I get they love the people love the house and it’s like but it’s too big and you know my clients thought this would be great you see you see look at the bottom picture yeah scroll up here no come on

Drew Hendricks02:57

Yeah.

Trying to figure out how to get to it.

Fred Glick03:08

Nope, that’s there we go. So you see, here’s the primary bedroom. I can’t whoops. yeah, floor two.

Drew Hendricks03:12

Whoops. Is it floor two?

Fred Glick03:19

Here it is. So

Drew Hendricks03:21

Twenty two feet by thirty one feet.

Fred Glick03:24

Yeah, you do the math. That’s pretty big. and it connects through to the primary bathroom, and then the gigantic closet. As you see, the primary closet. Okay. So you have all this open area and it’s that you probably saw in the pictures earlier, but the bedroom’s pretty big. Once you put a king-size bed in there, it’s still pretty big. So you have to put a

Drew Hendricks03:51

The primary causes is twenty two feet by eleven.

Fred Glick03:55

A shoe lovers dream yes holy moly you can put you know your summer winter spring and fall collection in there and it is single barred but if you double barred this thing it would be even crazier so the house is is big

Drew Hendricks03:58

Holy moly. This is a Sex in the City closet. the T V show, Sex in the City with the Fashion Carrie.

Fred Glick04:15

I’m sorry?

Yes, yes. It’s bigger than Carrie’s closet for sure. So yeah, so it’s a big house. And I mean, unfortunately, that’s the problem that some people have. They just have told me, you know, it’s kind of big. so you know, it’s priced properly.

Drew Hendricks04:26

Wow.

Fred Glick04:48

The other problem is Morgan Hill. So, as I was saying, let me go back to that. It’s about 12 miles south of San Jose. Which people have in their minds that the commute to, let’s say, NVIDIA or Apple is gonna be forever and take you forever. Yeah, maybe it depends on your version of forever.

You know, if you can afford this house, why not? You know, it’s too bad there’s no Waymo’s running there. Because if there was Waymo’s running there, you could take a Waymo up and back and work in the car. And it gives you and save yourself four million dollars from having to buy something in Cupertino that’s equivalent. So even even going the other way into Palo Alto, I mean this would be

Drew Hendricks05:25

Yeah.

Fred Glick05:47

Some ridiculous priced house. And it’s a great house. It’s actually still under warranty until August of this year. sellers haven’t had any problems, no reasons to bring back Toll Brothers to come and fix anything. It just it just works. So it’s an interesting house.

It’s an interesting dilemma that it may be too big. The competition is about 4,500 square foot houses.

Lower ceilings, you know, kind of the older versions of these from one, two, and three, phases one, two, and three, and where they didn’t figure things out. So interesting house. Obviously, seller would love to sell. And you know, tell us what you think. is is there a house that’s just too big? you know, the buyer bought it thinking, hey, this is great, I have all this space.

Drew Hendricks06:22

Mm-hmm.

Fred Glick06:44

Now it’s kinda coming back to hurt a little bit ’cause it narrows how many people are gonna wanna buy.

Drew Hendricks06:50

Mm-hmm.

Fred Glick06:52

But if you got three teenagers, you know, probably have to put in an extra refrigerator in the garage. But other than that, you know, there’s plenty of room for them, plenty of room for their stuff. If you like furniture, you can put furniture all over the place.

Sellers they’re great and you know, we’ll just keep plugging away. This is the kind of listing where you just have to put it up. We’re having a Zillow showcase that we offer to all of our sellers, by the way. it’s it’s up and coming like crazy.

Drew Hendricks07:24

And it’s gonna Morgan Hill is a great area. I mean it’s you have to think of you have to think

Fred Glick07:28

So here’s the thing.

Drew Hendricks07:28

You have to think of the future.

Right now it seems like it’s on the outskirts, but twenty years from now, it’s gonna be right in the center.

Fred Glick07:33

It really isn’t.

There’s so much development. There’s a downtown that’s got great stores and restaurants and the train comes there. During the week it goes every other train that would normally go from San Jose to San Francisco. They’re supposedly running them on the weekends, but don’t quote me on that. I’ve I’ve just heard that that’s happening.

So it’s not that bad for public transportation wise to get up and back. And things are being built. You got, you know, you have everything. Your Home Depots, your your In and Outs, your Starbucks, all the generic stuff that you would possibly need, supermarkets. It it’s all there. And obviously it’s stuff can get delivered. So it’s quieter, schools are getting better.

Drew Hendricks08:13

Mm-hmm.

Fred Glick08:29

Because there’s smarter people moving in, pushing the teachers to be better. So in a few years it’s gonna be crazy down there. It’s it’s just the fact that you can’t build a lot of good, solid single-family houses in the million and a half, couple million dollar range in locations that are close to everybody’s work in the peninsula. It’s it’s just a fact. There’s no physical land to do it.

So, or and of course the cost and the time. you know, hopefully we’ll see development around train stations, but that’s condos. That’s not going to be singles. Singles are still gonna have to go somewhere. And between San Jose and Morgan Hill, the space in between there, there’s little pockets that they were able to build on, but a lot of it is federally owned or mountainous, so they can’t. So.

This is the next big thing for residential real estate in Silicon Valley.

Drew Hendricks09:34

Very, very interesting. Now t transitioning from new homes, new construction to old construction. There’s the next new thing for older homes that may need new sewers.

Fred Glick09:45

So my big thing is I tell people when they buy a house or when we list a house, we get a sewer video. It’s something that most agents don’t even think about, don’t even know. And the idea is that nobody knows what’s going on inside those sewer lines. It’s unless you have cameras stationed in there,which nobody does.

So you run a line. You know, you kinda stick it down and run this cord that’s metal, a scope, and then they shoot it down there and you can actually check for some of these on YouTube if you’re really excited. But if it’s a problem, normally they gotta dig up the street, tear out all the bad whatever it was built with, replace it with, you know, big pipes and all that. 

Drew Hendricks10:36

Mm-hmm.

Fred Glick10:41

Not anymore, as they would say. So these guys, as companies, developed this method of putting in it’s kind of a liner that’s made with a type of plastic that also seals itself to the existing pipe so that you don’t have to rebuild it like you did the other pipes. And they kind of stick it down there. Like think of a giant balloon that eventually goes all the way down and pops at the end and then it sticks to the pipes. It’s something new, something great, and it’s gonna last a long time too.

Drew Hendricks11:18

I’m not sure if that’s

It does, and I’m not sure if I’m using the older technology, but I did the same I did that to our house. So our house is an older house, 1960, with clay pipes. And at least the what the service that I did, they it’s almost like a it’s a Kevlar epoxy sock that they shove in, and then when they pull it back out, it folds in on itself and then hardens in the shape of a pipe. So it lines it with about a half an inch.

Fred Glick11:41

Mm-hmm.

That’s pretty much what this thing is doing. Yeah.

Drew Hendricks11:50

And the benefit of that Kevlar epoxy is it’s super slick and stuff doesn’t stick to it versus clay, steel that’s rusted. So you tend to have a nice flow.

Fred Glick11:57

Right.

Exactly. If you have a tree in front of your house that’s old, you should do a sewer video just to check on it. Because the roots have gotten in even through steel, steel deteriorates, rusts, all that kind of stuff. So check your sewers, people. If if you got

Drew Hendricks12:19

Absolutely. That’s exactly what happened to ours right after we bought our house and I have it lined, so I can recommend at least an older version of it.

Fred Glick12:22

Of course. Okay, so so if you’re buying a house, get it done. Get it as a contingency. Don’t just do home inspection. Make sure you do termites or if you’re in like Seattle getting mold in case there’s something going on. And but everywhere you should be getting sewer.

Drew Hendricks12:29

Yeah, it’s perfect.

Scope the sewer.

Fred Glick12:45

It’s a real crock.

Drew Hendricks12:48

How old would you estimate the house should be to do a sewer check? Like if the house is two years old, there’s no point in doing it.

Fred Glick12:53

Nah, no. I mean the sewer line should be good unless unless there’s that again, that tree that’s old that’s been there and maybe has run its way into it. Especially plastic that that soon. if you have backups obviously.

Drew Hendricks13:11

So say you do have say you do have the contingency. You you’re like, we want to scope this thing, we wanna see the sewer. Is it then do you counter saying, hey, the it’s estimated twelve thousand dollars to reline this sewer? I I wanna take that off the

Fred Glick13:26

I have a better story for you. We represented a buyer in Burian. Hope I’m pronouncing that right. It’s just out of Seattle, Washington. They bought a house that was right on the water that was at the bottom of the development. So you had to like come up from the top, drive down a couple of driveways, and you finally would get to the bottom. You get to that house. We did a sewer scope.

Big problems with that sewer. The pro and the other on top of this problem was the fact that the sewage had to be pumped up to get to the actual sewer line because they were below where the main line was. So the problem was they had to dig everything up, put a new thing in, put new pumps in. $125,000 later that the seller paid, then we closed.

Drew Hendricks14:11

Jeez.

Fred Glick14:25

So if you get that sewer done, you’re more likely to, you know, have the seller pay for it then as opposed to waiting till after you buy it. And then it’s like, it’s ugly. And and and not covered by homeowners insurance. Or I should say, and not covered by a warranty. So be careful out there, kids. Check your sewers.

Drew Hendricks14:36

You’re stuck with the hundred twenty five thousand dollar bill.

I have well, if we’re doing sewer stories, I can tell you the first home I bought and I was in my late twenties, it was in El Granada, California, just north of Half Moon Bay. And the house we bought was at the bottom of a hill. and that if you’ve ever seen El Granada, it goes up a canyon. So there’s a thousand there’s you know, there’s like four hundred homes above ours. Three months after we moved in, woke up and I heard their dogs were splashing down below.

Fred Glick15:08

Mm.

Ha ha ha.

Drew Hendricks15:18

Our house was the low point on the main sewer line. There was a backup below our house. The entire upward houses all was flowing through our lower toilet. There was a stream about three feet tall coming out of our lower toilet. The entire thing was flooded with sewage. It t it took us six months to mitigate that. Cause it didn’t have a backflow prevention device in front of our sewer line.

Fred Glick15:40

Yeah.

I assume you disclosed that to the when you sold it, but it had already been fixed.

Drew Hendricks15:51

Well, that was about eight we had. I had that about five years from then. and it already been fixed. I don’t know. This was twenty, thirty years ago, so I don’t remember.

Fred Glick16:01

Okay. Always disclose it kids. You know, repair it, disclose it, show the receipts. Also important stuff when you sell go to sell. Anyway, yeah, that’s that’s the that’s the sewer update.

Drew Hendricks16:16

On to on

on to cleaner topics. Let’s talk about AI and home pricing.

Fred Glick16:21

God, we love AI. It’s helping us so much. It’s helping everybody. I tell my buyers: if you’re gonna go look at a disclosure package with all the inspections and all that, besides the prompt of saying I’m scared first-time buyer, and tell me what the union prices are to fix it, so it’ll give you the highest price. You ‘ve been using ChatGPT specifically for that.

Because everybody’s been using it since Chat GPT came out. So it is flooded with data and it probably has the best data. Now, who knows? But it’s a best guess kind of scenario. But the other problem is you’re a seller and you’re a buyer looking at the same property, and you go into AI.

Drew Hendricks16:59

Mm-hmm.

Fred Glick17:18

And you start saying, What’s my house worth? And you know, you there’s more to it than that. But it knows you’re the seller, and it seems like it’s trying to tell you how good it is. Whereas if you’re a buyer,

Drew Hendricks17:30

Mm-hmm.

Fred Glick17:32

It’s trying to tell you how bad it is, so you can negotiate. So, you know, what I like to do with these type of things is really pin it down and say, look.

Drew Hendricks17:35

Interesting.

Fred Glick17:45

Give me every single house that’s similar within a mile, close within the last 30 days, and give me the differentiations between the two. Go at it like you are an appraiser. And that’s a key thing. If you’ve ever seen an appraiser, you see it’s like 40 pages. Really, it’s about four pages of data. and there are these adjustments that there’s one box that has the house.

That’s being appraised, and then three other comps, or we can go to another page for three more, up to three more. And it says, okay, inferior. So subtract $25,000 compared to this house. there’s actual data points that the appraisers use all the time. You want the AI to be able to do that, as opposed to just saying, hey, it’s worth, you know, five hundred thousand dollars, and then the for the seller, and it’s and the buyer’s thing says it’s worth $450, and then you guys are gonna fight it out. so you’ve got to be really, really intense and really careful and pretend ask ask it to be an appraiser, not just give you a value, but you want to appraise it. And I think you’re gonna get better information from there. Tell it to take away any bias for the fact that you’re the seller or the buyer. You want the bare bones activity.

Drew Hendricks19:01

Yeah.

Fred Glick19:09

Of just giving me what it’s going to really be worth in the marketplace. And the fact that it will always appraise. The reason being that the appraisers know the sale price before they do the appraisal.

Which, if they didn’t have that, the real estate world would collapse. I mean, values will go up or down, and but probably down if they want to be conservative. It’s an opinion of value in appraisal. It’s not an exact science. So there are things they make called a time adjustment. So if things are going up and up and up and up and up every week.

Prices get higher, then the appraisers account for that. The demand is high, blah blah blah. And the time factor, you know, a month after this, because there’s still activity, you know, people are willing to pay more and there’s higher demand. Supply and demand, pretty much, pretty much the push factor for that. So be real careful using AI for pricing a house based on what you want to offer.

Drew Hendricks20:33

Mm-hmm.

Fred Glick20:34

Is really the bottom line.

Drew Hendricks20:38

No, that makes sense. I mean, and especially I’ve seen AI getting particularly opinionated, knowing my past chats and starting to definitely develop a bias on what it thinks I wanna hear.

Fred Glick20:52

Yeah, yeah, exactly. That’s one of the points. So you really have to prompt it well. You know, be neutral, but you know, I don’t want to piss off the seller, but I mean, what should I offer? And it’s great when you have houses that already have inspections and disclosures and all that, you just pop it all in to help make the decision along with you can just put in the links from Redfin or Zillow. That’s where it’ll go and take a look at everything.

Drew Hendricks21:18

Uh-huh.

Fred Glick21:22

And then give it good criteria for following comparables and ask it to value based on how an appraiser would do it. So these are crapshoots, guys. It’s not an exact science. But having said that, so listings, let’s talk about those a little bit.

When you can have someone come to your house.

To list the property. And this is June 18th. Okay. And you know you’re not gonna list the house until say the middle of September. You gotta get work done. Plus, you never want to list in August. August is the kiss of death, unless you absolutely have to. Do not list in August. so this person may come in with this beautiful brochure and a CMA.

Of what your house is worth and why it’s worth this. And they’ll give you comparables. Well, those comparables are great and all that. All it’s telling you is what they think your house is gonna be worth that day. You’re not listing it for two more months. So the problem is we don’t know what the comparable sales are going to be that have closed, and more importantly.

We don’t know what the comparable listed properties are going to be. I judge what the price a house based on pretending I’m a buyer, looking at the market, seeing all the houses, and saying, that one makes sense. It’s priced priced right, it looks nice, that’s better than house B and C. Because if I price it at some high number and the markets come down.

You’re gonna look like an idiot and the house is just gonna sit there. Or if your price is too low, they’re saying,

What’s wrong with it?

So the whole idea is you can’t really price a house until you’re ready to put it on the market. And that’s the most important time to look at a CMA. Right now, doesn’t matter. It’s like here’s my best example of this. You want to buy a stock, but you’re not gonna have the money for three months. You’re waiting for something, you know, to come in, an inheritance.

So you say, all right, I’m gonna do my investigation into the XYZ stock. Wow, I’m gonna I’m gonna buy that. And then two months later you have the money and they’ve declared bankruptcy. So what what good is everything you’ve talked about two months ago? Same thing with real estate values. They move. They may not move, they may not move, but the fact is they can move and you can’t price it based on today compared to two months later.

I mean when I go into a listing, I have no idea what I’m seeing. But I go to a house first. Once I’m in the house, then I can figure things out. The fancy brochures don’t mean anything. if an agent says to you, our company websites gets a million hits a day, yeah. So what? You’re trying to sell one house, one focused house. The idea you need to use a big company is silly.

The fact that you need to use a local agent is silly. We are marketing your house. We are making it look beautiful. We are trying to bring people in so they will give us a contract. They don’t care who the listing agent is when it comes to writing a contract. It has nothing to do with it. The listing agent is not there to be the buyer agent. They’re there to represent you and only you.

Drew Hendricks24:50

Mm-hmm.

Fred Glick25:07

Dual agency, it’s like having your attorney prosecute and defend you.

It’s ridiculous. It’s a yes, in a beautiful world where there’s a perfect person representing both sides and everybody’s in agreement and it’s simple, okay, fine. It happens, but it is the exception rather than the rule. To give you an example, I had a person call me up the other day who was

Totally unsophisticated with everything, but she listed her house for one year with an agent, and the agents sold the pro got the property under contract for a price with his buyer, so he’s got both sides of the transaction, and somebody had told her that.

Why are you selling for that low? It’s like $300,000 less than what the place is worth. She got a hold of me. We’re getting a hold of lawyers. But I mean, those creeps are out there. I mean, it’s absolutely insane what some of these people will do, especially when they’re doing private listing. So nobody else gets to know about it. So they can do dual agency and then sell it to a flipper who’s going to give him the listing back. So he’s making three.

Drew Hendricks26:21

Mm-hmm.

Yeah. Triple hit. Well that’s a hat trick.

Fred Glick26:30

Commissions. Three commissions on one house.

There is there is the real estate hat trick. But a bad hat I I wait, I really hate using hat trick for that. Don’t disgrace hockey. And by the way, I was right, Carolina won. So I predict. Glick predicts. Got it right.

Drew Hendricks26:42

Okay, sorry, sorry.

Quick for Dex

Fred Glick26:52

So anyway, I could

I could keep rolling on that. But that’s kinda unfortunately the latest in the real estate business. It’s a l it’s technically legal, but seriously, dudes it’s just disgusting.

I got nothing else. We’re thirty minutes late. That’s enough if you’re still listening.

Drew Hendricks27:15

Thirty minutes in, three important

topics. We went old. We went new, we went old, we went new again. And then we went back to real estate transparency and ethical real estate, taking the emotions out of the equation.

Fred Glick27:30

For sure.

Drew Hendricks27:32

Well, this has been the latest episode of We Fixed Real Estate.