01 Jul Ep. 17: Geri Tockstein, Hermann London Office Manager
In this episode, Adam has on Hermann London office manger, Geri Tockstein, as his co-host. They talk about the emotional highs and lows of real estate, how flipping a house is going & whether all the renovations should be left to a contractor, stats about selling price and days on market for popular neighborhoods, what a good referral is, properly utilizing assistants and interns, a recent eviction, and the importance of specificity in contracts.
Email questions to Podcast @HermannLondon.com
:45-Adam introduces the Hermann London office manager and this episode’s co-host, Geri Tockstein
1:23-Dealing with the emotional highs and lows of real estate and saying goodbye to Trey Malicoat
3:25-Adam explains the numbers and details of a home he is in the process of flipping
6:10-Is it easier to pay a contractor to do all the work when flipping a home
9:16-Gerri gives some stats (avg. CDOM, price, etc.) on Kirkwood, Webster, Maplewood, and downtown
13:09-What is a good referral
15:31-Properly utilizing assistants and interns
17:37-The details of a recent eviction
22:31-When updating 1 unit in a multi-family unit, should the other tenants get the option to move in
23:57-The importance of realtors who really know their business and the details of their deals
25:09-2 examples where the sellers didn’t pay the full closing cost that was agreed upon
27:40-Dealing with an upset realtor who didn’t fully read or understand the contract
29:55-Setting expectations beforehand on the definition of clean
31:18-Deciding between being right and closing the deal
34:20-The importance of being clear and specific on all documents
35:01-The Hermann London office really enjoyed going to the Gateway Grizzlies game last week
Adam-Welcome everybody to podcast 17. Today is June 30th, 2015 all day long. We’re going to go through our podcast today. We have an agenda created. This is the St. Louis Realtor Podcast so we are going to talk about realtors and real estate stuff today. And we have a very special guest. My right hand. My everything. My most important, and I’m not talking about the Budweiser in my left hand, I’m talking about Geri Tockstein, The Hermann London Group’s most famous office manger here in the studio with us on the rooftop of beautiful Maplewood, Missouri. Hi, Geri. How are you today?
Geri-Hi, Adam. Thank you so much. Hello, everyone.
Adam-Thank you for being in the studio with us today, Geri, and we are looking forward to hearing any questions, comments, concerns, ideas, etc. from you and I know you are going to share some statistics as well.
Adam-Okay, great. Just a quick overview. I think that this is an interesting business. I think real-estate is an interesting business, and part of the reason is because there are so many highs and lows, and I think we have to celebrate the highs just as much as we woe the lows, I supposes, and that’s definitely something I have to work on. This week I had several closings, some big money closings. I had my wholesale deal that closed and made good money on that. I bought a house just today that I’m going to rehab. My company just listed a million dollar plus house today. But then of course, I paid a bunch of bills today and found out that a good friend of mine, who you guys know, Trey Malicoat, is moving away. He is going to go to Florida and follow his dreams. I’m excited for him but it is sad too. I think it is an interesting business where there are so many highs and lows. I understand why sometimes people take on a business partner. Dan Peskorse, a friend of ours, he says that he likes to have a business partner so there is someone on the other side when he is trying to high-five. This has happened to me a lot of times, Geri, where I have a big closing and I’m excited. I want to celebrate but who do I call? No one cares. Oh, my God I just sold a house and made good money. This is great. I’ll call my mom and she’s happy for me, but no one really cares. I think that’s why it’s neat to work on a team. That’s just my little commentary about where I’m at today.
I wanted to tell the listeners about a deal I have going on at Arthur Avenue in St. Louis. I need to get you over there, Geri. I want you to see that house.
Adam-I want you to smell that house because it smells bad. I think these people must have had a team of cats and they were all going to the bathroom in the house. Today we found a car door laying in the front yard for quite some time. I think least of all I’m going to increase the value of the neighborhood and bring up the impression people have of the street.
Geri-And bring up the value of everybody’s home on the block.
Adam-I like to go through the numbers with people. It’s no secret. It’s all public. I bought the house for $30,000. You know you did something good, unless they are yanking my chain, when you go to the title company and the closer says I got a really good deal on this one. That doesn’t happen all the time. It makes me feel good. Thank you, Laura. I bought it for $30,000 and I got a $900 realtor commission. I’ve been getting rehab estimates and it should be between $40,000 and $50,000.
Geri-What does that all include?
Adam-We’re going to redo the kitchen with cabinets, flooring, ceilings, lights, appliances, and counters. There is only one bathroom there. We’re going to gut it. I can still picture the look on the contractor’s face when he walked into the bathroom and he said oh my gosh.
Geri-What about the AC, furnace, windows, and the structure?
Adam-I think the structure is okay. We’re probably going to have to update the AC and HVAC. Just a few weeks ago it was 100 degrees and there were ice chunks as big as a softball on the line that goes from the condenser inside. That’s not good, right.
Geri-It will probably freeze the unit up on you.
Adam-Yeah, and they just kept it running. I was excited that they got out when they were supposed to. I had handyman Larry go over there today to mow the lawn and general cleanup. I was hoping to shock the system and make the house instantly better. The weeds were up to your knees.
Geri-That will make the neighbors happy.
Adam-I have to decide if I want to pay a flat fee to a contractor to do everything. I’ve never done one of these before. Do they choose everything or do I go to Home Depot with them?
Geri-Jeff Merkel is the general contractor on the jobs he does. I’m not sure how it would work as far as you. He has his team of plumbers, drywallers, flooring, kitchens, and baths. You may want to ask him about it. Part of it is the amount of time it would take to play the contractor role yourself or pay someone to do it.
Adam-You want me to pay someone so I’m not gone. It’s a big question. I was planning on using one big company to do the whole thing. I was talking to my brother yesterday and said I bought it for $30,000 and pay a contractor $40,000 to do it and it will be easier. I’m hoping to sell it for $120,000 or I could act as the contractor myself and spend $30,000. My attitude at the time was that it’s only $10,000, then I took it back. Why would I say that. I do know a lot of plumbers, electricians, and flooring guys from being in the business and being a property manager. We shall see but I’ll try to keep you guys in the loop. I want you to learn from my mistakes as we go through my first rehab property. I consider it my first because I’m planning on selling it. All the other properties I updated, I kept them as rentals.
Geri-Is this your first major renovation?
Adam-If I spend $50,000, it will be my first major. The house I live in now, we spent $30,000 on the update and I did a lot of that myself.
That’s enough about Arthur Avenue. Geri, you have prepared some statistics. What is this about?
Geri-This just tells you a little bit about the different areas in St. Louis and what we’ve got going on as far as number of listings, average listing price, days on the market, and this will give you a feel about what’s going on. Right now in south city there are 1,355 listings. CDOM average is 97 days.
Adam-That’s about the same as its always been.
Geri-Average price is $157,000. Let’s take a look at Kirkwood. Everybody loves Kirkwood. There are only 353 listings. CDOM averaging around 76. They are selling a little quicker. Average listing price is around $441,000.
Adam-Kirkwood and Webster are so popular.
Geri-Webster has 279 listings. 82 average days on the market. The average listing price is $305,000. It’s a little bit less than Kirkwood.
Adam-I guess Kirkwood has a couple major million dollar homes. How about Maplewood?
Geri-Maplewood/Richmond Heights has 87 listings right now. CDOM average is 77 so we are under that 3 month period. Average listing price is $211,000.
Adam-There are a lot more homes in Kirkwood and Webster than Maplewood/Richmond Heights. That’s interesting because homes in Kirkwood and Webster homes sell so quick so it’s harder to find a home. Any others you’d like to share?
Geri-I’m always curious about the loft community downtown. Right now we have 176 listings. Average CDOM is 129 so it takes a little bit longer to sell. The average listing price is $180,00.
Adam-Average is always interesting. I guess median would be more appropriate because the average in Kirkwood there may be some that sell in three days but there is one guy with on the train tracks with a flooding basement and in need of a rehab but is asking $500,000 and he has been on the market 3 years. Thanks, Geri.
I wanted to talk a little about what is a good referral. We have people that refer us a lot of business and I think that people don’t know when to refer or what we want. I’ve heard people say they didn’t know if we’d want to deal with a buyer that only wants a $100,000 house or that they live all the way out in Lake St. Louis. It’s kind of funny, but a good referral to me is anyone that wants to buy or sell real-estate which includes residential and commercial or anyone that wants to lease property as well since we do property management. Like I mentioned earlier, I bought a house for $30,000 and listed one for a million. We handle everything in between. The service is the same great service no matter where it is located.
Geri-Absolutely, Adam. It is important to note that we have agents all over the area. Anywhere from St. Peters to Wentzville and Imperial. We’ve got every area covered and we have an agent that’s familiar with those areas.
Adam-I guess our secret on how we make properties sell faster is done mainly from the office. It’s the things that you do on the checklist and the people we hire to do the photos. Any comments on what a good referral is to you? A million dollar cash buyer that already found the house?
Geri-Sure. We will take those everyday.
Adam-Someone called me today asking if their assistant who already found the house he wants could call me. I think they are being polite and professional. Yes, of course. Absolutely. Have him call me. I want to work with him. We love referrals.
I was going to vent a little. I wanted to talk about being a business owner and having so much to stay on top of. We are hiring an assistant for Geri.
Geri-She starts tomorrow.
Adam-That’s because there is so much to do. One of the things that stresses me out because I love it is staying on top of our website and digital media strategies. There is so much to do with Facebook, the e-newsletter, the website, Google+, and the property search. I’m excited that we hired a new intern. Jesse is here from University of Michigan and he wanted to be a digital media strategist so we looked up a bunch of jobs that are available and put him to work. People that are hiring digital media strategists are looking for certain job experience so we customized a program to give him that experience. Now he will be able to walk into his interview after this internship and he’ll be able to say he installed Google tag manager into Hermann London’s website and I used the MOZ software and we increased their rankings by ten percent. He will be able to speak with an education. It will help him and us and our clients will get more exposure for their house. You gotta get the Google tag manager to track every button and not just the pages.
Let’s talk about Rosa a little bit, Geri.
Geri-Okay. What’s going on with Rosa?
Adam-We evicted the tenant. Did that put some pressure on you?
Geri-No. It’s just a shame that it comes down to that sometimes.
Adam-Rosa is a 4-family building that I own with a partner. We had to evict a tenant. She hadn’t paid her rent for 7 months and I was trying to make deals with her but it didn’t work out. It’s my fault that it took that long because I didn’t respond to the attorney quicker. When it came time for the eviction, it was underwhelming. I was nervous with a stomach ache. I thought there was going to be screaming, crying, and yelling. All I knew is that the sheriff and I were supposed to be there at 3 o’clock, I had to change the locks, and the attorney told us we had to move all her stuff. I showed up a couple minutes early and the sheriff was there and him and the movers meant business. I told them to hold up since it was my first time doing this. I wanted to know if I had to throw all her stuff away. The sheriff didn’t want to talk to me at all. He just wanted to know if I was going to change the locks. The movers went in and yelled to make sure no one was there. The lady wasn’t in there and most of her stuff was gone.
Geri-She had taken most of her stuff?
Adam-She took most of her stuff but while I was changing the locks she showed up and I let her take a couple more car loads so the movers left. I talked to another sheriff and apparently that is those movers job and that’s all they do all day. My neighbor told me that when he evicted someone 20 years ago they actually had convicts do all the moving.
Geri-When my sister had to evict a tenant a good number of years ago, the sheriff opened the door and they had a crew haul everything out to the alley and people were coming by and going through it. They were taking everything.
Adam-It’s sad and kind of messed up but I guess that’s the business. They don’t do that anymore.
Geri-They are just there to make sure the locks are changed?
Adam-Yes, and they didn’t seem to care if I left the tenants stuff in there, sold it, or if I moved in and started using her desk. My attorney said I had to throw it all away so we rented a U-Haul and packed everything up and took it to Goodwill. The next day we came back and filled a couple truck fulls full of more junk and took it to the city dump.
Geri-So there was quite a bit left then?
Adam-It was the most extensive collection of shoes and Christmas decorations I’ve ever seen. She actually had 2 truck fulls and 3 or 4 car fulls of stuff she already got out of there. She may have been a hoarder. Today’s property wasn’t an eviction so I’m allowed to keep whatever. I used to get excited about going to a vacant property but there was nothing good at the the property today. There were beat up sofas, smoked cigars, and trash. They had a big box of broken BIC lighters. I’m not sure if that is a drug thing. I told Larry that if he wants anything, get it out of here. Now she is out of there and we’ve done the floors. Brad Evans does a great job with hardwood floors. We’ve cleaned and cleaned. There will be tile where there is linoleum and there will be new baseboards. My question is, do we allow the current tenants to move in because they like the layout the best. I’m worried about allowing one of the current tenants to move into this new unit because they may not do a good job cleaning the old one. A lot of times the move outs can be uncomfortable when we have to use their security deposit.
Geri-I know the tenant you are speaking of and I think they’ve done a nice job taking care of the property and the yard and it may be worth the consideration to give them the opportunity to move in there but pre-empt it with providing that their unit is taken care of.
Adam-That’s a good point. The rent is going to be a little bit higher.
Last off I want to talk directly to realtors or to anyone who is using one. Make sure you use a realtor that knows their business. When we have a new realtor join our company we like to make sure they are working closely with either me or another experienced realtor. When I see problems is when an agent has been in the business a long time but has gone part time to focus on other stuff or an agent that goes rogue. There have been several examples in the past week where an agent feels the pressure or another agent is trying to push them around a little bit. If the agent knew the contract better, knew the details, and checking all the little things, I think they would not have these situations. Here are some examples. There have have been 2 where the seller agreed to pay a certain amount for closing costs. The one with me where the seller agreed to pay $6,000 towards the buyer’s closing costs. The lenders right now are all busy so we didn’t get the final numbers until we were at the closing table so I didn’t have a chance to look over the HUD. We saw the closing costs covered by the sellers was only $5,100. A less experienced agent would have sat there and smiled but I said this will not stand. The title company had credited the buyer for all their normal closing costs but in this case the buyer pre-paid for their inspections. My buyer was awesome because he reached into his little folder and had all of his receipts so we were able to get pretty close to $6,000. He pre-paid for the building, termite, lateral line, and radon.
We had an example similar that didn’t go as well. An agent called me and said they didn’t think they used all of their closing cost money and asked if she should call the other agent and try to get it back. I said she could try but apparently this other agent had been mean the whole time. You have to know what’s going on and an agent that is more part time should keep the company more involved in their deals so this won’t happen. There are a lot of realtors that will try to push you around.
There is an example I’d like to bring up if you don’t mind, Geri. This was the weirdest thing and I don’t really understand the realtor’s logic. We had a listing that was closing and the buyer’s agent was going over to the property the day before closing for the final walk through. The seller hired a cleaning company that was there at the final walk through and the buyer’s agent called Geri screaming.
Geri-Correct. They were saying that the place was filthy and couldn’t believe that anyone would leave a place in this condition with dirty floors, carpets, and dust everywhere. I was taken aback because I knew the cleaning crew was there and were hired to do a deep clean of the home.
Adam-Was she demanding anything?
Geri-She was demanding it be cleaned even though the cleaning crew was there. She was really fired up and the crazy thing about it was that nowhere in the contract did it say anything about the property being professionally clean. The seller just did it to be nice and as a common courtesy.
Adam-I actually see this a lot and this happens in generally in life where if someone is embarrassed about something they will strike out at others. I don’t know if this agent knew she had done a bad job of representing her client and forgot to put the clean part in the contract or if in the past all of her properties have been cleaned, but in my opinion, they really embarrass themselves when they try to look tough or prove to their clients that they are representing them. She should have set the expectations for the buyer in the beginning. Nowhere in the contract does it say that the seller has to clean the property. I’ve made contracts that say it must be broom clean but I tell them, don’t expect anything because clean to me is different from me to you. I don’t care how clean it is, you are still going to wipe your bleach right over my bleach. I think she had done a bad job setting expectations. I’m glad you knew your business well enough to not say, “Oh my gosh. We’ll pay for someone to go out there.”, or call our seller and start screaming at her. I think you were being nice to the lady and trying to calm her down. When I came in I asked if you told her she should have put it in the contract but we would never say that to another realtor because we don’t like to burn bridges even though we may be thinking it.
The other example was that the buyer got their inspections and there were some broken gutters on the front and the back and it was labeled on the inspection report. The buyer asked for them all to be fixed and we rejected that offer and counter offered by saying no, we will only fix the back one and the buyer agreed. During the final walk through the buyer sees the front gutter still broken and threatens to not close until it is fixed. Their agent called our agent and threatened to not close. It was specifically written out that it was just the back one. Their agent didn’t understand how the inspection notice works. The first section will ask if we will fix it. The second section says yes or no or what we will actually do and somehow the buyer’s agent thought we were still going to do everything and it caused this big problem. I’m glad that our agent called me and I was able to talk them through it but sometimes there is right, wrong, and what’s going to work. In this case, our seller was closing on this house and buying another and that buyer was closing on the house to buy another, so we are talking about a $150 gutter replacement delaying the closing, causing a lawsuit, and messing up this chain of closings. My advice to our agent was to either play hard ball, play easy, or come to an agreement that makes sense. This is a problem that shouldn’t have happened. You can’t fix somebody not knowing the rules. The best thing we can do is know the rules and how the contract works. I think the only thing the agent can do is be even more clear the next time and I think she was really clear with her amendments.
Geri-It always comes down to the same thing though, be as specific as you possibly can on any of the documents.
Adam-Absolutely. The contract that we wrote the other day that we are negotiating, we had to say fridge in the kitchen stays, side by side fridge in the basement is not included, and dryer in basement is not included. It avoids problems.
That’s all my content I have for today, Geri. Do you have any updates?
Geri-This past Friday night we went to the ballpark and watched The Gateway Grizzlies. It was a nice evening and the weather held off
Adam-I would encourage everyone to go over there especially a sports fan because you are sitting close and parking is free.
Geri-It reminds me of the Cardinal’s spring training games in Florida.
Adam-The next night a couple of our agents did stand up at the West End Grill.
Happy fourth of July, everybody. As always, check out HermannLondon.com for all the latest podcast, links, pictures, and information that we reference today. We always want more questions. Send them to Podcast@HermannLondon.com and maybe we will make another fun video. Check out mad producer Joe Vosevich’s videos. He’s made a Maplewood and Lindenwood Park video. That’s all for today. Take care.
Geri-Thanks, everyone. Bye bye.