Case Studies – Success of Clients
Here you will find a few case studies where Douglas Newby shares his approach to representing clients. Some of these case studies show the steps taken and holistic approach of selling properties that have been honed and refined from years of his experience. You will also see a glimpse of his personality, insights, and his on-the-spot observations or comments that move a negotiation along in the right direction. The nuance of how Douglas Newby negotiates on behalf of his clients is also based on years of experience and his innate instinct and intuition. He is always looking several steps ahead and is a master at anticipating the desires and expectations of all the people involved in a transaction. And, most important, these case studies show that while the properties he sells are often for a price much higher than the appraised value and the value the real estate community originally anticipated, the buyers always come out well because of the quality of properties Douglas Newby represents. These case studies reflect that Douglas Newby strives for everyone to benefit from the transactions he is involved with, especially his clients.
Case Study – Sunnybrook Property
An interesting case study concerns an approximately 1/3 of an acre lot in Sunnybrook Estates. A client had called me and said a neighbor had called him and asked if he and his wife would be willing to sell a 1/3 of an acre property behind the creek at his house on 2-1/2 acres that was next to the prospective buyer’s home. The seller asked me to represent him on the sale of this property. The seller instructed me that he was giving me a sell order. In other words, he wanted me to sell the property at whatever price I could obtain.
There were challenges associated with this separately deeded property. It was only 1/3 of an acre in a neighborhood strictly zoned for one acre lots. This meant no house could be built on this property. Further, the value of the property was diminished because the property in its entirety was in a floodplain, providing another reason a home or other structures could not be built on it. And, finally, the history of the property did not enhance its economic reputation or prospect. My client had bought the property on the courthouse steps when it was in foreclosure. The owner told me he had purchased the property for $17,000. Because of the limitations of the property, he purchased it at such a low price even though the price of the acreage in the neighborhood at the time was $1.5 million to $2 million.
Armed with this information, I called the neighbor interested in buying the property and explained that I was representing the owner. I proceeded to ask what price the neighbor considered buying the property for. This buyer said they were willing to pay $57,000. I asked the buyer why they were considering making such a low offer. They explained that they didn’t think it was a low offer because the owner of the 1/3 acre only paid $37,000 for this property. I quickly said, “Oh no, he did not pay near that much, he only paid $17,000 for the property.” The neighbor went on to say that this fragment of an acre would have no value to anyone but them because nobody could build on it. In other words, they explained they were the only potential buyer. I responded that there were actually two other potential buyers for the property. One potential buyer was the neighbor on the other side of the 1/3 of an acre piece of land. The second potential buyer was my client the owner. I explained that if an owner does not sell the property, they are in effect buying that property. The neighbor also emphasized the property was still 100% in a floodplain, which made the property of little value. I replied that the most expensive estate properties in the Preston Hollow estate area almost always had part of their property in the floodplain. The reason these Preston Hollow estate properties were so valuable is that they were along a creek or a small linear lake that would flood part of the property after a heavy rain. I explained that an estate property sells for a price per acre, with all the acreage being assigned the same value – the areas in a floodplain and the areas not in a floodplain.
The key to the value of the property is that it has a sizeable enough building envelope to construct large structures. Any remaining land after a home is built is solely for creating privacy or for providing visual pleasure for the homeowner. I mentioned that my client has a very large home and accessory buildings, so they did not need the land across the creek to build on; however, they sure enjoy looking at the land. I also explained that if my client were to ever sell their estate home, their 2.85 acre estate lot would be valued for the entire acreage. If the land was valued at $1.5 million an acre, they would receive $500,000 less if they had previously sold off this 1/3 acre of beautiful land of theirs behind the creek. I did agree with the buyer that they were right that the property had no real value if it were isolated and not attached to another larger property with land out of the floodplain. In this case, however, this 1/3 of an acre property had value to the owner because they enjoyed looking at it, and it added real economic value to their property.
One thing I have always understood is that the owner of a property has the advantage in any negotiation with a buyer. If a deal falls through, the seller still has the asset and the buyer goes away emptyhanded. I suggested to the buyer that if they made an offer, it would be a more attractive offer if they included in the offer a deed restriction placed on the property that prohibited any cross fences or other structures for a period of 10 years that might interfere with my client’s view. I explained that it might be easier to pry this property away from my client if my client would still be able to enjoy their same view of the property. I also explained to the neighbor that they would not be giving up anything of value because they too wanted to keep the property open just to use it as an additional garden or lawn for their home. The neighbor then agreed to pay approximately $450,000 for this 1/3 of an acre property and include a deed restriction that prevented any cross fences or additional structures for 10 years. The neighbor’s purchase price was slightly less per acre than the other acreage in the neighborhood, but 25 times as much as the seller paid for the land and 8 times as much as the buyer originally thought was a good offer for the property.
I was able to successfully execute my client’s sell order, which they were pleased with. The neighbor was able to purchase the property that increased their enjoyment of their home and for a purchase price a little bit less than the real economic value it added to their property. A strategy was executed that pleased both parties, was economically beneficial to both parties, and for a price that far exceeded what the seller ever anticipated.
Contact Douglas Newby to Learn About Other Interesting Case Studies Listed Below
- A one acre lot property set a new high price per acre record in 2009 when the real estate market was in a slump. This record held for 10 years until the price surge during the pandemic.
- Turtle Creek lot sold at a higher price than a 4,000 square foot home on a much larger lot overlooking Turtle Creek in the same Turtle Creek Park neighborhood.
- Northern Hills house sold for more per square foot than any comparable size home in Highland Park or University Park.
- Highest price sales in many specific neighborhoods – White Rock Lake
- A small architect designed midcentury modern home sold for over $1 million in a $150,000 neighborhood.
- Crespi Estate.
White Rock Lake Case Study
The estate lots and historic homes located at White Rock Lake provide an interesting case study of a niche neighborhood that was grossly undervalued. The location, attributes of the sites overlooking the lake, and the limited potential number of properties available created far more value than what was easily recognized. There were many reasons the homes and the 2- to 5-acre lots were undervalued by the real estate community and potential buyers.
White Rock Lake is the largest urban man-made lake in the country. It is found in an East Dallas neighborhood next to Lakewood, about five miles from downtown and a few miles east of Highland Park. Several decades ago, all of the Old East Dallas neighborhoods went through a cycle of decline. Lakewood was one of the few neighborhoods that kept its homeowner base including third generation families. Most of the home sales in Lakewood were rather insulated, with most homes selling to other residents of Lakewood. White Rock Lake was one of the best-known areas in Dallas, as it was the only substantial lake in the city but it, too, went through a period of decay and deterioration. It became more associated with fraternity keggers and motorcycle groups riding around the lake that needed to be dredged rather than a beautiful backdrop for homes. When I was asked to sell a 4-acre property and a small 3,600 square feet historic home for a prominent family, I quickly recognized there was another obstacle. The Lakewood realtors who handled most of the sales in the Lakewood area adjacent to White Rock Lake would join the Lakewood homeowners at the Lakewood Country Club and agree that the acreage price of land on West Lawther Drive at White Rock Lake should be less than $1 million per acre. They said that is how much land sold for before and so that is what it is worth.
Another challenge was White Rock Lake was nine miles around, so it created an illusion of a large residential area. There were also several vacant 2- and 3-acre lots that had been for sale on and off for years, indicating a lack of demand and an oversupply of lots. In addition to vacant estate lots, the homes on West Lawther Drive overlooking White Rock Lake were relatively small houses – 3,000 square feet to 4,000 square feet. Historic homes across the city were being torn down on 0.25-acre lots, so it did not seem older homes would have much value on a 2.5-acre lot that had ten times as much land.
This is how I approached selling this 3,600 square foot 1920s home on 4 acres and subsequently selling 10 other homes for two or three times the price that land had sold for just a few years earlier.
- Redefine the White Rock Lake neighborhood and its attributes.
- Identify the 14 homes that make up a specific niche estate neighborhood at White Rock Lake.
- Define and name this niche neighborhood as the “Estate Cove of White Rock Lake.”
- Create a White Rock Lake video, not of the home for sale, but of White Rock Lake, with the theme that this was the best-known area of Dallas and the best kept secret.
- Market White Rock Lake and its homes to buyers across Dallas and the Park Cities and other parts of the country, not just to the pool of Lakewood homeowners who were considered the prime potential buyers.
- Rather than comparing land prices to Lakewood sales, compare the positive attributes and value of the White Rock Lake estate properties with large estate properties in other parts of Dallas, like the estate areas of Preston Hollow and Bluffview.
- Take an inventory of all the multiple acre lots in Dallas to demonstrate how few would be available even if every large estate lot or estate home were for sale.
- Illuminate the value of both the site and the existing historic home, recognizing that many potential buyers are more interested in the beautiful land and view and the graceful site for the home than just having a large new home that they could find anywhere in Dallas.
My instincts were correct. I contacted a sophisticated Highland Park homeowner who purchased and beautifully renovated this historic home and landscaped the acreage that resulted in landscape awards. Like many of the original homes at White Rock Lake that were built as summer homes just a few miles of unpaved roads away from downtown Dallas, this buyer renovated the home for a weekend home. The home was a fabulous retreat just 20 minutes from their Highland Park home, not 90 minutes or two hours away from one of the popular Texas lakes.
The more I became involved with selling properties on White Rock Lake, the better I understood the value of these properties that I was able to successfully convey to buyers that came from Highland Park, University Park, Lake Highlands and from out of town. While initially Lakewood buyers were too close to the forest to see the trees, buyers from other neighborhoods and states saw the unequaled benefit and attraction of living on White Rock Lake.
Prejudices that were formed over decades and were still lingering became erased by the ongoing improvements to White Rock Lake that had been dredged, new bike paths installed, and other improvements that made White Rock Lake an urban paradise. The trend was totally in favor of the buyers even as I was able to sell White Rock Lake homes and properties at prices 50% higher than the prices Lakewood Realtors were telling their clients these properties were worth. Once several properties had sold and the majority of the vacant lots had sold, there was a pool of 20 to 30 buyers and no lots or homes for sale. As a result, when Lakewood homeowners who had rejected properties as too high-priced several years ago, are now paying three times as much for a property that they had an opportunity to buy earlier at the much lower price.
Case Study of Public Company CEO and Architecturally Significant Home
When a CEO of a public company was moving to Dallas fifteen years ago, he was looking—preferably—for a modern home on a good lot. He was both an outdoorsman and an artist, in addition to being an incredibly successful business leader. I was enthusiastic about this home because it was designed by a very good architect, David Stocker, with a design and materials that accentuated an exceptional site on 1.3 acres backing up to a free-flowing linear lake.
Attributes of Modern Home and Site Outweigh Deficiencies
The home did have some drawbacks, including a kitchen and master bathroom that were somewhat awkward, and one bedroom that had been built with three built-in bunk beds for the previous owner’s triplets. The interior finishes also did not enhance the home. These drawbacks—reflected in the purchase price—were minor when compared to the underlying architecture, space, proportions, and the beauty of the lot.
My Client Enhanced an Architecturally Significant Home
My client who purchased the home did not simply hire a contractor to modify the kitchen and master bedroom. Instead, he retained the original architect, David Stocker, to redesign these rooms and make additional refinements. He also engaged a landscape architect to enhance the landscape. The landscaping alone added well over a million dollars in value.
Most properties on a creek or body of water have a boundary line that more or less runs down the middle. In this case, the homeowner owned land on both sides of the linear lake. Ten feet across the water was enough room to plant trees and foliage that completely screened the homes on the opposite side. What had been a pretty lot was transformed into an urban paradise—a curving lake disappearing into forested boundaries in the distance. A crisp edge of landscape design, combined with organic and softened planting, accentuated both the modern architecture and the woodsy character of a property that felt removed from the city.
What a Current Homeowner Loves About Their Home — a Buyer Will Love
I often say that what a current owner loves most about a home, the next buyer will as well.
The next buyer was an architecture aficionado. He had commissioned homes in and out of Texas that were featured in national design magazines and presented through the Dallas Architecture Forum lecture series. He understood good design and was highly discerning. When he called me, he said he was on my website often and knew that I had a deep understanding of architect-designed and architecturally significant homes in Dallas. He asked whether I knew of anything that might be coming up in Preston Hollow. I told him I might and would get back to him. And I did get back with him in two months.
A Listing Agreement Well Before the Home Goes on the Market
The homeowner had already asked me to represent him in the eventual sale of the property, and we entered into a written agreement. While he did not yet know when, within the coming year, he would be ready to put the home on the market, we agreed to begin the preliminary work. This is a phase I always enjoy and believe is essential.
An Agent’s Preliminary Work Always Pays Off
Some agents prefer to pursue a quick off-market sale or move rapidly to MLS before investing real effort in presenting a home. I prefer that any potential buyer have a full understanding of the property, which I believe leads to a good and graceful sale. Preliminary work may include a fresh survey, preliminary title work, architectural floor plans that are easy for a buyer to understand, professional photography, and a written narrative of the home. There is a dedicated section for the home and property on my website, where it is presented as an example of good architecture and its neighborhood.
This Home was Brought to the Attention of the Potential Buyer
Once the homeowner was comfortable with my mentioning the property to a prospective buyer prior to formally placing it on the market, I shared the home with him and sent all of the material and images that had been assembled. The buyer responded very favorably. Seeing the home in person simply confirmed his impression.
The Buyer Confirmed He Loved the Home
It then became a matter of defining the closing date and the two-month period following closing during which the seller would remain in the home. Within those parameters, the buyer made an offer that was acceptable to the seller.
Graceful Transaction
This is a good example of working with a buyer who has a strong eye and being able to negotiate the purchase of a home that is superior to others on the market—and capable of becoming even better. When it came time to sell, the qualities the homeowner had identified, valued, and enhanced made the property irresistible to a sophisticated and knowledgeable buyer. By doing the preliminary work, the buyer had a clear understanding of the home and was able to evaluate and purchase it with confidence and clarity.
Discuss Representation of an Architecturally Significant Home with Douglas Newby
