Case Studies – Success of Clients
Here you will find a few case studies where Douglas Newby shares his approach to representing and benefiting his 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.
How to Determine Land Value Beyond Comparable Sales
Here is something most people misunderstand about the Dallas real estate market: value is not just a matter of what is for sale at the moment; it is also determined by the entire inventory of certain types of properties. Most agents and buyers focus on what is on the market. The more important question is how many properties of that type even exist.
For example, how many one-acre or larger lots are there in Highland Park? There are only 50. All but five are already occupied by substantial homes, and the remaining five are not truly available—they are anchored by architecturally significant homes that have been extensively renovated.
Six months earlier, leading appraisers and agents were confident that Highland Park land was worth $15 million an acre. As the conversation shifted from what was available on the market to what actually existed, and as these constraints became better understood, perception changed. And when perception changes, value follows. We are now seeing lots selling for more than $20 million an acre.
Many assume there are 200 or 300 half-acre lots in Highland Park when, in fact, there are closer to 60. This limited number makes the off-market Highland Park and University Park half-acre lots I identify for clients even more compelling. This understanding of the entire inventory helps sellers determine the right price and helps buyers recognize real value when they see it.
The value of land is not determined only by the most recent comparable sale. It is also determined by how many comparable properties actually exist, how many are truly available and how strongly buyers desire them.
This Highland Park case study shows that when scarcity is understood, perception changes—and when perception changes, value follows.
When Even the Best Greenway Parks Realtors Miss the Value
Greenway Parks may be the most popular neighborhood in Dallas. It is also the neighborhood with the highest concentration of top real estate agents, which is another good endorsement of the neighborhood. And yet, I often see even these top real estate agents who live in Greenway Parks underestimate the value of the homes in their neighborhood.
When the Market Underestimates a Greenway Parks Home
I recall a very small architect Charles Dilbeck historic home that I helped a buyer purchase that had been listed for less than a same-size home in a modest Old East Dallas neighborhood. Or a small architect-designed Greenway Parks mid-century modern home that I listed and sold for a higher price than the neighborhood agents thought the home would sell for.
This buyer still marvels at what a great home they purchased and what a good value it was because nothing comparable in architectural quality or location has become available in Dallas at anywhere near the purchase price.
Another example was a relatively new architect-designed modern home that I listed at a price higher than the neighborhood Realtors thought it was worth and sold to a buyer I represented. This 5,000-square-foot home ended up being the most expensive home on less than half an acre that sold in Dallas that year. Despite the higher-than-expected sales price, many buyers later wished they had purchased the home because another home of this architectural significance and livability has not come on the market since in a neighborhood this desirable.
The home that I think best illustrates how even top real estate agents in the neighborhood can miss the value is a 1950s one-and-a-half-story Colonial-style mid-century ranch house designed by Fooshee & Cheek on .953 acres in Greenway Parks.
The home had been owned by the same family for several decades and was now in an estate handled by the children. It was stacked high with a lifetime collection of furniture and other personal effects of the family that had been consolidated at the home.
The children handling the estate and the sale of the home lived in Dallas, attended St. Mark’s, were well connected in the community, and were friends with many of the top agents in Dallas and Greenway Parks. Several of the agents they knew and were friends with had come through the house or the estate sale and said the house itself had no value. They all said it was 50 years old, needed so much work, had low ceilings, and the exterior style was out of date. In other words, it was a teardown and ought to sell for lot value in line with what the other lots were selling for in Greenway Parks.
I Saw the Same House Differently
I saw the same things the other agents saw, but I interpreted what I saw differently.
Yes, I agreed. It was true that not many people were probably waking up in the morning and saying, “I sure hope I can find a 1950s one-and-a-half-story Colonial-style mid-century ranch house with 8½- and 9-foot ceilings that does not have a 21st-century kitchen, primary bedroom suite, bathroom, and closets.”
However, I saw a charming home that was beautifully composed, evoking a nostalgic feeling of what a neighborhood home should be. The American flag flying from a porch post seemed not overly patriotic but perfectly in place for a neighborhood Colonial-style home.
Since the architects Fooshee & Cheek had previously been partners with the great society architect Hal Thomson, they designed the home with very large rooms that opened up to each other and had an abundance of windows. The home could easily be updated within the original framework of this luxurious and very important home of its time.
And what really impressed me was that this home was on the largest lot in Greenway Parks, on the corner of landscaped Greenway Parks Boulevard.
Recognizing the Value Others Missed
I listed the home at a much higher price than the neighborhood Realtors recommended or suggested to the owners. One of the people I showed the house to was one of my clients. He had never redone a house and was certainly not looking to have to redo a house. He did not need a home this large.
I also told him the price was higher than the commonly perceived value, but I thought it could be a great investment and that he should take a look at it. I shared with him that, in my opinion, it was land that went up in value, not structures, and this was the largest and best lot in Greenway Parks.
I introduced him to a brilliant interior designer, Allen Kirsch, who designed entire houses in addition to doing the interior design and architecture of homes. Allen was able to give him a vision of the home once it was renovated. He also introduced my client to a contractor Allen often used on homes for which he was designing the renovation.
Remarkably, in addition to not wanting to redo a house, having no experience renovating a home, and not needing a home this large, my client was very cautious by nature and financially prudent as a partner with a prominent hedge fund. On top of that, he had never even owned a home before.
He bought this home.
A Renovation That Rewarded Vision
My client had the home renovated, and it became a place of many neighborhood parties and other celebratory events. He loved the home, as did everyone who saw the home.
The Resale Confirmed the Value
Many years later, when my client retired and moved out of town, I listed this home again at a price higher than any of the other homes in Greenway Parks.
Once again, many thought the home was overpriced.
While many potential buyers were very interested in the home, it eventually sold to buyers who initially looked at buying the home but then decided to purchase the home for its lot and build a new home. They paid more for the lot than anybody had paid for a home in Greenway Parks at that time.
Many who thought my client had overpaid for the home saw that its appreciation far outperformed that of any other home in the Greenway Parks neighborhood during the same time period.
Why This Lot Appreciated More Than Others
Not all land will appreciate as much as this Greenway Parks lot, but land is always an important and often underestimated element of a home’s value.
There is a reason this almost one-acre lot went up so much in value in comparison with the other homes in the neighborhood. Greenway Parks is a popular neighborhood that attracts homebuyers who have wealth and resources far beyond the cost of Greenway Parks homes. These buyers can afford homes in any price range and in any neighborhood but love the special characteristics of Greenway Parks.
Scarcity Determines Value
While there are only 294 homes in the Greenway Parks neighborhood, there are only 26 homes on over half an acre, and only three homes on three-quarters of an acre. There is only one home on nearly one acre.
The buyers of this home considered Greenway Parks the best neighborhood—the favorite neighborhood for their family. This site and the size of the lot represented a singular opportunity. As a result, they paid a higher price than the adjusted comparables might suggest it was worth.
However, for the same reason, if these homeowners were to sell, their home would again outperform the market because it is a spectacular home on the largest lot in Greenway Parks.
This Greenway Parks case study once again shows that demand, scarcity, and desirability determine the value of an architecturally significant home and land in an attractive neighborhood.
What Home Will Attract a Buyer That Has Owned Architecturally Significant Homes Across the Country
Recently, I was confronted with a tall task. A buyer with a history of owning spectacular modern homes across the country—homes that had been published in Architectural Digest and discussed at architectural lectures—asked me to find an architecturally significant modern home to purchase in Preston Hollow.
My clients engage me for many reasons, but one is that they know I understand they want a home that provides more than satisfying statistical requirements and desired amenities.
However, not every client has previously owned homes that have been published, celebrated, and discussed at architectural lectures. Here was a buyer with exquisite taste and a discerning eye, and I knew every home would be compared with their previous homes of national recognition.
I successfully found them an architecturally dramatic and aesthetically compelling modern home designed by architect David Stocker, with the interior by Colleen Waguespack.
Why Site Comes Before Architecture
What I find most interesting is that it was not only the raw appeal of the architecture that created the motivating attraction to the home. It was also how the architecture related to and responded to the site.
I often help my friends and clients find architecturally significant homes, but as a real estate broker, I always suggest looking first for the best site and then, secondarily, for the best home. A home can always be modified or enhanced. A spectacular home on a beautiful site almost always ensures that one will be happy living in the home one has purchased. Ultimately, that is the priority—a home that will make one happy.
The site determines how you live in and enjoy the home—views, sunlight, nature, neighbors, privacy, or vibrancy. Architecture can enhance these qualities but cannot create them where they do not exist.
How This Modern Home Responds to Its Site
Sunlight, space, and sightlines are elements that form the foundation of a home. Materially expressive, meticulously crafted, and meaningfully designed architecture makes a home memorable.
The buyer immediately had a positive impression of this modern home as sunlight poured in, illuminating connected and staggered spaces. This invited them to look through the home to the rear terraces, pool, garden, and lake.
The Texas modern indigenous materials reinforced the relationship between the home and its site. Stone, wood, glass, and steel were selected not just for their appearance, but to connect and transition the home from its interior to the decks, terraces, pool, lawn, garden, and lake.
A Modern Home Beyond Architecture
I do think of architecture as art, but not like art in a museum, roped off and untouchable. A home should be instinctively inviting to live in and use.
One of my favorite images of this home is a photograph the buyer sent me of his family and neighbors fishing for largemouth bass along the linear lake that frames the lot.
The Memories That Make a Home
Yes, this is a modern home where the rear terraces, porches, pool, lawn, and lake create an environment that invites one to participate in one of the oldest and most traditional forms of entertainment—fishing.
Ultimately, one loves a home for the memories it creates and the memories it offers to create in the future.
Architecturally Significant Homes Appraise Higher Than the Comparables
My experience is that appraisers are very conscientious and very good at what they do. Rarely have I asked for an appraisal to be reviewed because I thought it was incorrect and too low. On the few occasions that I have asked a lender to review an appraisal, a review panel of appraisers has indeed raised the appraisal.
However, I often have discussions with appraisers on more global issues regarding approaches to value in a neighborhood or the city. I might also share my perspective on a specific property or type of property.
For years, one of the most influential and respected appraisers among banks and Realtors was D. W. Skelton. I recall arranging for him to do a pre-appraisal on a property to help determine the listing price of a Charles Dilbeck home on Shenandoah—one of the “Four Sisters.” He came back with a well-thought-out and well-documented appraisal using five good University Park comparables.
I told D. W. that I thought he had done a good appraisal, but that I believed he was 10% low on what the home would sell for. He asked why I thought that. I said the home was a Charles Dilbeck, architecturally significant home that would command a 10% premium. I then listed the property for 10% more than his appraisal, and we received three offers in the first week and closed within 12 days at full price.
The next time I saw D. W. Skelton, he told me he had begun giving architect-designed, architecturally significant homes, like the Charles Dilbeck home I had just sold, a 10% premium because of their architectural significance.
Architecturally significant homes often sell at a premium that conventional comparables do not fully capture.
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.
Continue to See More of Case Studies
Discuss Representation of an Architecturally Significant Home with Douglas Newby
