Adversaries

It’s no big secret that Real Estate is a competitive business. I recently heard that there are roughly 550 homes selling per month in San Mateo county…and there are something like 3300 Realtors. Needless to say, competition is keen and as a result it’s not uncommon for alot of us to become adversaries, particularly when competing for business! If I discover that I’m competing against certain agents, whether it be in a multiple offer scenario representing buyers or for a seller’s listing, the competition takes on a sort of Dodgers-Giants quality to me. I simply can’t lose to them! In fact I won’t lose to them!

Of course, I delude myself because sometimes I win and sometimes I don’t. Often times, when I’ve sold a home and we’re inside of an escrow, it can feel adversarial with the agent on the other side of the transaction. Most of the time things work out just fine, we do our jobs and everybody ends up happy in the end.

Having said all that, it’s very, very common for both buyers and sellers to feel adversarial with each other to some degree too. Everyone has some degree of suspicion toward each other and often that becomes distrust. Buyers can become suspicious of the sellers inspections, sellers worry about the buyer’s inspection contingency, sellers (and listing agents) worry about the validity of the buyer’s pre-approval letter, buyer’s get suspicious about why the sellers are moving in the first place, sellers feel like the buyers are trying to take advantage of them when they write an offer under their asking price and buyer’s feel like the sellers are greedy for asking that much in the first place! And the world goes round and round.

Recently I had this experience: The seller’s loan amount is slightly higher than our asking price on her 2 bedroom condo. Neither she nor her family want her to lose the property to foreclosure and so she’ll get help financially to bring the necessary cash to closing so that she won’t have to endure a short sale. She’s experienced alot of emotional suffering about this situation. A buyer comes along who makes an offer $20,000 under the asking price and I suggest that she take it. She understandably wants to counter offer $10,000 higher so she won’t have to ask for as much help from her family. The buyer thinks about it overnight and gets feedback from friends and family…who advise her that her first offer was too high and she should go $30,000 under the original asking price. She came back with a counter offer $10,000 under her original offer. Her sphere of influence convinced her that the market for this type of property was still going down and that her original offer was too high…even though it was lower than the last comparable sale. Honestly, given the input that she got her thinking was perfectly understandable too. We couldn’t put it together and the buyer walked away. I’ll bet both parties here felt like the other was greedy…and I really don’t think either side was.

Here’s the bottom line….buying and selling a home is a very emotional event in almost everyone’s life. It’s easy and human for us all to misunderstand each other during this process…and become adversarial. It’s a mistake when we do.

Comments

  1. Jim, I am not surprised that you often win. Your description is correct and you understanding of both sides is just wonderful.

    I get a lot of inquiries on distressed sales in the area. People notice the lowest priced properties and, being out of the area, they start researching it as if the proeprty would be there in even 5 days.

    I never tell them that if you are thinking about this property, you not only need to move fast, but you need to think of offering more than the asking price, and sometimes seriously more to win.

    It is strange, but especially with REOs, the listing agents put BS price so low, that they create a bidding war, and then they are proud that they got the offer for higher than the asking price. They donot understand that even after all that, the property went for 20% under low current value.

    I see two things on the market: competitivenes and incredible lack of professinalism. Inability to price the property to that extent is staggering. And the other problem is that a lot of those listing companies are out of the area. THey are not really far, but far enough to know nothing about the area and the property.

  2. You sound like a warm and compassionate realtor. It is a tough market. There are so many different sceraios out there it is no joke. A lot of buyers are making offers on where they think the price will be in six months, which depending on the motivation and need of the seller, could work.

    I have submitted about 8 offers for 3 buyers in the past 2 or three months, every single one was in a multiple offer situation, we got none of them. Asking prices ranged from $350K (REO) to about $800K. Some of the offers were full price, some were over asking. I agree that pricing a home WAY below market is one strategy many listing agent are using to get mulitple offers, and that works. But it is hard for the buyers, becasue they then think that they may actually get the home for that price, even when shown comps that are tens of thousands of dollars higher.

    Regarding the adversarial relationships between buyer and seller, I think we as agents can all try to be less advesarial, and more of a team. After all, the goal for the agent is to get a paycheck, for the buyer to get a house, and the seller to sell one. sincere compliments to the agent on the other side, and showing a willingneess to work on coming to terms can work wonders. (Sometimes!)

  3. The market has changed. We need to adjust to the business that is going on. Pricing is different every day here in CT! Friends of buyers and sellers are happy to offer their advice. Especially, since they have no “skin” in the game.

  4. nicely depicted about the mentality of the buyer/seller. being a buyer myself and priced out of the market for so long and waiting on the sideline, it does not make economic sense when everyone jumped at the escalating prices in the past 4-5 years. Now that banks are stepping back and there is no CDO loan, its getting tough to get a loan from the bank unless you come up with 120-150k downpayment. Of course, the price is not going to go down in one day, will take months if not years. Same with stock market, the prices does not go down in one day for good companies.

  5. Thanks for the comment Guru! You’ve hit the nail on the head with regard to the lenders. The problem will be that when their criteria loosens, which it inevitably will, a flood of buyers will come back into the market place and multiple offers will ensue. If you’re qualified and have the down payment now’s a pretty good time to buy.

  6. It sounds like your seller really tried and the buyer didn’t. Unfortunately there is too much inventory for buyers.

  7. Chad Baird says:

    Alot of the time the adversarial aspect is between the agents more than the customers. THe customer is going to take their lead based on the attitude of the agent that represents them

    Each agent has to represent their clients needs. Sure we are on different sides of the fence, we have to be. But our jobs is to get the two parties to the fence and get along. I know its easier said than done.

    I just told a seller- I have good news and bad news. Good, we have a buyer. The bad, you may not like the offer. Lets talk about it and find a middle ground.

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