"My house, my house, my house . . ." Mateo's little voice sang out as he explored his new home, his little toddler legs taking him up the stairs with his mommy in hot pursuit. "My house!"
There are few events that give an agent as much joy as successfully closing a transaction and delivering the keys to the new owners (except perhaps, the incredible comeback run of our San Francisco Giants for the National League Championship that we all just witnessed in "their house." Go Giants!)
While I can't throw a fast ball (heck, I can barely see a fast ball) delivering your dream is what makes my work incredibly worthwhile.
("My house?" "Yes Mateo, congratulations.") It's the home run of Real Estate, so to speak.
Conversely, it's difficult news to deliver when a Buyer's offer falls short leaving him/her as runner up, as often happens in a rapidly-rising marketplace that offers up decidedly less supply than demand. (Hmmm . . .)
The hard truth is that in any marketplace, there is an intrinsic learning curve for Buyers, but in an escalating marketplace, it's often more challenging for them to quickly come to terms with the fact that they will need to make an offer well above the asking price in order to beat out the other interested parties lining up to bid.
Or put another way: the list price and the purchase price have almost NO relationship to one another!
Huh? What's that you say?
Remember, Realtors set a 'pricing strategy' only. Although we often drive the marketplace and certainly qualify value, we don't ultimately define the market value on any given property. (You; however, do!) It's why I often council my clients that they'll need to write their very BEST offer when multiple offers are at play.
What's more, to be truly successful in the world of "multiple offers," Buyers will need to set aside the analytical part of their brain that keeps them second guessing their offer amount and instead, carefully consider the intrinsic value of the home, community, neighborhood, schools, etc. For many of you, that's difficult to do . . .
"Can I sleep on it?"
Of course you can, but by the next morning, Buyers typically make the mistake of holding back "just in case" they are countered by the Seller. They want to know that there is something left to negotiate with, should it come to that AND they don't want to "overpay . . ." (I hear you but I respectfully disagree).
That's all well and good, but it won't help secure the home if the ball isn't hit into your outstretched glove. Moreover, chances are that if you receive a counter in a multiple-bidding scenario, other parties will have received a second opportunity as well, which results in both a race to the finish AND a popularity contest. (Gee, that's exciting - NOT!)
Let me save you some time and trouble, the winning offer will almost always pay the highest price and typically, with a substantial margin to boot. (Aggressive "terms" can sometimes persuade a Seller, but that's another story for another day.) You didn't "overpay." You paid what the market would bear, and if you are well coached, you have written in your inspection and appraisal and loan contingencies as a safety net to affirm the market value.
In short, you need to make the Sellers' decision very easy in order to get on base. If you can, it's best to take the tug-of-war between your offer and another, out of play altogether which sometimes requires you to up your ante prior to receiving a counter offer (that's a short-lived opportunity, but one that often works). If I get a sense you'll be "overpaying" for the property, I will be the first to tell you so (pinkie swear).
In the meantime, try to look at the BIG picture and put this home purchase into context - you are working with leveraged dollars, at a time where the affordability index has never been better and interest rates are hovering at historical lows, below 4% in most cases. If you lose this house to a more aggressive Buyer, the next one up for consideration is likely to cost you MORE (each successive sale creates a higher floor) and so it goes.
So if owning a home is in your future, listen to your manager, create a winning game plan, field your best team, set aside your strategy of "edging" out your opponent, swing for the fences and aim for a decisive victory or to quote Mateo, "MY HOUSE!" (Out of the mouths of babes . . .)
And if that isn't exciting enough, watch the San Francisco Giants in their quest for the World Series Championship. That's pretty darn exciting. (Who's got an extra ticket or two?)
"I'll see you later today at the game," my boss, DJ, said to me, noting my purple under shirt, purple football jersey and GREAT BIG Booster pin, proudly displayed on (you guessed it) a dangling purple lanyard. Gee, what gave it away?
Okay, it's true, I've become a devoted Piedmont High School football fan (in spite of my protestations to the contrary) and it doesn't hurt that my son, Tristan, is having a banner year on a team that's been nearly undefeated this season.
Gaining these hard-earned skills didn't come overnight. Last year was an entirely different story when the team (primarily Freshman at the time) were just learning the ropes, having never played tackle football before. Those boys took A LOT of hits and had their fare share of losses as they grew into their positions; but having paid their dues, they are now reaping the rewards. Go Highlanders! They've earned it through good old-fashioned blood, sweat and tears.
So of course, I'm decked out in "purple, purple, purple, purple (white, white, white, white, white, white, white!") along with my fellow Piedmont Boosters/parents AND I'm proud to state the obvious. Heck, I'm practically a walking billboard! (In truth, I don't even like purple.)
"Stating the obvious," isn't just good practice when it comes to selling a home, it's the law. Moreover, it's not only the "obvious" that should be disclosed, but those issues that might be far less obvious as well. Too often, Sellers fudge a bit on their disclosures hoping to present their houses in the best light. That's understandable, but it's incredibly short-sighted.
Take it from me, either YOU put it all out there, or your neighbors undoubtedly will . . . "Did they tell you about the flood they had in their garage last winter?" (Uhhh, no.)
What's more, your well-intentioned neighbors will feel compelled to "share" these "insights" with your Realtor at a Sunday Open House WITH prospective Buyers in earshot, or worse yet, once the "Sale Pending" sign goes up. (Gee, that's always fun.)
When Buyers discover defects with the home after they are in contract, instead of before, it's never pretty; it may even end in legal action so just disclose. It really is that simple (although it may not be easy).
"Do I need to mention that we added a master bathroom without a permit?" (Yes.)
"Should I mention my neighbor's son plays the drums?" (Yes.)
"How about the cats, and the . . . ?" (Disclose it ALL. If you have to ask, the answer is almost always "YES.")
That's why savvy Sellers know that the more information they share, the better off they are and seek to make their Disclosure Packages as complete as possible. Unfortunately, in cases involving probate sales, foreclosures, and relocation companies, where the "Seller of Record" has never actually occupied the home, the trustees are often exempt from the majority of Seller Disclosures, which frankly, puts everyone at a real disadvantage. (Shoot!)
Sellers, just so you know . . . the less Buyers know prior to presenting a purchase offer, the more they will need to investigate after ratification and the more opportunities there may be to renegotiate the price of the purchase.
Don't assume prospective Buyers have processed what's right in front of them, such as an active bus stop, looming power poles, or the Fire Station directly across the street! (It may sound ridiculous, but there it is.) Such logical arguments will never hold water in court. For your own benefit and protection, disclose, disclose, DISCLOSE!
With respect to Buyers, your responsibility lies in reading the disclosures carefully, highlighting any concerns you have about a particular home, and following through on any questions that arise. (I get it, it can be daunting, but do it anyway.) It's one thing to deal with cosmetic upgrades in bathrooms and kitchens, which can be expensive in and of themselves, but quite another to take on foundations, retaining walls, and drainage issues - when you weren't expecting to. (Surprise!)
Don't be fooled into thinking the property is perfect just because it has been beautifully staged (no home is ). Staging is designed to have you focus on what's pretty - not what isn't. Concentrate on what the house will look like after all the beautiful furnishings and accessories are out. Whatever the home's current condition, it will be far more acceptable if you know it going in. Agreed?
Finally, a Buyer's opportunity to investigate, collect bids, and gather facts occurs during the inspection period of your contract - not after you have closed escrow and moved in. (Defined time periods exist for a reason.) Even in tough competition (and especially in tough competition) secure your right to inspect and then utilize this time well.
Waiving your contingencies without thorough investigation may leave you without recourse. Unless you are sure of what lies ahead (or believe it to be irrelevant, as sometime happens with complete "fixers"), don't give up this very important safeguard. Given the dollars you will be spending, you should understand exactly what it is you are purchasing.
That isn't to say there won't be surprises or unknowns. There absolutely will be, BUT to the extent that you have a good-working knowledge of the home and its major components, you'll feel much better about closing the transaction and taking possession of the property (and so will I).
Buyers and Sellers - look for the obvious (and the not so obvious) and then disclose or investigate it! In both cases, you'll be much better served and better protected as well.
Now can I interest you in a little football swag? We've got some lovely purple jerseys and hats to sell . . . See you at the game.
I'm getting ready for a BIG hike next month in the Grand Canyon with a group of very dynamic Piedmont moms (unfortunately for me, most of them are at least a decade younger, and ALL of them are in much better shape).
I've only ever seen this majestic geological masterpiece in photographs so I'm thrilled at the prospect of looking over the steep rim of the canyon and finally discovering one of the "Seven Natural Wonders of the World." (17 million years in the making!) It's a really exciting proposition and one that's been on my "Bucket List" for years. (Thanks for asking me Jen.)
In preparation for this challenging journey (the Grand Canyon is more than 277 miles long, 18 miles wide and 6,000 feet deep) we have each dusted off our walking boots, have been meeting for weekly training hikes in the Oakland hills, and have clocked a fair number of well-traveled miles . . . BUT I'm still falling a bit behind. Those super fit gals kind of leave me in the dust (quite literally).
I'm not complaining, mind you; I'm absolutely thrilled to be included, but I may have to come to terms with the fact that once we arrive in Arizona, I'll very likely be trailing the pack for a good deal of the trip (if not all of it).
Hey, that's life. Someone has to come in last. The trade off may be that I will have time to enjoy the spectacular scenery just that much more. My sister would wisely remind me:"it's not the race, it's the journey," and she'd be absolutely right, but that still doesn't mean that I fully embrace my slower status. It is what it is.
Now "trailing" with regards to a friendly hike among friends may be just fine and dandy, but it's NOT so great when it comes to the competitive world of Real Estate. NO ONE enjoys the position of coming in second or third on a highly desirable property (especially your Realtor).
Without some healthy perspective about the market as a whole, trailing behind the pack and coming to terms with one's limitations, can be incredibly disheartening to say the least. (Believe me, I understand.) Eventually, even the most well-intentioned Buyers can run into "buyer fatigue" and pull away to regroup. (No worries, I'm not going anywhere.)
Take heart; you are not alone.
The truth is that most Buyers will trail far behind the pack for a good while until they finally get "fit" enough to come to terms with the challenges they face. When they discover - and then externalize (!) - the fact that the winning bid typically goes to the Buyer that puts forth not only the highest price, but the best terms as well, they then begin to stand a more than decent shot at prevailing.
For each Buyer, this learning curve varies considerably. Some Buyers will get there in a matter of weeks, while others will take months (if not years) but invariably ALL Buyers go through a rigorous Boot Camp of sorts while navigating the trail.
However, if you have done all you can and you still find yourself coming up short (that hurts) it may be as simple as "supply and demand," unfortunate market timing, OR it might be time to reevaluate your "wish list" and adjust your expectations accordingly. Unless you are fortunate enough to be Bill Gates or Warren Buffet, you are probably working within a defined budget and some real life limitations. It is what it is.
Just keep putting one foot in front of the other. With clear intentions and reasonable expectations, you are bound to arrive at your destination eventually. Consider these near misses your training hikes for the big payoff that lies ahead. While it may not be so easy to enjoy this particular journey (the scenery isn't nearly as inspiring) there are definitely new adventures and other opportunities on the horizon. If it takes us a little more time to get there, so be it.
I promise, I won't leave you in the dust!
"Photo opportunity!" I giggled as Teresa and I sped up through the intersection in a "pseudo jog," before slowing back down and returning to a more leisurely pace. We'd entered Piedmont's Annual FallFest 5K benefitting the PHS Wellness Center last Saturday morning (totally fun BTW!) so we were crossing paths with volunteers/parents/friends at nearly every intersection.
As a result, I was out to impress - waving, smiling and pumping my arms in mock sprint fashion . . . (we were certainly having a good time, if not setting any new course records). "
You have to pace yourself at these events," I conspiratorially explained to my walking buddy, Teresa, "You may not have noticed, but I'm no longer in my thirties (or forties) so I'm only RUNNING when I see the official course monitors or their cameras. It's all about 'perception!'"
"Perception" was front and center on my mind, having spent the better part of Friday at a work seminar entitled "Perception, Visibility & Influence," conducted by well-known speaker, Joel Garfinkle; a BIG-time business mentor and a prolific author with more than seventeen years of experience coaching business GIANTS like Google, Microsoft, and Starbucks, just to name a few . . .
Given his successful track record coaching Fortune 500 executives, Mr. Garfinkle had earned our rapt attention and he provided some valuable insights into how others "perceive" not only the marketplace, but about how Buyers and Seller "perceive" agents as a whole (evidently, we occupy the rung just above used car salesman - and that's a major problem.)
"You need to tell the story," he emphasized, "because the more 'seamless' you make the process for your Buyers or Sellers, the LESS it appears you actually do. The fact is the majority of the public haven't a clue about what goes on behind the scenes or the value REALTORS provide."
That's True . . .
Nor should you (that's why you've hired us after all) but Joel's point is well taken just the same. When you, as the Buyer or Seller, only enter the marketplace every seven years or so, there's a LOT you won't know and don't know, which means it's our job to educate you in order to make you (and your homes) truly competitive.
What's more, we need to bring you up to speed relatively quickly, or you'll forever fall short of your desired goals. In short, it's all about "perception" and making sure your particular perceptions align with market realities. Remember (and I say this with all due respect) your 'feelings' aren't necessarily facts. Without exception, everybody believes their home is more special than the one down the street (including Realtors) and everybody believes they can outsmart the marketplace! (That rarely happens.)
While the basics of buying and selling remain forever true, the mechanics of the deal have gotten MUCH more sophisticated - especially as it pertains to Real Estate, which is apt to be your single, largest purchase. As a result, there's so much MORE at stake. Between the individual homes, the unknowns of the marketplace as a whole, and the unique personalities and egos that emerge, there are simply many more moving parts in today's more demanding world and that's where your REALTOR earns his/her keep.
New "Point-of-Sale" ordinances constantly come into play, home prices are rapidly rising in many neighborhoods (while simultaneously falling in others). Buyers are more reticent, Sellers are more anxious, lending practices have changed dramatically, appraisals are more exacting, timelines can be tougher to meet, and short sales and foreclosures are now part of the landscape, etc., etc., etc. My job as your Realtor, is to navigate these obstacles on your behalf, negotiate through the hurdles, and secure any loose ends along the way, thus delivering you safely through the close of escrow and securely into your new home. (Whew!)
Which is why it's not uncommon for new agents to exclaim that they'd "just like a 'normal' transaction," to which the more seasoned of us uniformly reply "It doesn't exist!" (We actually shout that.)
While ALL sales have repeating themes (Buyers want to spend LESS while Sellers want to realize MORE) the truth is, every single transaction is a new and challenging experience by virtue of the different parties and circumstances at play. In short, juggling all these often disparate components is NO easy, breezy, casual 5K walk in the park (or through the beautiful tree-lined streets of Piedmont for that matter).
That's why it take years of experience to earn one's stripes, to build a solid reputation, to negotiate with confidence, to have the difficult conversations, to align expectations with reality, to accurately anticipate the market response, and to develop a strategy for both buying and selling that brings real value to the proposition and ensures that you will refer your friends and family and return to us time and again for our battle-earned expertise.
While I might ham it up on the race course, I recognize that buying or selling a home isn't a "pseudo jog" to you; this is your future and I hold it very dear. Whether your intention is to cross the finish line well ahead of the pack, take your time on the journey, or chart a new course altogether, I'll be there. Feel free to give me a call.
How can I help you?
Julie Gardner, has been writing The Perspective for 14 years and has published more than 500 essays. She is also a frequent contributor to the Sound Off column in the Real Estate section of The San Francisco Chronicle.