I received a fair amount of responses to my post a few weeks ago with respect to "rejection," (clearly I wasn't the only one not invited to the prom) but the most meaningful response came from a close friend who had this observation to share:
"Rejection is very hard; I'm way too proud, but if I take pride off the table - who could I become?"
Which made me think - Does pride goeth before the Fall? (Yes, it often does.)
Rejection, resentment, pride and expectation . . . these are often the pitfalls not only of Real Estate, but of life in general. When I look back at the handful of transactions where a relationship or a deal has gone sideways, I frequently find that one or more of these difficult traits has intervened. And whatever the motivation, the interjection of one's ego (aka: pride) certainly never improves a transaction's trajectory. (Warning, Will Robinson!) Moreover, once a deal begins to unravel, piecing it back together is often a painful and challenging uphill climb that you'd be better off avoiding from the outset.
It's not that "difficult" deals aren't salvageable or that they don't close (they do) but that they, more often than not, tend to leave a bad aftertaste that continues to linger for both the buyer and the seller for months or years to come. (Not to mention the agents who have quite often gotten caught up in the crossfire.) In my experience, the best deals are those deals where everyone leaves the negotiating table having conceded something to the other side.
In an aggressive marketplace that invites bargain hunters, investors and first-time buyers from all camps, it's still imperative to understand the seller's motivation and psychology and to separate what's relevant from what is not. And at the risk of sounding 'Pollyanna,' your win should never come at the expense of someone else's loss. I'm not talking money here (arguments with respect to real estate are rarely about the money - they are about the 'upper hand' - aka: pride).
Not that money isn't behind much of the uncertainty in the marketplace or that it doesn't fuel unrealistic expectations (it does) but that dollars are the only real way to quantify "who won," and not, in my experience, the underlying issue at hand. Examine the motivations more closely in a heated debate and you'll often find "principles and pride" at stake. The truth is nobody wants to be the buyer that "overpaid" for a home.
To which I must interject that prospective Buyers don't "overpay" - they pay the going rate. Given the best information and the resources at hand, even homeowners who bought at the height of the market in 2005/2006, paid what the market would bear. It's only in hindsight that Buyers or Sellers have the track record and the luxury to reassess value.
So when I'm asked, "How much did the Seller pay for the home?" I know that my next sentence is going to be about how irrelevant that information actually is. Not that it doesn't help inform your offer (it does) but that it tells you nothing about current market value OR what it might take to actually secure the home. In terms of pricing a home, it's an inexact science at best. List prices are nothing more than our best estimation, based on recent sales nearby. Asking prices are by no means, an exact measure of value.
So don't measure the value of a home based on its list price (or what the seller paid). Many homes are set artificially low to attract multiple offers, while others come to the market way too high - usually at the request of the seller. In neither scenario, does the "list price" represent the true market value of the home. The current market value is always determined by what a willing and able buyer will pay for the home at a given point in time. Judge the home by its value to you!
Does it meet your needs? Does it solve your house-hunting dilemma? How long will you be living in the home? What can you afford? Do you desire it more than the next buyer does and are you willing to pay more for it?
It's of no value to you - the home buyer - to write sharp offers that never get accepted just to prove a point (or as my Yiddish mother-in-law frankly states, "Sometimes you can outsmart yourself right out of the deal"). At the expense of your own ego, perhaps it brings more value to the process to set pride aside during the transaction and achieve the intended goal of home ownership instead. Yes?
So check your pride at the door, listen to your agent's suggestions, expand your thinking to encompass the long term (think BIG picture) and focus on the best course of action; one that ultimately brings you the desired result - a new home!
Julie Gardner, has been writing The Perspective for 18 years and has published more than 750 humorous but always informative, essays on life and real estate.