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!
Several summers ago my older son (anxious about an upcoming backpacking trip in Yosemite) complained so loudly and incessantly, that an alarmed camp counselor called me (after a pre-registration conversation) to say that the camp was "no longer certain that my son would make a good candidate for the excursion." Yikes!
Upon delivering this unsettling news, my reluctant teenager had a rapid change of heart. Suddenly, he didn't want to be the one missing out or the one left behind. It's been my experience that it is always much easier to do the rejecting then to be the one rejected (my high school prom notwithstanding). None of us likes the feeling of being passed over, or of not being good enough, and we sure don't like it when it's our home that gets "passed over" (or our kids for that matter).
Of course, at 50, the realization that "popularity" often comes with a price, is much easier to live with than at 15. At 15 (16, 17, 18 . . .) rejection seems so devastating and so stigmatizing. (It isn't but for better or worse, rejection is part of life.) Still, even the most seasoned agents aren't immune to rejection.
It stings when you lose an opportunity that you feel you have genuinely earned and rightly deserve; clients you have serviced for years, buyers you have helped for months, or sellers you placed into their homes previously. In a challenging economic atmosphere, agents aren't only in competition with one another; increasingly we're in competition with unrealistic Seller or Buyer expectations as well (a much tougher foe to conquer in many instances).
It's common knowledge among agents that sellers select their representatives for one of two reasons: 1) they'll either choose an agent/broker firm by reputation, or 2) they'll pick the highest suggested selling price! (These aren't automatically incompatible by the way, but usually they are.)
Nearly every Seller believes the rules of the marketplace apply to every other home but theirs. And when a competing agent arrives and confirms an unrealistic price point, it can be incredibly flattering to feel your home can demand a higher price than market performance might suggest. It's easy to get sucked in, but the odds of selling your home for more than the market will bear, are NOT in your favor.
Homes perceived as overpriced in our market generally sell for 9.5 % -20% LESS (!) than those that are sold within the first 21 days and it isn't uncommon to watch as homes get discounted by hundreds of thousands of dollars in our high-end marketplace with each passing month.
Alternatively, Buyers who zealously offer more than the market will support, quickly back out with cold feet and the Seller finds himself with a "tainted listing." Once your initial listing price has been reduced and reduced and REDUCED - to a place where it finally meets market demand - you are typically selling for a rock bottom result. How good is it going to feel then?
So before selecting a REALTOR based on price alone, ask him or her for their company's track record, for "days on market," statistics and for "sales to list price ratio" (Results are easy enough to produce.) With facts instead of feelings sharply in focus, you should be able to make wiser choices about what is true and what is real - REALLY!
Does the truth hurt? Yes, sometimes it does but an unrealistic price point can stigmatize your home faster than any agent ever could. (Believe me, it is often as tough for agents to deliver sobering news, as it is for you to receive it.) Hearing a price that is substantially below your hopes, desires or needs, can feel like the ultimate rejection - as if the agent doesn't believe in your home - when in fact, just the opposite is true. Realistic pricing is your greatest opportunity at achieving the highest and best result.
And isn't that the better choice? Isn't that the desired goal? And aren't you depending on your agent to help you honestly assess your risk and navigate you future? (Yes, you are.) Ask yourself this. "If I take price off the table," with whom would I rather work? There's your answer . . .
No, your home isn't being rejected - far from it. A top performing agent's job is to make sure that your home ISN"T getting passed over - OR being left behind (which may require prompt price reductions - sorry, but that's the market reality). It's not about being popular. It's about being honest. If Real Estate agents have no integrity around the delicate issue of value and list price, your home is in a much tougher position than just growing stale on the market. Moreover, you are likely to have a very disappointing result and that's nobody's intention - least of all yours.
How does that feel? (Not great.)
When it comes to homes, or REALTORS, (or backpacking trips for that matter) it isn't about feelings, it isn't about ego, and it most definitely isn't about appearances - it's about results!
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.