Let’s face it, if you are in the market to buy or sell a home as we approach 2009, you are either the hunter or the hunted. You are in financial disarray or you are seeking to exploit the struggles of another. I say this without judgment. A transaction which involves the antithetical goals of two or more parties is replete with advantage seeking in the best of times. Amidst unyielding economic turmoil, that truth is only exacerbated.
We all want leverage.
With apologies to Jennifer Allan, you might call it the age of "Selling with Sole." We use the foot of information to kick the other guy's chicklets out.
Buyers who may have already had their noses bloodied as sellers, look to bloody the nose of the next guy to bring a certain “circle of life” equilibrium to their experience. Sellers eschew the fistful of comparable sales of similar properties at considerably lower prices because they are “distress situations.” Rather than acknowledge that buyers do not care whether a bank or an actual person owns the home if the condition is up to par, they would create their own version of value by completely disregarding the vast majority of recent sales. They cling to the one sale down the street from six months ago which has been obsolete for 5 and a half months now.
Doesn’t work.
Real Estate agents leverage their branding to make themselves crucial to the process. Some lean on their experience and past production, while others repackage themselves into the “short sale” or “foreclosure” experts who own the only skill set in town that will produce the desired result.
Banks sit on the offers they receive … on second thought, forget about the banks. These bozos live in a zero gravity bubble. Just when you think they will yield to the laws of science and common sense, they get a direct cash infusion from our depleted pockets. Gee, that should really provide an impetus for speeding up their approval/disapproval process. Cash comes in as the losses pile up. Why do I feel like I have been washing my toes in the prison shower for the past six months?
It’s a jungle out there. It’s dog eat dog. It’s Real Estate.
Nothing really changes in this industry except that the shiny, happy facade of all parties standing around a lukewarm campfire singing Kumbaya has been supplanted by overt motive. What we have always known to be true is exposed in the light.
There are winners and there are losers. The “win-win” scenario may not be an outright fallacy, but one party wins more than the other. Always.
Now that we have that little Utopian misconception out of the way, the question becomes, how does one gain the leverage necessary to produce victory?
Knowledge.
Nothing more, nothing less.
How long has the seller owned the home? Does the seller have multiple liens on the property? What banks hold the notes? Does the listing agent submit one offer at a time to the bank upon seller acceptance or all at once?
Is the home really a good value, or is the buyer getting in over his/her head by the allure of the promised grift to be had in a short sale or foreclosure scenario? Can the buyer reasonably expect to knock 10% off of a list price that already has the bulk of its value built into the price? Is it a great buy to knock 20% off of a home that is priced 25% over market?
Bottom line, folks, is to ingest the stats that we are all force-fed by the papers and market watchers, and then completely disregard these misleading “rules of thumb.” Every single property is unique and is surrounded by unique factors.
The seller gains traction by enlisting the professional service of an agent that is as familiar with the product (the home, community, etc) as with the actual process. It does little good to hire the fast talking “short sale specialist” from the other side of town simply because he hires a third party to actually negotiate with the bank for him.
The buyer gains leverage by enlisting the professional service of an agent who recognizes the difference between price and value. “Cheap” does not always translate to a “good buy.” A buyer’s interest is likewise not served by frittering away valuable time on pie in the sky short sale offerings which don’t have the least modicum of chance at actually closing. Only when the wheat is separated from the chaff should you look to remove more chaff.
The agent gains traction in this market by acquiring the knowledge which will help buyers and sellers reach their goals. Slick new designations and branding/labeling efforts add little, if any, value to the actual service. Become more familiar with the product you wish to sell and with the rocks that need to be turned over to deliver more accurate assessments of value and negotiable strength. Good agents are more necessary, and charlatans more dangerous than ever. With people losing their houses and buyers leery of jumping aboard a sinking ship, this is no time for the prototypical salesman, nor the "happy, happy, joy, joy" delusionist who would harm their client by being too empathetic and amenable to the needs of the other party. We owe the other party fair, ethical dealings, but we owe our clients our undying loyalty.
Protect your clients or leave the business.
*I don't know if this was a mission statement, industry confessional or a rant. Thanks for reading the rambling, disparate thoughts of a market addled mind. ;)
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If you are planning to buy or sell a home in the Scottsdale, Phoenix or Paradise Valley area in the near future, drop me a note or give me a call. We’ll see if my skill set and knowledge are sufficient for your specific needs. If not, I'll be the first to point you in the direction of a better weapon for your impending battle with a post-bubble world.
-Victory!!!
