Peyton Manning or Mark Sanchez? Who do you want leading your team down the field with two minutes to go and the game on the line?
If your follow the NFL at all, the choice is probably pretty obvious.
Then why do some many home buyers and sellers choose to bring in their own “Mark Sanchez” when it comes to buying or selling a home?
I’m telling you, it is nothing short of amazing when you start to measure the distance between those who know what they’re doing and those who do not in the game of real estate.
Part of the difficulty for consumers goes to the issue of transparency… for years, I have advocated for full public disclosure of agent sales production. But because the MLS is technically a “private organization” (like a golf club or special interest group) and not subject to public domain, the members (agents) of the organization get to set the rules about disclosure. And year after year, the majority of agents vote to keep individual agent production hidden away from public view.
Why? The answer is obvious. In real estate, 20% of the agents sell 80% of the homes. So the vote to “disclose” by someone selling 35 homes a year is effectively cancelled out by the part-timer who sells two. Hence, no disclosure to the public.
I once sat down and brainstormed “100 Ways to Kill a Real Estate Deal” as a means of illustrating for my buyer and seller prospects all the ways well-intentioned real estate transactions can come off the tracks.
It really is quite a list. You can review it by clicking here.
The point is, many of the most common derailments of a real estate transaction are avoidable. I recently came very close to writing an offer for a buyer on a home which had $132,000 in (undisclosed) IRS tax liens. The listing agent, who sold three homes last year, had no idea that the liens even existed until I pulled an Ownership and Encumbrance report (which does cost money, which is probably why he didn’t do it) and pointed it out to him. Next.
I recently was involved with a complex “For Sale by Owner” transaction which involved an estate sale. I had buyers who saw the FSBO sign in the front yard and asked me if I could help them. I did, only to discover that the lady who owned the home had actually apportioned the ownership interest in the home into five separate and equal shares (one for each of her adult children) right before her death.
That meant five separate sets of negotiations with five grown adult heirs in three different states who had very different ideas about what the home was worth and what kind of condition it should be conveyed in… which I persevered with and successfully completed (negotiating a commission along the way) because that’s what my buyer client wanted.
Negotiation is another critical aspect of a real estate transaction. To use the football analogy, think of it as play calling.
Less skilled agents tend to stick with one play. Perhaps it’s the three-yard plunge up the middle. Perhaps it’s the 50-yard bomb. But whatever it is, they tend to revert back to it again and again.
Successful play calling, however, requires creativity, strategy, skill and execution.
One of the strategies I consistently use in negotiation (I’m giving away secrets here) is that I often try to do the other agent’s job for him. In other words, if I have a buyer and we’re asking for repairs during the inspection process, I bring contractors in to document the problem. I obtain bids (sometimes from multiple sources, all of whom I trust) for different levels of repair. I then present a couple of pre-packaged “solutions” to the seller’s agent – ones that have been researched, priced, documented and which are presented in a highly organized way so that all the seller has to do to keep the deal moving is say “yes” to one of my pre-determined solutions.
Is that more work? Yes. Does that take more time? Yes. Does it require more skill? Yes. Is it worth it for my clients? Absolutely.
Foresight is better than hindsight. Strategy is better than reaction. Skill is better than luck.
So back to the original question. If the game is on the line and you have one chance to win, who do you want quarterbacking your team? Someone with 20 years of experience and the highest credentialing in the business, or someone who just wandered on to the field and picked up a helmet?
Whether you are buying or selling a home, the decision you make is often the difference between the thrill of victory and the agony of defeat.