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.
