I have worked my neighborhood farm successfully for well over ten ears. I have dropped notepads and flyers, sent Just Listed and Just Sold postcards, held open houses-you name it. They know me. I recently got a call from someone looking to interview agents to represent them in the sale of their mother's house. They chose me, but wanted to clean up the home and not sell until October. They also owned a rental which they hadn't really discussed with me, other than to tell me that they had one. As would happen, I had a buyer who had been looking for just this kind of home-a second home in a great location near the beach. I approached these sellers, told them of my buyer, and gave them a market analysis of what the property would probably sell for were it to be listed in the MLS. Here's what happened:
•· Immediate reaction was, what kind of commission would we have to pay you. You have no marketing costs, and it's a quick easy sale. Never mind that it has taken me over ten years in the trenches to know the neighborhood and be able to put buyer and seller together. My value is in my knowledge but this just seems all too simple, After negotiating the commission down by a third, I felt pleased that I was able to offer them a better return, for I guess less work for me. I'm okay with that. Most of the public thinks that real estate people make too much money anyway.
•· Next came the offer. I came up with a price which I felt the house would sell for based on recent sales of comparable properties. They were appalled at how much less it was than what the house had appraised for in 2004-about 25% less. Which is about par for what has been happening in our market. They did their homework and actually looked up all the homes and their location. Their conclusion was that really their location was far superior to any of the others, and that it was worth considerably more. It didn't matter that the house needs major upgrading-built in 1965 with none or very little in upgrades. The price was increased by about 8% of what I had quoted. That's okay-it's their house. I started to feel like they were accusing me of trying to price their home too low just to make a quick buck. What I heard a lot was "We haven't even put the house on the market yet and they are offering us this much". They felt that there were a lot of buyers out there standing in line to buy their home the minute it came on the market. No way to prove them wrong. In fact they may be right.
•· Buyer was disappointed to hear that the seller wasn't willing to "budge". They felt that the sellers wanted it their way or the highway. Buyers and sellers both look at negotiations that way. It's like if I come up this much, then they should come down this much. There really is no shoulds in the process. It's about whether or not the buyer and seller can agree on a price. If not, then one of them walks. I'm really kind of tired of hearing this conversation. Of course my job is trying to get them together on a price that makes sense to each of them. I guess that's what a sale is all about. But now that the buyer (who has fallen in love with the house and wants it) realizes that he has to pay a little more than what we figured was the current market value for the house, he wants someone else to fix this problem for him. And guess who that person might be. Yes. If I cut my commission, everyone is a winner. I have a quick sale, the seller is happy and so is the buyer. I asked him what about the service I provided in this transaction caused a pay cut for me. He stopped asking. Well not really. He made a few more attempts. I never knew that part of my job description was to make up any shortfall in price. I believe that this perception is more prevalent than we think. If I didn't believe that I brought to the table superior service by finding this home I may have succumbed to his request to cut my commission by another half percent. But we do provide a valuable service.
The transaction is proceeding, but very carefully.