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Warning: Truth Could Be Dangerous To Agents' Business

Is telling the truth in real estate all it's cracked up to be? Remember the classic scene from "A few Good Men" when Jack Nicholson (as Col. Jessep) shouts at Tom Cruise( as Kaffee ) "You can’t handle the truth! " in response to Kaffe's request :"I want the truth! ". Are real estate sellers now similar to Kaffe? They want the truth but "They can't handle it!!".

To be clear: I completely reject the warning of this post title. l will continue to tell the truth, no matter what. And I am learning valuable lessons from this experience.

I recently "lost" several perspective clients on account of them not liking my message.

This is what happened in a nutshell. Mr. X contacted me to sell their house in town A. The sellers believed their house was a high end property. We discussed the market and I showed them the statistics indicating:

There was only one sale of $2,000,000+ in this town.
There were many more sales in this price range in the neighboring town B.
I explained that when real estate buyers evaluate where to buy, preservation of capital and risk management are part of the consideration. Although for the same money in town B buyers could get less then in town A, if buyers view town B as a safer investment, they may choose to buy there.
Mr. X indicated there was no financial pressure for them to sell. I suggested to hold off on the sale for a few years and rent the property in the meantime.
If they wanted to sell now I suggested things that could be done to make the house look better.

Truth telling did not bode well for me in getting this listing.This information was interpreted as me being negative about their town and their house. I am not sure if a real estate agent with "Better" news about luxury real estate in town A was received better.

I made a rule at the start of my career as real estate agent in Princeton area to tell my clients the bad and the good of the real estate market - as I see it. This knowledge, I thought, is:

Why sellers should pay money to a real estate agent;
What should help them price their home right from the outset;
Market it in a way that beats competition;
Negotiate the best selling price;
Deal with many problems that invariably come up during the selling process.

I was proven wrong.

Why do I still insist on telling the truth? I am content with my old rule, even if on occasion I may "lose" some business, because:

The stakes are too high when buying or selling real estate to sugar coat what is happening.
It is not productive to repeat the gloom and doom scenarios offered by the media, if that is not what is going on in the local market.
The only way to deliver useful information to buyers and sellers is for the agent to know the facts on the ground.

Get smart by knowing exactly where you stand in this market. Only then could you make the right decisions. That's my best advice for the real estate buyers and sellers now.

Not surprisingly, my clients are the smartest of them all. To get the best deal or to sell at the best price, they are not "afraid to handle the truth" .

Posted by Faina Sechzer - Princeton, Montgomery, Hopewell, NJ Real Estate Expert on 01/30/2009 10:46 AM

Comments (27)

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27 Comments on Warning: Truth Could Be Dangerous To Agents' Business

JAN

Faina, I just had a conversation with someone about this yesterday. If we're honest, does the seller just view us as being negative without a "can do" attitude? I try to be as positive as possible, but have to be honest. The facts IS the facts....;-)

I can't think of any other way than to tell the truth. I have to live with myself, and I need beauty sleep. So we don't want to disrupt my sleep. I disagree with you. My clients are smartest:-)

Except, I have an issued with media and how they use real estate stats. I may spend hours undoing damage done by media statitstics. Sometimes I need to demonstrate how stats, reports, and figures can be doctored to tell different stories.

For example "DOM" is the biggest joke. Rarely does the "DOM" include properties that changed agents and/or received a new MLS # for some reason. That alone can skew our stats and raise falese expectations.

There is no other way to do business in my mind then to tell the truth. I could not sleep at night if I did not do just that. Keep it up....It is people like you that give Realtors a good name!!

Happy Friday!!

Coleen - I reconciled to the fact that not everyone could handle the truth. The clients that can, are happier in the long run. And I can sleep at peace, well almost:)

Suzy, I agree with you: I need my beauty sleep as well. And I almost get it:) As to who's clients are best, I'll ask mine what they think:)

The stats are something that I try to bring in my blog. Just because it says DOM= X doesn't make it so. Although our MLS is trying to improve on it buy giving us the PDM -Property Days On the Market, which includes all listings for the property within 6 months. Unfortunately it's not reported in our stat reports.

My sympathy on that one:)

Lori,

"It is people like you that give Realtors a good name!" - you made my Friday:) Thanks.

Faina-

I have had battles w/several clients lately and you are correct in saying they think you are being "negative" when you state the truth about the market and about their home. I have tried to say it differently and in different tonalities, but there is no nice way to tell a Seller that his property is now worth 50% less than what he paid for it! It is a shock, for sure. BUT, they do remember the "truth-tellers" and honesty will win out in the long run.

Faina -I couldn't empathize more with you. As a fellow Sotheby's representative I get many calls from sellers who think that just because "Sotheby's" is listiing this house that we will be able to get more money for them...I have to explain I can introduce thier property to more buyers (especially on the international stage) however the market, combined with great staging will determine what the house is worth. I would rather let another agent have the listing and pick it up a year later when the seller realizess that my advice was solid.

Congratulations on the featured post! I hope to meet you in May in San Diego.

Faina, I see this all the time... You are so right... there are agents out there that are more than happy to tell sellers anything they want to hear to get their listing. I vote for the truth always.

Good for you for sticking to your guns! It's difficult to deliver news that folks do not want to hear.

You are by far one of the best, honest and ethical agents in New Jersey! I am so proud of you!!!

BTW, I flagged this for a featured post.

anything less than the truth is a disservice to the seller. whether they want to believe it or not is up to them. In this market, Also, if youtake an overpriced listing, its the surest way to go out of business. spending time and money trying to market what wont sell.

There are, or have been, enough individuals in our business that would "lie when the truth would sound better". Hasn't our industry taken enough of a beating. It's up to us to set the standard of honesty everyday in all we do. Thanks, Faina, for the positive post.

Not surprisingly, my clients are the smartest of them all. I like that line!

I have felt that some sellers might feel I am being negative when I'm just trying to interpret the facts to them. I'm sure they can't believe it when I refuse to take the listing at their price. I lost count of how many listings I walked away from that are still on the market, some for more than a year, with the agent(s) that took it just to get a listing. Must be fun dealing with those sellers now.

JAN

Judy:

I refused a listing that was priced about 40% higher than the competition and the Seller was amazed that I wasn't even going to "try". I kept on explaining to him that I am not a magician and that "trying" would not increase his home's value. He was really angry at me, but I know somewhere deep in his mind he won't forget my honesty.

You were proven wrong? No, I don't think so. You're still right, but your prospects were delusional. Some are, and you have to let them go.

As Tracy said, list it next year. They'll be better to deal with after they've learned the truth via the school of hard knocks.

When I was selling I had to compete against agents who would tell the sellers anything they wanted to hear and list at any ridiculous price. Like you, I felt let down and unhappy when I didn't get the listings.

But... I knew that I'd feel a lot MORE unhappy if I took the listing at the wrong price and then had them berating me and telling everyone in town that I couldn't do my job because the house hadn't sold.

For some, integrity is a word to use in advertising, for agents like you, it's a facet of character. Good for you for hanging on to it!

As a real estate agent we are not doing the seller or ourselves any favors by telling them what they want to hear. You will spend the entire listing period with an upset seller and you will soon find that you have wasted everyone's time. Every listing I have lost to an unrealistic seller by telling the truth ends up being a listing I would have most likely lost anyway. t is our responsibility, period!

I recently lost a listing because the other agent was "more positive". Unfortunately, the numbers that told the truth showed declining prices and lengthening days on the market. Because this was a relo listing, these sellers have the additional burden of a shortened selling time and a relocation appraiser waiting in the wings where the price is likely to be even more "negative" than mine. Will I change my presentation to tell sellers what they want to hear rather than the truth? No, because I don't want to have to deal with them asking why they aren't having any showings or offers. That would be my fault too in their eyes. I want to be able to sleep at night, just like you.

My latest experiences have been: Regardless of the facts, sellers still think their home should sell for a higher price than any other nearby sale going back several years. Buyers think they should offer maybe 70 cents on the dollar and that the sellers should jump at their offer.

Damned it you do, damned if you don't. If you took the listing you would just beat yourself up on not getting it at the correct price. Double edged sword. Realtors should stop falling on their swords but that is easier said than done. Come on, don't you know their house is 'special'. You did the right thing.

Faina,

You are so right! I went on a listing appointment and told the home owner they had it listed to high. About $15,000 to high. This home was purchase by a investor, the home had been in a fire. The investor remodeled and was trying to flip the property. He had done a wonderful job on the remodel, but the neighborhood had suffered some low comps recently. I told him that he needed to get a structural engineer report to put the buyers mind at ease. There is so much on the market and so few buyers right now. He only wanted to give me the listing for 90 days. I would not list it for that short of time period. When the days on market are 150. I was not going to waste money in marketing when it was $ 15,000 dollars over priced and a 90 day listing. He listed with some one else. I would do it all over again!! I was honest and when the property doesn't sell he will call me back. The listing already had two Realtors before he called me.

Stacy Lyons

Ronck Realty

Great post, truth is the only way to fly, if they don't like the truth they are not the kind of people you want to work with anyway. Leave a lot of business for others that way but life is a lot better too!

Faina, you're right and it's very important to tell the truth. The hard part is how to handle the delivery.

Your post is right on the money. I was actually asked to leave the seller's home because first of all he did not agree with the commission and lastly sputtered in my face when I gave him the price. I did want this sale more than anything, but his rude behavior was unacceptable. I left like a lady and I don't regret it.

FEB

Faina, I think in ANY business it is important to be honest with your clients--even if it's not what they want to hear. They called me in for my personal evaluation and perspective and I'm going to be honest with them--it's the only way I know how to be.

Carol

Truth will always win out, but when you get people who rather live their entire lives in denial over their finances, relationships, family issues etc. it is very hard to do business with them. Their reality is not the same as yours and mine and "honesty" in any form threatens their "peaceful" existence. I see this every day. These folks often have friends who lie to them all the time to keep them happy. When a Realtor approaches with the truth, beware of their wrath...you are negative, and evil and they do not want to do business with you. I have seen friendships dissolve over the truth being uttered. Life in LA-LA land is alot less stressful!

FEB

Well, sellers can interprete the message wrong. I've been interviewed several times where they complained the other agent didn't like their house. I always focus on the data, if they can't hear the truth on that no need to go into everything that needs to be done. They will find out soon enough when if doesn't sell that you were right. Wait til the feedback starts coming in.

I believe just like you do. Be honest. That is the best policy.

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