Clients need honest assistance now more than ever

By
Real Estate Agent with RE/MAX Concepts

Sadly these days America is scandal central. It's hard to read through a publication such as The Wall Street Journal, or the average local paper for that matter, for even one day without coming across a story about how some other fund, fund manager, investment adviser, development group, builder, contractor or other assorted cretins have absconded with a large sum of money leaving untold victims in their wake. The dollar total alone is staggering but the human cost is immeasurable.

In this market we've had several large developers go under, leaving piles of liens and unpaid loans in their wake. Several took out development loans or received money from homeowners or services from contractors and simply walked away with the cash, forget the pretense of business expenses. To me there is a crisis of conscience here. It seems like some well placed folks lost theirs or just plain never had one.

I list a lot of property and therefore meet a lot of sellers. Many are very beaten down. They might have lost jobs, spouses or suffered a demotion or transfer. I can almost script their disappointment when I tell them what their home is worth now. This economic crisis appears to be falling particularly heavily on the shoulders of the American homeowner. This shell shocked soldier of the new American economy has no foxhole to duck into, unlike those at the top who jet off to count their cash in Barbados, the Caymans or Switzerland. These people are stuck and don't think it's right to just burn their house down and run away.

The temptation is always there for the listing agent to look at older comps and try to figure out the best pitch to get the listing. In an unstable market where little is selling, doing good CMAs can require as much work time as I used to spend when I was a rookie because you look so hard at the very few comps, or go farther afield to find any sales. In this market however I've found that rosy prognostications should be discarded and clients need to be given the realities:

1.) You're not selling against your neighbors, you're selling against the banks, or asset liquidators for failed banks  2.) Prices are not stable  3.) Sellers must market condition their homes 4.) You may need to take a loss to sell even though you've been in the home ten years in some cases. 5.) Your home might not sell anyway.

I don't list foreclosures so I'm feeling the pain of the resale homeowner. Retail product has to fight fiercely against distressed sales and often loses anyway. Buyers have been militantly conditioned by the media and our industry to adopt a take no prisoners approach. In the midst of all this we need to try to make a living, be able to look at ourselves in the mirror and serve our clients well.

 

Comments (12)

David Ravashiere
David Ravashiere, Tee 2 Green Real Estate - Chandler, AZ

Matt -- I find it very hard to remain emotionally detached from Sellers.  It breaks my heart to see someone who has to sell with their back up against the "value" wall.  Before I take a listing on a home that has lost most of its value I actually try talking the Seller out of listing the property right now.  Unless someone has to sell ... it's better to wait.  As long as they can afford to remain in their home they'll have a lifeboat that will never sink!

Mar 31, 2009 07:22 PM
Matt Grohe
RE/MAX Concepts - Des Moines, IA
Serving the metro since 2003

Tee 2 Green: Thank you for your comments. I do the same, but some folks must sell to get out from under. Best,

Apr 01, 2009 03:46 AM
Rita Bradley
Laguna Hills, CA
Valuation Consultant in Orange County California 949-916-3263

Matt I love this post and I'm going to point my small sphere of influence toward it.  I've added you as an associate and look forward to your future blog posts.  Rita

Apr 03, 2009 06:02 AM
Matt Grohe
RE/MAX Concepts - Des Moines, IA
Serving the metro since 2003

Rita: Thank you for your comments. In a world of turmoil may you be at peace.

Apr 03, 2009 06:14 PM
SarahGray Lamm
Allen Tate Realtors Chapel Hill, NC 919-819-8199 - Chapel Hill, NC
Realtor - 100K Hours of NC Real Estate Experience

Matt - I am grateful not to be in such a 'dire straits' market but your clients are surely grateful to have you telling them the straight story. You are so right about the 'take no prisoners' attitude' of buyers. It's a hard pill for sellers to swallow even in a comparatively stable market like mine. You're doing a great job...and the right thing!

Apr 13, 2009 11:08 AM
Matt Grohe
RE/MAX Concepts - Des Moines, IA
Serving the metro since 2003

Sarah: Thanks for your comments. We're starting to see some movement of affordable homes but we're still way down off normal sales volume market wide. In our downtown area we have about a four year supply of condos if you look at absorbtion rates. Glad to hear you're doing well out there.

Apr 13, 2009 05:02 PM
Maureen Bray Portland OR Home Stager ~ Room Solutions Staging
Room Solutions Staging, Portland OR - Portland, OR
"Staging Consultations that Sell Portland Homes"

Matt ~ You've written a good post about the reality of our current real estate market.  So much uncertainty at all levels.  However it's good to know that you believe in maintaining honest communication with your clients.  Continued success to you!

Apr 23, 2009 05:55 PM
Matt Grohe
RE/MAX Concepts - Des Moines, IA
Serving the metro since 2003

Maureen: Thanks for your comments. I have lost some listings lately because I wouldn't overprice. That's the way the cookie crumbles, gives me more time to handle buyer prospects emerging from years of efforts. I try to check my coat at the door, not my better judgement.

Apr 23, 2009 06:03 PM
Regina P. Brown
MBA Broker Consultants - Carlsbad, CA
M.B.A., Broker, Instructor

Honesty pays.  Both buyers & sellers appreciate it!

Regina P. Brown, serving California Coast & Country areas

Apr 24, 2009 09:26 AM
Nate Rowe
Oakstone Properties, Homes in Richmond VA - Richmond, VA
Realtor, Homes in Richmond VA

honesty is very important.  I am building my business on honesty and customer service and I am glad to see you are as well.  Thanks for the post and you couldn't be more right.  i wish you the best.

Apr 24, 2009 03:21 PM
Matt Grohe
RE/MAX Concepts - Des Moines, IA
Serving the metro since 2003

Regina: On the whole I'd agree. Seems like buyers appreciate it alot more than sellers!

Nate: When you tell it like it is you're always on message. Thank you for the encouragement.

However, what folks may need and what they want, now that's a different story. Even if I tell sellers that the comps show homes are selling in x to x range, but you could list for your price, not what the comps say, they seem to go for the pitch that's the highest. Oh well. What was that Gloria Gaynor said? "I will survive."

Apr 24, 2009 05:10 PM
Ann Hayden 636-399-7544
Berkshire Hathaway HomeServices Select Properties-St. Louis Missouri - Chesterfield, MO
SelectAnn.com

Matt,

This market is full of emotion and depression....  I wish I had a penny for every time a seller has said, my home should sell for $XXX,xxx.  When in reality it might not sell at all.  The foreclosure market is hurting everyone.

Ann

Apr 25, 2009 05:02 AM