Real Estate Buyers and Sellers and ALL of Our Prevailing Attitudes

By
Real Estate Agent with Florida Property Experts
                             Real Estate Buyers and Sellers and The Attitudes of People Today

Realtor and real estate buyers and sellersToday I’m going to tell a real estate story. This is a story of a hypothetical real estate transaction, and the parties involved. I chose to tell this story in a manner that is obviously slanted toward one side, but that’s not really the point. It could easily be told from a different angle. Regardless, don’t get overly focused on the story of real estate. It’s about people. It’s about attitudes. It’s about the way people have changed in the last few years. It’s about the kind of person you are, or want to be... or DON’T want to be! Hold onto your seat and remember this is hypothetical, but also do some introspection!      ........................................

In today’s real estate buyer’s market, with many “deals” to be had, many buyers are looking for a “steal”.  I’m sure most real estate agents are aware of this. But there’s a big problem in this area that is getting bigger every day...  There’s a difference between a “deal” and a “steal”. And with real estate values leveling out, trying to get a steal typically offends a seller, and can lead to a stalemate.

Let’s think this through... Sellers are having to sell their homes for much less than what they paid. It’s a horrible position for these sellers to be in. They know they’re already having to give real estate buyers a deal, and they’re not exactly thrilled about it. It’s not that they don’t know that the market has drastically declined. Most sellers have resigned themselves to that fact. And the sellers who are listening to the advice of their REALTORS®, have priced their available real estate listing in accordance with the current buying and selling real estatemarket value... which in itself is a “deal” for real estate buyers!

Now here’s the problem I’ve been seeing for the last few years, but most especially in 2009. Buyers want a “steal”! And sellers are willing (they have no choice anyway) to sell their property at a good “deal”... but NOT a “steal”! So along comes a buyer who, in search of a “steal”, makes an offer that offends the seller. After presenting this offer to the seller, the listing agent listens patiently as the seller vents their frustrations about the market, their loss of all their savings, their loss of equity, the probability that they’ll have to bring money to the table in order to sell their home (or whatever type of real estate investment they have listed), and the end result is that particular seller not wanting to work with the buyer who made the offensive offer.

At this point, the possibility of a successful transaction seems to be out of the question. But a good REALTOR® is usually able to reason with their client, along with giving them a little bit of time and space to think about it, and frequently the seller will calm down and decide to make a counter-offer that they’re not really happy about, but is at least closer to the amount they need to net.

So the listing agent now presents the counter-offer to the selling agent, who then presents it to the buyer. But the buyer is now angry. They want a steal! And now the selling agent listens patiently as the buyer gives all their reasons why they should not have to pay more than what they offered. frustrated about real estate negotiating

Most likely, the selling agent has already shown comparable sales of similar real estate listings that have recently sold, to the buyer before the first offer was made. If not, they would/should do so at this point. Assuming these comps have already been shown to this real estate buyer, the selling agent and buyers should now go back over the comps together and possibly narrow down the comps a bit more. They may even take into account the possibility that the market has not yet stabilized (if that area is still in decline). The selling REALTOR® will probably also remind the buyer that in order to obtain financing, the home/real estate listing will have to appraise. And banks are NOT currently lending money on real estate that leaves any chance that they might lose money on their collateral.

The process sounds stressful, but reasonable so far... doesn’t it? Well here’s where things get really frustrating. Bear in mind, the seller is still offended by the first offer. And the buyer is angry because they wanted a steal (not a deal). So the buyer ignores the comparable sales, and even the assurance that the potential real estate purchase will have to appraise. And the buyer makes another low offer on the already reduced price they got when the seller made a counter-real estate frustrationoffer.

When the selling agent presents this offer to the listing agent, these REALTORS® already know the stress levels are about to hit the fan... and we’re not even talking about a bank-owned property! You can triple the amount of stress and frustration for ALL parties involved in those types of transactions!

So the seller receives the new offer to purchase their house. Sure enough, this time the explosion is heard throughout the neighborhood. And again, the listing agent must sit patiently and wait for the seller to vent all their frustration. At this point, there may or may not be another counter-offer from the seller! Many sellers, after losing so much money, and doing all they can to not lose their home before having a chance to sell it; will channel so much anger in the direction of this particular buyer that they will not want to sell their home to them at all. And many times, this is where the negotiations come to a halt. However, the listing agent may be able to get the seller to make another counter-offer. Only this next counter-offer will most likely be only a hair lower than their last counter-offer. The sellers are nearing the end of their rope.

So the listing agent once again presents this counter-offer to the selling agent, who already knows that the buyer is also not going to be happy! And surely enough, we repeat the previous events... buyer yells and vents; selling agent refers back to the comps and reminds buyer that there will be an appraisal, and even offers to add a clause that the buyer will not proceed with the sale if the property does not appraise. But the buyer still wants a steal! stop........................................

OK. So I could continue on with the many possibilities that could happen from this point on. The sale may or may not reach a successful closing. But if it does (and here’s my point to all this), the only way either side of this transaction will be truly happy with this sale is if they feel like they made the other party “bleed”! You can take this entire scenario and use the examples in reverse. The events and outcome will be the same... people are no longer willing to compromise. And without compromise, there can be no successful negotiation.

I’ve heard many buyers say that they feel this way because of their inability to buy real estate during the sellers’ market. It’s that frustration that is causing them to be unyielding in negotiations. And most of us can understand a bit of that logic. But bear in mind, a property is worth whatever a buyer is willing to pay. And for several years, buyers were willing to pay exorbitant amounts of money so they could “keep up with the Jones’s”. And none of us can go backward in history, and change that period of time. We can only work with what is happening right now. And right now, many parts of the country have reached their leveling off point in real estate. Some areas are even starting to see an increase again. Every area is different, and REALTORS® must present comps to potential real estate buyers and sellers, on a “hyper-local” scale. If the comps are not there to support the price being asked, then that particular property is NOT worth the asking price! But if the comps ARE there, then the listing agent and the seller(s) have done their homework and priced that listing properly. Negotiating is to be be the change you want to see in the worldexpected. But they don’t have to “bleed” and/or give potential buyers a “steal”.

I want to reiterate that this entire scenario can be presented in reverse. I’m not trying to just pick on buyers. There are many sellers who have over-priced their listings, and potential buyers have every right to offer an amount that is based on current, comparable sales. But my real concern is the prevailing attitude among many real estate buyers AND sellers, that they will not be happy unless the end result was a “steal”. The prevalent ME, ME, ME attitude leaves no possibility for successful negotiations. Someone, somehow, MUST COMPROMISE!

One of my very successful clients, who at one time was near the top of the rankings in a Fortune 100 corporation, once told me that his definition of a successful transaction was... when both sides of the transaction walk away happy; feeling like they got a good deal. Neither side felt like they had been taken advantage of. Both sides had made compromises, and had reached a successful conclusion, and were now able to sit together at the closing table with no hard feelings toward each other....   I’ve always remembered that statement. It’s common sense. It’s logical. And it’s pretty darn close to The Golden Rule... "Do Unto Others As You Would HAVE THEM Do Unto You"!

So what has happened in society to cause so many people to be selfish, unyielding and even downright rude? I’m not talking about just real estate here. I know that times are tough. Just ask any real estate agent, mortgage broker or lender, home inspector, title company, appraiser, surveyor, stager, or anyone in the real estate industry.... or anyone in any type of sales, for that matter, because that’s what I’ve been doing. I’ve been asking. And I’m getting the same story all around. When it comes to buying, people today are not happy unless they feel like they really “got one over on them”. And that’s the story they want to be able to proudly tell to anyone who will listen!

So what is my reason for writing this post? I’m hoping it will cause each of us to take a good look inside ourselves and do a “pride” check. Are our actions displaying “haughty” (prideful-not in the good way), “selfish”, “self-centered”, “ugly” behaviors? Or are we acting in a manner that is “kind”, “compassionate”, “understanding”, “giving” and willing to see things from the opposite perspective?

What kind of world do you want to live in? Because it all starts with you, and me. This is not about a little story of real estate buyers and sellers. It’s about people. It’s about compassion. It’s about being the kind of person who will bring about positive change in this world.

I know what kind of person I want to be. How about you?

"Be the change you want to see in the world."

www.DaytonaBeachRealEstateSales.com

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Lisa Hill Daytona Beach native and real estate agent

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Rainmaker
1,142,607
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Sounds like an awful lot of emotions to have in a real estate deal. I've always felt my job was to get the emotions out of the way so we can take care of business. Some deals just aren't meant to be. If the buyer and seller can't come to terms then so be it. We just find another buyer. No biggie.
Dec 24, 2009 02:52 AM #9
Rainer
162,981
Trisha P Realty Group
Realty Executives - Leavenworth, KS
"Holding the Keys to Your Dream Home"
So true! I gave a a few listings that are priced according to comps. I have recently gotten 2 offers on 2 different houses that were 30-40k below asking price. Which of course offended both sellers and went sour from there. Needless to say neither sold.
Dec 24, 2009 03:02 AM #10
Rainer
14,839
Daniel Bretzke
Better Properties RE Seattle King - Seattle, WA
Daniel P Bretzke

Nice post.  There are a lot of emotions in real estate transactions.  What is being sold is often more than just a place to live, but a dream and a security blanket.  When dreams are dashed and the blanket is ripped away, then people do get emotional. 

 

Dec 24, 2009 03:17 AM #11
Rainmaker
131,383
Karen Pannell
Real Living / Home Realty - Owensboro, KY
Owensboro KY Real Estate -270-903-2167 Homes, Cond

As professionals, it's our job to to minimize emotions and focus on the facts of the market.  Sellers are not forced to accept any offer.  I recently sold a piano for about half of what I was asking.  But after trying to sell it for a year and getting no offers, I realized this was my buyer and I took the offer!

Dec 24, 2009 03:29 AM #12
Rainmaker
232,107
Emily Lowe
The Lipman Group | Sotheby's International Realty - Nashville, TN
Nashville TN Realtor

Buyers right now are truly wanting to get a nice house for a steal.  There is another post today talking about how foreclosures are always trashed.  And, of course, those buyers don't want to have anything to do with those houses.  But, at the end of the day, it is the seller's decision.  I always want a peaceful, win-win transaction but that just doesn't always happen.

Dec 24, 2009 03:55 AM #13
Rainmaker
175,930
Wendy Rich-Soto, Realtor/Broker Associate
Keller Williams Realty, LA Harbor - San Pedro, CA
Getting you to your next with a zero failure rate!

The only way the steal happens in LA right now is if it is a traditional sale and a seller has a ton of equity, is in a huge hurry to sell and they are the only offer.  Probably less than 1%!  People need to get realistic.  If they wanted a steal they should have bought 18 months ago!

Dec 24, 2009 04:06 AM #14
Rainer
82,302
David J. Lampe
Your Castle Real Estate - Arvada, CO
Realtor - Web Savvy Denver

I have a buyer right now who is looking for a steal which isn't always easy to find.

Thanks for the post.

Happy Holidays!

Dec 24, 2009 04:10 AM #15
Rainmaker
101,632
Matthew Naumann
Exit Realty Charleston Group - Goose Creek, SC
Goose Creek, SC Real Estate Agent

Lisa,

Great Post.  I agree a lot of buyers want a steal.

Thanks for sharing,

Matt Naumann

Dec 24, 2009 04:17 AM #16
Ambassador
1,119,787
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com

There are no steals anymore in metro Detroit.  There are deals but the market has changed here

Dec 24, 2009 05:43 AM #17
Rainer
84,156
Andrew Haslett
Van Warren Home Inspections, NAHI CRI - Fort Knox, KY
Heartland of Kentuckynulls, Best Home Inspector

Lisa,

I'm picking up on a theme of perception. Perception being subjective relative to reality's objectivity. It doesn't matter what the dollars are, if the deal is perceived as a steal.

Dec 24, 2009 06:17 AM #18
Rainmaker
1,175,897
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota Real Estate Expert

Some people dont understand win win situations and how to make things come together.  Its not that hard if people get over their ego.

Dec 24, 2009 07:22 AM #19
Rainer
63,430
James Lyon
Vista Pacific Realty - Sacramento, CA

It is not the job of the buyers or their agents to solve the sellers problems. If the sale of the home helps in this regard, great., but the buyers are looking to buy a house.

Dec 24, 2009 10:19 AM #20
Rainer
333,602
Frank Castaldini
Compass - San Francisco, CA
Realtor - Homes for Sale in San Francisco

Buyers are no different today than before.  They have always wanted a great deal.  Sellers are also no different today than before.  They have always wanted the most they can get.  To think differently is to buy into the notion that this predicament should be accompanied by compassion on the buyer's part.  I say give me a break!

Best to step back and understand it's always been "offer and acceptance."  Lowballs are not new!

Dec 24, 2009 10:51 AM #21
Ambassador
1,280,813
Jason Crouch
Austin Texas Homes, LLC - Austin, TX
Broker - Austin Texas Real Estate (512-796-7653)

Lisa - Emotions seem to run high whenever sellers are losing big, and I have encountered a lot of buyers who (as you stated here) really want a "steal" instead of a solid "deal".  I feel like much of our work these days is spent as psychologists/counselors.

Dec 24, 2009 01:14 PM #22
Rainmaker
595,456
Lisa Hill
Florida Property Experts - Daytona Beach, FL
Daytona Beach Real Estate

Thank you to everyone who commented. And I got what I expected... a wide array of opinions and experiences. But unfortunately, in our area, we're finding that people in general... no matter what the industry... do NOT want a WIN/WIN situation. It's the desire for a WIN/LOSE form soooo many people that is causing concern.

In this post, I asked that we ned get hung up on the slant, or even the fact that it's real estate. I'm addressing the negative, selfish attititudes from those who will not be happy unless they can brag to their friends about the WIN/LOSE "steal" that they got.

I'd like to see more comments addressing this problem. I'd like to know if this is a wide-spread problem throughout the nation, or if it's primarily localized in our area. Because without exemption, every single sales professional with whom I've spoken has said that THIS WIN/LOSE determination is what they're experiencing from their customers and clients.

 

Dec 24, 2009 02:38 PM #23
Rainmaker
516,488
Russell Lewis
Realty Austin, Austin Texas Real Estate - Austin, TX
Broker,CLHMS,GRI

If a seller needs to sell it certainly weakens the bargaining position and as Lenn says there uill be no relief from a buyer! Congrats on the feature and I also wanted to wish you and your family a very merry Christmas!

Dec 25, 2009 03:39 AM #24
Ambassador
2,049,207
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Good post,

Merry Christmas and a Happy New Year  . . . wishing you the best for 2010

Dec 25, 2009 06:38 AM #25
Ambassador
2,011,022
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Many buyers here wanted a steal, but they're starting to find their is so much competition that some are happy just to get an accepted offer.

Dec 25, 2009 12:01 PM #27
Ambassador
1,376,343
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

An awesome hypothetical story - although it feels like it happens in my world EVERYDAY. Deal and steal also differs one to another.

Dec 25, 2009 09:36 PM #28
Rainmaker
414,115
Andrew Monaghan
The Monaghan Group - Glendale, AZ
CRS, GRI, EPro Associate Broker

Buying a home should be a Win / Win, it is not that the sellers have to take a seal from a bad buyer, There is so much bad information out there at this time that buyers need to be educated on the REAL market, there are areas of Phoenix that are actually APPRECIATING

Dec 25, 2009 11:07 PM #29
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