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Pigs Get Fat, Hogs Get Slaughtered!

By
Real Estate Agent with Keller Williams Elite RM423455

Pigs Get Fat, Hogs Get Slaughter

This idiom, as defined by usingenglish.com, is used to express being satisfied with enough, in contrast to be greedy and having it become your undoing. This is a lesson which many sellers and buyers of real estate in Lancaster, PA have had to learn.

I have looked back over two deals which have gone south because the seller was a hog (metaphorically, not actually). I represented the buyer in both situations.

In the first deal, I had been working with my buyers for a period of time and this home was everything they wanted. Our offer was accepted and the inspection contingency fulfilled. We were waiting to move forward when the appraisal was completed. One problem, the property appraised $15,000 lower than our offer. It was a split-level and finding comparables was quite difficult. The seller was not willing to budge. We were under contract at $335,000 and he would take no less than $325,000. My buyers said, “No, thank-you!” I checked to see what this home sold for and noticed it closed at $315,000. This seller learned a $5000 lesson at a minimum.

The second deal was under contract for $232,500. The inspections noted some concerns regarding the age of the heating system and some work that needed to be completed. In trying to negotiate a suitable arrangement, my buyer basically stated, “I will be satisfied if I can get $5000 towards repairs.” Again the seller was unwilling to budge. This home later sold for $214,000, a $13,000 decision.

If you are a seller of real estate, it is important that a good, strong offer in your hand is often one you need to negotiate to keep together. Do not learn the lesson, “Pigs get fat, hogs get slaughtered!

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Living in Lancaster Group

 

An agent who places your interests as his first priority. 
Cal Yoder

Your Homes for Sale in Lancaster Agent

Keller Williams Realty Lancaster

1630 Manheim Pike

Lancaster, PA 17601

Office Phone: 717-735-1145

Cell Phone: 717-413-0744

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Cal Yoder
Keller Williams Elite - Lititz, PA
Homes For Sale in Lancaster PA - 717.413.0744

Ron, I agree, NAH!

Sharon, good luck and I look forward to your future post.

Dana, I am sure many folks have a lot more stories than I do. Thanks.

Beverly, that saying is another one I could use. Your story has unfortunately been repeated over and over during the last five years. I have also found that way too many agents are unable to do really good CMA's. For a seller, this is of utmost importance.

Cal

Apr 01, 2012 08:39 AM
Debbie Durkee
National Land Realty - Tulsa, OK
ALC, CRS -- Land & Country Estates near Tulsa

They always say, "The first offer is usually the best offer."

Apr 01, 2012 08:56 AM
Gary & April Greer
Realty ONE Group Southwest - Temecula, CA
Real Estate Professionals

On the other hand it looks like both buyers didn't get the property they wanted over $ 5,000 dollars.  It looks like both parties may have missed out on something.

Apr 01, 2012 09:02 AM
Ellen Kippel
Weichert Realtors - Suffern, NY
Licensed NY and NJ realtor 914-588-2365

It is never easy in a transaction when the appraisal comes out lower but it boggles my mind that a seller can be so stubborn when the likelihood is that the next appraisal will be lower, at least until we see the market turn around.  Likewise, it is disheartening when a seller won't come around after a home inspection, as long as the buyer has been reasonable in his request.

Apr 01, 2012 09:42 AM
Kay Van Kampen
RE/MAX Broker, RE/MAX - Springfield, MO
Realtor®, Springfield Mo Real Estate

What a great way to show sellers not to become greedy.  Congratulations on a feature well written.

Apr 01, 2012 10:30 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Of course the Buyers need to think too.  In your first example.  The seller moved 10K but the buyer could not budge 5K.

Apr 01, 2012 11:05 AM
Jeff Reynolds
Utah Commercial Real Estate Connection - South Jordan, UT
Great post! It is tough in those situations to know how to advise best for your clients.
Apr 01, 2012 12:29 PM
Bill Reddington
Re/max By The Sea - Destin, FL
Destin Florida Real Estate

That is reality looking at you in the face. Appraisals are becoming an issue that everyone has to deal with.

Apr 01, 2012 12:43 PM
Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA

Cal:

Your buyers seemed to be very reasonable people.  Too bad the sellers weren't.  I pity their agents who were not able to convince the seller that the offer on the table was the one they should go with.

Apr 01, 2012 12:44 PM
Terry Hunter
Hunter-Broker - Newport Coast, CA
MS Economics
Ron: The situation looks like a negotiating breakdown to me. I am astounded that 2 agents plus a seller and a buyer can't find $5000 between them in order to get both clients the transaction they want and get the agents paid. I was also bemused to see the oracle-like powers ascribed to the appraiser in some of the comments. Kind of like "... the appraiser wrote it, I believe it, and that settles it...". I find that they are often wrong as far as "market value" is concerned, with "market value" being defined as what the property will actually sell for. My experience is that they are generally more timid that effective agents are, because they have to worry about supporting their estimate of value to a review appraiser, while all an agent has to do is sell the property to be "right". I often counsel my buyers that, unless the appraiser comes up with some valid comps that we haven't seen, we are more attuned to what the property is worth to them as buyers than the appraiser would be, and that is even if the appraiser does a great job (certainly not always the case). Of course it's always the "art of the possible", and it may not be financially possible to complete the transaction with a lower-than-contract-price appraisal. However, a healthy dose of skepticism would be a good prescription when dealing with "the gospel of appraisals". :+)
Apr 01, 2012 01:17 PM
Dan Derito
Success! Real Estate - Brockton, MA

Good title and post Cal. Jon Quist also makes a good point in support.  Your house is only worth what the market will bear, and only then if the Appraisal verifies that value.  It's too bad that your buyer was more than reasonable and still didn't get the house.

Apr 01, 2012 01:37 PM
Ranji Singh
Century 21 Heritage Group Ltd. - Newmarket, ON

Hi Cal,

 

Great catchy title. I can understand your frustration as Buyer's Agent to know that your better compromises did not receive due respect. Be sure to keep these two case in your arsenal when seeking to salvage future deals that did satisfy all contingencies.

 

Cheers.

Apr 01, 2012 02:07 PM
Pattie Zanders
Bennett Realty Solutions - Greenbelt, MD

Good article and good insight. This can often be avoided if the listing agents make a little more effort to education their clients. Then, it will be a win for all involved.

Apr 01, 2012 11:41 PM
Jack Snyder
Loan Originator in Orange County for Nations Direct Mortgage, LLC, NMLS #109738 - Equal Housing Lender - San Clemente, CA
Loan Officer, San Clemente, Orange County, CA.

Good post Cal, hopefully is't not like casting pearls to swine.

 

~Jack

Apr 02, 2012 01:33 AM
Brenda, Ron, Lee Cunningham & Tara Keator
West USA Realty - Phoenix, AZ
Realtors, Homes for Sale - Phoenix Metro

I hadn't heard this saying, but I definitely have seen similar situations happen. 

Apr 02, 2012 04:45 AM
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Cal, thanks for the reminder, nobody wants to leave extra cash on the table, yet excessive greed often backfires, oh to know the difference.

Apr 02, 2012 12:24 PM
Anonymous
Alan Grizzle

I have saw the same thing happen many times. It is easy to do, even I have some land for sale that I wish I would have taken offers I had before. I am sure it is going to cost me over $30,000.  I was planning on holding the property for several years and and no idea the market would get as bad as it has.

Apr 03, 2012 12:08 AM
#86
Sylvie Stuart
Realty One Group Mountain Desert 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagsta

Some Sellers have to learn a hard lesson when they come back too aggressive to an offer. Understanding the market and responding accordingly will get you a good price and moved on to your next adventure!

Apr 04, 2012 12:29 AM
Anonymous
Jim mort
Hi Cal one of the techniques we have taught for years Is, you could say to the seller, "Mr and Mrs Seller, you are in a very unique position, and that is, you control the price. What I mean by that is, you can price it to sell and be off the market and get on with you life...or you can price it to be for sale and stay on the market. Whenever a buyer makes an offer and particularly in this market...the property will be sold one way or the other. The buyer will either buy it because they want it, or you will keep it because you think it's worth more. Try it it may work for you the next time.
Apr 04, 2012 09:32 AM
#88
Ken Anderson
Apex Results Realty Inc., Brokerage - Burlington, ON
Broker in Burlington, Ontario

Cal, I get your point, but in my world, I don't usually find fault with the client entirely.  The agents must take some responsibility for not having the deal go together.  For example, when a buyer makes an offer, guided by his agent, and the appraisal doesn't support it, why wasn't another appraisal called for?  That would be my first inclination, if I had counselled my buyer correctly when they made the offer, or if I had counselled the seller as the listing agent.  If the market is in a state of flux, as I understand that it is right now, appraisals will typically be lower than the action in the market, as appraisals are based on past sales.  However, a professional appraiser will also note the trend in the market and be guided the principle of market anticipation in his report notes.  It is the agent's job to advise and guide the client, buyer or seller, to find the common ground that makes the deal go together.  Few clients can stand up to the facts when faced with the truth properly presented to them.  Does happen though.  Happy selling and I liked your title. I'm sure your second quarter will endow you with success.

Apr 08, 2012 11:03 PM