Parents are always the first ones we go to for advice, especially with big decisions that they have already been through. And why not? They raised us from infancy. They taught us right from wrong, nursed our physical and emotional wounds, and helped us blossom into the adults we are today.
In the last year I've been blessed to work with many first time homebuyers and young couples. Some need the advice of Mom and Dad more than others. While we trust everything our parents tell us, it is important to note that it may have been DECADES, since these parents were involved in a real estate transaction. Many of the parents whose advice was sought this past year were Moms and Dads that had purchased the family home about twenty years earlier, and had no further dealings with purchasing real estate. And some were brought to me as "experts", when the reality of the situation may have been that the real estate investing they were doing was in another, less expensive market, or their expertise was gained over 30 years ago.
I understand the need for Mom and Dad's support, but have found myself at odds with their advice at various points, with diifferent clients this year.
The first experience was a listing. I could not understand, despite the facts and figures I kept giving month after month why my clients were refusing to lower their price. This deicision was costing them TENS OF THOUSANDS as time went on. Turns out, Mom was giving them real estate advice from across the country. And her advice carried with it the authority of someone that had been a Realtor in the mid 1980's for about wo years. Her advice, sadly, contradicted everything the market had been telling us. "Don't compromise your list price. Someone will see the value in paying more for your home, than the others in the neighborhood." That was not the case. The home was on the market, in declining conditions, for about 9 months before it was rented. I could have, at the very least, had my clients break even,had they taken my advice, given with facts and figures to back it up. But they lost months of mortgage payments to support a vacant home, and ended up in a situation where the rent they collect each month still has them reaching into their own pockets each month. Meanwhile, their parents had owned rental property and had the stomach for such strategies. They wanted nothing more than to SELL and be done with the property.
The next was a contract negotiation. A bank owned property, in pristine condition (very unusual considering the multitude of homes we'd seen) and priced to get a contract....or multiple offers...within DAYS!! There were no offers at the time these first time homebuyers wrote an offer. I made sure, because that would affect the initial offer. They decided to see if they could get more of a discount. Their folks had been telling them they needed to play hardball with listing agents and banks so my buyers decided on coming in $10,000 below list price. An immediate counter came from the bank. The bank offered $2,000 below list price. Still... A GREAT DEAL. And still, no other offers. My clients really felt it was best to go back one more time and try to get $2,000 more off the list price. I explained that if another offer came in the meantime, there would be an entirely different scenario. A bidding war. They wanted to be notified, because if it looked like another offer was coming in, they would immediatley take the $2,000. Guess what happened? Another offer was coming in.
My buyers immediately said, "Forget the extra $2K, we accept the original coutner by the bank." Unfortunatley, by the time I got the papers signed, and ready to fax to the bank, the other offer was in hand. The listing agent said it was time for my clients highest and best offer. Luckily, my clients got the house, but ended up paying $6,500 above list price....when they could have gotten it for $2,000 less than list. So Dad's advice to "play hardball" cost them $8,500, but nearly their dream home.
Parents should always be relied upon for support in the major moments of your life, but when it comes to navigating the real estate transcation, trust your Realtor. We do this everyday!! We know the ins and outs of our markets. We know the process of bank sales, short sales, listings...everything. This is how we make our living. And we do it all to get you...our client...the best possible result. WHY? A job well done creates a happy client...and tons of referrals.
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