Market Makers

“I won’t pay that price.”

Perhaps you shouldn’t.  But don’t get mad when someone else comes along and steps up and does.  That’s what makes a market.  I try not to get caught rolling my eyes when I hear this and buyers lose out because they refused to do what they needed to do or pay what they needed to pay to secure a property when they had the chance. One of the biggest problems in the wonderful world of Real Estate, is that many people on both sides of the equation, regardless of whether they are the agents or the actual principles, fail to take into account the human part of the drama. So let’s put something out there that none of us should forget.  A Real Estate transaction is by its very nature an (extremely) emotional transaction.  We are literally “hitting” people where they live (or where they hope to live).  The fact that the concept of CAVEAT EMPTOR (Latin for, Let the buyer beware) is implicit in the sale doesn’t help things either.

After a sale is agreed to, rarely have I heard a seller NOT say, “gee, we should have held out for more.”  Likewise, agents will frequently hear buyers saying after the fact that perhaps “they overpaid.”  The irony is even when the seller is making a killing and selling way over the asking price, they ALL feel like they got skinned alive.  Similarly,the buyer starts to have misgivings too, as soon as the electronic signature is “dry.”  Sometimes this leads to buyers/sellers remorse and properties having to get resold.  That’s never a fun thing and further fuels emotions that could not run higher when this happens.
The emotional nature of the transaction might just be the toughest part of this business.  It certainly offers its challenges. The worst part is that sometimes, it leads consumers to second and triple guess their own agents. They might call their veracity into question. And the worst of all scenarios is when they ask the agent outright,

     “So who are you actually working for….ME, or the seller?”

Of course, if you are working for the seller, they could ask the same thing in reverse.  My least favorite query along these lines is when the agent gets accused of working for the other side and is accused of “just wanting to earn a commission.”

The worst part about this kind of dialogue is, it is invariably an unwarranted interrogation and when negotiations are off by only several thousands of dollars it is insulting to the agent who is supposed to be acting as a fiduciary for YOU.  Let’s plug some numbers in here so you can appreciate the reality.  Let’s say you are off by $5,000.00 and you think that the agent is trying to squeeze you for more money, just so they can make a deal.  Using very conservative numbers, if they are charging a 7% commission, that comes to 350 bucks in added commissions. Presuming 2 agents in the transaction, who work for 2 different brokers, if they are working at 50% splits, each of them is going to net $87.50  So here is the question, do you really think that any agent is willing to sell their credibility, and integrity, and risk losing the rapport they have valiantly strived to establish with you…. for just under 90 bucks?  I suspect it’s not going to happen with any agent even if they have only half a brain.

So who creates the market? If you are a buyer and you buy, YOU do.  Real Estate 101 defines the term buyer as: Person who buys.  It is not a prospect who is thinking of buying. It is not a person who is ready, willing, and able.  Certainly, all of those things might apply, but until they step up and agree to actually “buy” you’ve got a whole lot of nothing.  This is why agents tell sellers, neither they, nor the sellers make the market. They buyers will ultimately set the price and tell you what they are willing to pay depending on price, location, and condition.  The only factor that influences this further is the immutable law of Supply and Demand. In today’s market with extremely low inventories across the board, you can well imagine that emotions are running a little higher than usual. Yikes!

That’s all for now.