REAL

055: When Working In Real Estate Gets REAL

Things have been a little insane over the course of the last two weeks. Previously on the Real Person | Real Needs podcast, I mentioned that my wife and I recently were able to get pre-approved for a mortgage after over 6 years of being trapped in rental world. I thought that working in real estate would make buying a house a little easier. I WAS WRONG!

 

Notes:

00:00-03:40 Multiple Offers and Trying to Find Our Dream Home

03:41-07:17 Taking a Closer Look | When the Panic Sets In

07:18-10:47 Home Inspections | Knowing When To Walk Away

10:48-16:04 Hey Sellers! Remember that You Were Once A Buyer

16:05-17:45 Doing What Is Right Instead of Just Being Right

17:46-18:36 A Thank You to and plug for ASTAT Inspection Services

18:37-19:33 Housekeeping and Outro

 

Transcription:

Things have been a little insane over the course of the last two weeks. Previously on the Real Person | Real Needs podcast, I mentioned that my wife and I recently were able to get pre-approved for a mortgage after over 6 years of being trapped in rental world. If you’re tuning in for the first time, then I encourage you to go back and listen to episodes 4, 51, 52 to get the full housing history. Now, we wanted to keep our housing expenses lean and mean so we decided to do it now rather than wait until we had more income. Working in the industry now, I have a much better feel as to what is available in our price range and the current interest rates and loan programs. I also want to be sure that we are in a good position regardless of how well or poor the real estate market is doing.

First, we found a home that seemed too good to be true. It had every key component that we were looking for and it was across the street from a diner. Now, that may sound like a weird thing but I’ve always had this social fantasy of walking into a diner and cozying up to the counter for my usual breakfast and shooting the breeze with the locals well into my 70s. Maybe they’d base a screenplay on it or a television series…anyway…We decided to put in an offer. The problem was that it appeared that there were 3 or 4 other people who had the same social fantasy. Maybe they just liked the house. Needless to say we didn’t get it. Then we found another home that we loved, but unfortunately it needs a lot of work that we simply are not prepared to do. Maybe if we had more capital and maybe if I could swing a hammer without damaging my beautiful guitar playing fingers. As an aside, along with my vocal chords, my fingers are what I refer to as the Money Makers. You can listen episode 43 to understand that reference. We decided to take a step back from that house, though I’d be lying if I said I wasn’t still holding a candle for it. Maybe if it drops in price again. We’ll see. Then we found a twin home (not my preference) that had recently been renovated, the overall location was great in terms of proximity to work and family, etc. However the home’s specific location left a little to be desired.

We decided to put in an offer, which was then rejected. We were not that disappointed because we believe that God is orchestrating our search and that it must not have been the home for us. That gave us a sense of peace.

 

Then less than an hour later, the listing agent called back and told us that the sellers had reconsidered our offer and accepted.

 

After that phone call we went through a whirlwind of emotion. We thought we knew what we wanted and trusted that God had closed the door and then here it was swung open again rather unexpectedly. Every 10 minutes I went from feeling excited to being overwhelmed with dread. It’s been over 10 years since we bought our first home, and even though I now work in the industry, I guess I was not quite prepared for this much anxiety. We thought we knew what we were getting into but I guess you never can predict the future.

After we went under contract, we took our kids through the home so that they could see it and that’s when we started to notice a few things that weren’t quite what they first appeared to be.

 

We then went through the process of getting the home inspected which is a necessary but never enjoyable experience because you suddenly see every flaw that the home has and that you didn’t notice before. It’s an older home so it definitely had its share of flaws. Now you’re forced to decide what you are willing to deal with and what would be considered deal breakers. Ugh. Talk about pressure. As a real estate agent, I’m supposed to have all of the answers but it is an entirely different ball game when you are buying the house for yourself. It definitely gives me even more empathy for my clients.

The home inspection uncovered quite a number of things that gave us pause but after getting the opinions of a few specialists, I thought for sure that we’d be able to work out a deal. But once we replied with our requested repairs, we found ourselves waiting…and waiting…for a response.

Now, this home was a flip (purchased on the cheap, renovated, and put back on the market to turn a profit), so the sellers had no connection to the home whatsoever, and the fact that we had not really connected on that intangible level to the house made the whole transaction feel a little off. In my experience, negotiations rarely take as long as the time allotted because people want closure and do not want the process to drag on. For some reason, the fact that we were not hearing back quickly made us anxious. We had really tried to be reasonable in our requests and the listing agent even assured me that the number one item on our list would most likely be handled without question, since it is a common hazard in older homes and not worth ignoring.

 

During the waiting period, my wife and I had started to become okay with all of the other items on our list not getting done as long as Priority #1 was handled.

After 4 days, the agent called back to give us an update (not an official response), and we were shocked that there was even a question as to whether this particular issue was a deal breaker. In reality, it was the only deal breaker. The sellers were willing to fix all of the smaller items but not the one that really mattered to us. Unfortunately, this conversation, coupled with the fears and anxiety we had already been wrestling with led us to conclude that this home was not the one for us.

 

We felt that if this home had been completely renovated yet this particular item had been ignored, we couldn’t reasonably assume that other items would not crop up in the future due to being overlooked.

Well, we had to make the difficult decision to walk away from the deal.

 

The funny thing is, neither of us are that broken up about it.

 

After having looked at a number of houses, we came to the conclusion that we probably wouldn’t find a nicer home in our price range that was in this close proximity to work, family, etc. So our decision to make an offer was based purely on logistics and reason, rather than on an emotional connection. The situation surrounding our decision aside, I don’t think either of us were IN LOVE with this particular house, so that definitely makes the decision a little but easier to swallow.

So, I made the phone call to terminate our agreement and effectively reset our home search.

We spent over $700 on the various inspections with nothing to show for it. But as I said before, we actually feel better than we did when we were under contract. I had thought that my lack of emotional connection was merely because I work in real estate now and that it is more business than personal for me. But as it turns out I believe that my gut was telling me something and I will be sure to listen more attentively the next time around.

Because sometimes you just need to know when to walk away.

 

One of the things that I strive to communicate to my clients is the importance of understanding the transaction from the “opposing” side. I use that word not in an adversarial way, but simply because it is accurate. The sellers and buyers are at opposite ends of the settlement table, but one of my jobs is reminding people that regardless of whether they are buying or selling, everyone wants the same outcome.

The sellers’ goal is to sell their home. The buyers’ goal is to buy their home. The mortgage company wants to lend the money because that means collecting fees and interest which keep them in business. The agents want the home to change hands because that means their bills get paid and their family can eat for a few more weeks. Everyone wants the same thing, though sometimes it may seem that no one does.

In our society, we have put far too much emphasis on being right or “winning” an argument. Now one of my core values is to do WHAT IS RIGHT before what is profitable. Notice that it doesn’t say TO BE RIGHT. Believe me, BEING RIGHT would be a lot easier than DOING WHAT IS RIGHT. As the old adage says, “Sometimes the hard thing and the right thing are the same thing.” The seller who decides that winning the negotiation is more important than selling their home will be setting themselves up for one of the most stressful, unpleasant experiences of their entire life. I am baffled that sellers are so easily offended when trying to sell their home that they forget the main objective, which is to SELL THEIR HOME.

I can usually recognize the tell-tale signs, which if I’m being honest can easily be mistaken for a child being offended on the playground and subsequently taking their ball and going home. I’ve watched in horror as sellers go out of their way to sabotage the sale of their home for no other reason than wanting to put one over on the buyer and get the better end of the deal.

This is why it is so important that sellers remember that once upon a time, not so long ago (apologies to Bon Jovi), they, too, were buyers. Sellers often balk at the idea of having to foot the bill for both sides of the agents’ commission, conveniently forgetting that when they bought the home, they didn’t pay a realtor to help them, the seller did. They also don’t expect to have to do any repairs to the home because they “lived in it just fine.” The funny thing is, if the seller didn’t spend money to keep their home in above average condition during all of the years that they lived there, then why do they think the buyer should foot that bill? More importantly, why are they offended that someone offers less than asking price and then has a list of repairs they would like to have done?

The money will be spent, whether it is over time through home improvement projects, or when it comes time to sell. Wouldn’t you rather enjoy those improvements while you still live there? Instead of fixing everything for someone else to enjoy?

Sellers, put yourselves in the buyers’ shoes. (Don’t worry, I also give the same advice to buyers). Imagine what it would have been like if you found your dream home and the homeowner was being difficult or unreasonable in their “take it or leave it” stance to negotiations. It would be hard, and would no doubt taint the entire home-buying process. 

Now you may have purchased your home under negative circumstances, and you personally dealt with a very difficult homeowner who tried to stonewall you every step of the way. I’m sorry for that. I truly am. But you can break that cycle by not using that emotions of that experience to cloud your judgment now that you sit in the seat of homeowner. The person who will want to buy your home does not deserve the same treatment you received. Just as you didn’t deserve it when it happened to you all those years ago. 

As you prepare to sell your home, I implore you to seriously consider the transaction from both sides. What are some things that would concern you as a buyer? Are there any wonky workarounds that you’ve lived with for years that may be in need of repair? Would you want to pay more for a home than the data shows it is worth? All of these questions need to be asked before your home hits the market. That way, you price your home accurately, market it truthfully, and attract a like-minded buyer who wants to make this transaction as smooth as possible. 

I truly believe that we can make a difference in real estate by being authentic and generous in the midst of a superficial and self-centered industry. Instead of trying to win a negotiation, it’s time for current and future homeowners to seek a “win-win” solution so that we can be better people and better neighbors, working together to build a better community, and hopefully, a better world. 

At this point you may be ready to find another person to talk to you about your real estate needs. A real SHARK. A strong negotiator who takes no prisoners. Believe me, there are plenty of those people out there. And they are perfectly content to burn bridges and leave a trail of bloodied victims in their wake. I, on the other hand, would like to BUILD bridges. For me, this industry is not about transactions, numbers, commission, and making a name for myself. It’s about people, relationships, building a community, and leaving a legacy.

I know this approach may seem hopelessly optimistic and even naive. But I don’t care. I believe it is the right thing to do. I’d rather leave a little profit on the table if it means inviting more people to the table of home-ownership and helping others fulfill their dream.