SE Manitoba Real Estate
He had seen the house a few times, and loved it. Who wouldn’t? The ornate carvings surrounding the fireplace and trimming the grand staircase were among countless eye-popping details. The owners had spent decades adding many intricate details. The price had been reduced by over $40K, bringing it down the half-million dollar range. The buyer had been shopping within the original price range, and adored everything about the place. He decided to write an offer.
And what did he offer for this already-reduced home that he absolutely adored and couldn’t wait to own? He offered $50K less than the reduced price.
That’s over 10% of total asking price. (When’s the last time someone asked you for fifty thousand dollars?)
Just to get some perspective on this, think of the last time you listed your property for sale. Remember the price? Now imagine someone making an offer for 15% less. On a $250K home, that would be $37,500 of your money that the buyer expects you to fork over. Now imagine you had already, perhaps out of desperation, reduced it by that much. Now we’re talking about $75,000 of your hard-earned cash.
… Are you getting the picture of the unabashed greed going on here?
What’s worse, this is happening more and more.
Ever since people heard it’s become a buyers’ market, buyers have interpreted this as their right and obligation to hold sellers over a barrel.
What they misunderstand is that a buyer’s market is not a bully market.
What “Buyer’s Market” REALLY Means
A buyer’s market has little to do with price.
It means that buyers have more selection in their price range. Options are not scarce as they were in the sellers’ market of five or ten years ago. There are many choices in every price range. Aren’t you lucky?
It means that buyers have time. No more do they need to race an offer in to beat out competing buyers. No more do they have to decide after seeing a property once. Buyers are not time pressured, and have the luxury of being able to look, and look, and look some more.
Instead, many people are low-balling right now, and some are doing so offensively.
If you’re planning to offer in the near future, don’t demand tens of thousands of dollars from strangers just because you misunderstand the term buyers’ market.People don’t owe you their home equity any more than you owe them yours. It makes you look rude and dumb and downright greedy.
Don’t be that guy…
** Just a note about “that guy” — the story I share is a fictitious creation – a culmination of numerous people and characteristics. I guard carefully the privacy and dignity of my clients, colleagues, and others I come into contact with. This story was meant to illustrate a general common occurrence, not identify any one person or deal.
The amount and size of increasing low-ball offers though, is a real, accurate depiction**
“Hello Tina speaking,” I answered.
The male caller said, “Hello, My name is Mark. My wife and I want to see your listing at 123 Country Rd. outside of Winnipeg tomorrow evening. This is exactly what we have been looking for. Your list price is $600,000. We are pre-approved for $650,000, but we really don’t want to spend that much.”
I was pleasantly surprised by his self-awareness and willingness to be open about details.
He continued, “I own 160 acres of land in a completely different direction but I don’t have to sell it to buy. Scotia bank pre-approved us without having to sell first. We would like possession in about six to ten weeks, but we are flexible.”
We parted with my promise to confirm arrangements after I speak with the seller.
The caller was definitely familiar with the questions real estate agents ask. He had been quick to qualify himself and had told me everything an agent wants to hear.
One of the most difficult things to do is qualify a buyer who calls because they saw my sign. Typically, the buyer wants to withhold information. Usually people don’t offer this much information to a stranger on the phone. He’d made it easy.
“Tomorrow evening will work for the seller,” I told him when I called to confirm our appointment.
He asked, “Is it okay if we bring our Real –a – tohr?” I gritted my teeth at the mispronunciation.
“Mark,” I began, “you never mentioned that you are working with a Real-tor.” I made sure to pronounce the word properly and very clearly. “I co-operate with other agents. Please have your agent contact me to confirm arrangements.”
“Oh, well, our real-a-tohr is too busy. He does not have time tomorrow evening.” Something smelled fishy. “Can’t you just show it to us?” He asked.
“Let me ask you something Mark. If I showed you this property and you were interested in writing an offer, which agent would be writing the offer?”
I was a little surprised when he replied, “I will be writing the offer with ABC Realty. I have signed a buyer contract with that office so I have to write the offer with them.”
My spidey-senses were tingling.
“I am very familiar with ABC Realty. I like doing business with them. May I ask which agent you are working with?” I probed.
“John Smith and Jim Tayler.” The names rolled off his tongue effortlessly.
I did a quick mental inventory and realized that both of the named agents did, in fact, work at ABC Realty.
“Hey, I know John Smith!” I said excitedly. “I just did a deal with John recently. He is a great guy.”
“Well we actually have been working with Jim. He has just been so busy. Do you know Jim?” he asked.
“I have never met Jim but he has a good reputation in real estate. I will be happy to co-operate with either Jim or John. Please give one of them a call and have them show the property to you. The agent who is being paid should be the agent introducing you to the property.”
Mark never did come look at the property. In fact, neither Jim Taylor nor John Smith had ever spoken to this caller before this day and neither of them had a buyer agency agreement with Mark.
Mark knew a lot about real estate. He knew that if he told me that he was under contract with another agent that I was forbidden to pursue writing an offer with him.
Mark also knew that if he told me that he and his girlfriend just liked looking at nice houses together, and were not actually wanting to buy, that I would not drive out and spend my evening away from my family just to let them see it.
So Mark lied.
Some people – even some real estate agents – think that every Tom, Dick, and poodle with a whim to see a house should be entertained.
I disagree. For a few reasons.
It’s disrespectful to me and my family for one thing.
I value my time and family. I’m all for charity and generosity and sharing, and definitely give until it hurts. But I don’t fill the tank with gas and leave my family for hours just to humor a browser with no intention of buying – especially when they’ve spent a good deal of time lying to my face. Sorry, no. I will not enable that.
It’s also disrespectful to sellers.
If it was your house for sale, would you want to change your plans for the evening and rush to get cleaned up and out of your own house just so someone could view the house for something to do?
If you knew the people viewing the house were not in a position to buy a house, would you want me to bring them by anyway?
My sellers appreciate their time being respected, so I continue to guard them as much as I can from browsers, looky-loos, and anyone else who just likes to poke around in people’s houses for a good time.
They are free to do so at open houses.
The process of selling your home is fraught with pitfalls.
It is made up of endless legal loopholes, multiple financial hoops, and continuous face-to-face confrontation and negotiation with both buyers and their skilled agents.
I think when people imagine selling their home they picture meeting with a nice couple in their dining room, who is able to buy their home, agrees with the price, and makes a clean offer that goes through that very week. This kind of mental picture leads many to try selling privately. I’ve talked already about how going it alone has cost people a lot of money, or even caused them to lose their house.
Every agent dreams of the smooth easy transaction too. It is far from reality though. There are hundreds of stories of people losing thousands of dollars, being tricked, or even losing their house – all because of the complicated nature of real estate transactions.
There are serious dangers to going it alone.
So just what kind of protection you get from an agent then?
An agent guards your personal safety and privacy.
Every time you allow a showing, you open your house up to strangers. What they see in your home and how they use that information are not something you or your agent can know. But your agent is on your side, and will help you protect your privacy while people are looking through your home.
We can tell you what kinds of things to put away that might tell potential buyers too much about you, your motivation for selling, your schedule, your finances, and even your home and bank security information.
An agent negotiates in ways that you can’t.
You can tell a lot about a person just from their body language, facial expressions. The words they say – and don’t say – are big clues too. Do you think that you will be able to hide your motivation from the potential buyer?
Selling your home is a highly emotional thing. We become attached to our homes, and lose the ability to look at it impartially. To you, it is your home – the place where you’ve made memories. It is the place where you put in a lot of work, made loans, and worked hard to pay them off. Buyers however, will never view your home with the same sentimentality. This sets up an immediate communication barrier between you and any potential buyer. You’ll both value the place differently, and that alone can kill negotiations.
Also, homeowners are not usually able to hide their emotions while simultaneously being friendly, fishing for necessary information, and skillfully sharing just the right number of details with the buyer.
Now imagine if this homeowner is not negotiating with a pleasant couple, but rather the buyer’s agent. The owner is now up against a skilled professional who knows all the loopholes, is not emotionally involved, and can read the seller like a menu. The homeowner is now in a losing situation.
If the seller has an agent working on their behalf though, that agent brings not only the impartiality of an outside perspective, but also the highly developed skill of negotiation with even the toughest negotiating professional.
An agent is more available than you.
In our instant access, texting, fast food society, home buyers expect a high level of availability from sellers. Buyers expect sellers to accommodate their schedules. If sellers don’t respond quickly to showing requests, potential buyers move on to the next house. Can you leave work to go show your house at any moment?
Agents can. We leave in the middle of a wedding if we have to, because we’re dedicated to this. We’re full time, all in, and always there so you don’t have to be.
Real estate is tricky, and messing up can cost big time. That’s why real estate agents exist. The whole industry was set up to protect you from yourself and from others who know more about the ins and outs than you do.
… Are you protected?