In Part 5 of “Realtyperson, heal thyself,” Rand shares lessons he learned from the other side of the real estate business — the client side. Read Part 1 here, Part 2 here, Part 3 here and Part 4 here.
When I listed my home for sale last year, I worked with two great agents. I could have just listed it myself, with my wife or even with one of the myriad other family members who are all licensed. But to paraphrase the old adage — “He who represents himself in selling his home has a fool for a client.”
So I hired two agents the most meritocratic way I could think of: the top agent at my company and the top agent at the local office. They’re both great, they’ve both been with my firm for a long time, and I like and respect both of them.
My home was not an easy sale. It had a bit of that “best house on the block” problem. It’s a 4,500-square-foot condo that was twice the size of any other unit in the building, with a higher level of amenities than anything else in the area.
And it didn’t help that I overpriced it. Yes, yes, I admit that now. It was overpriced. Wow, it feels really good to get that off my chest.
“I’m Joe, and I’m a price-aholic.”
“Hi, Joe!”
So go ahead, roll your eyes. Another overpriced seller — and this one should have known better. After all, for 15 years I’ve been teaching how to persuade sellers to price their homes to the market. I know all the scripts, I know all the techniques.
And yet when it was my own home, I was immune. I wanted what every seller wants, and said what every seller said — and what every broker hates to hear:
- Let’s test the market.
- I’m not in any hurry to sell.
- I can always come down later.
- It only takes one buyer.
God, I was a nightmare. But that’s part of the lesson — even someone who knows the market and the industry can get starry-eyed about pricing his or her home.
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My agents handled it beautifully. They priced it where I wanted, and gave me time to see what the market was telling me. And for a long time they didn’t push me to lower the price, until one day they called me to say that they thought we should meet to discuss the marketing.
I laughed. “Please, I know that line. I’ve taught that line. You don’t want to talk about the market; you want to beat me up on price.”
So we met. We went over comps. We went over feedback. And at the end, they recommended a relatively dramatic price change.
And that’s where I got the other part of the lesson. Because when they made their recommendation, my immediate, instinctive reaction was this: “Damn agents!”
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It was like a little devil cartoon character had perched on my shoulder, whispering evil little thoughts into my brain: “They just want a quick sale. They want me to give it away. What do I need them for if I’m going to price it there?”
Think about that. I’ve been doing this for almost 20 years. I know the market. I know economics. I know how real estate works. Even more, I know these agents, whom I trust and respect.
And yet I had that reaction. Damn agents!
Here’s what I learned: Sellers don’t trust agents on price, no matter what. It’s just impossible. Even if we’re right, even if we have a great relationship with those sellers, they’re never, ever going to trust us fully.
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There’s something deep-seated in the psyche of all sellers that makes them suspicious of their agent’s recommendations on price. If I could have that reaction, then anyone could.
So what do we do? Well, for one thing, never take ownership of price. The old-fashioned approach of telling a client “I’m the professional, trust me,” as a way of getting a reasonable price is a terrible idea — because they don’t.
Remember this: you’re not responsible for the price. You’re just “the weather forecaster.” The weather forecaster doesn’t control the weather; he or she is just there to tell us what the environment is like — it’s up to us to decide whether we want to have a picnic.
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With real estate, it’s the same idea — you don’t control the market. You don’t price the home. Just show them what the market is saying, and let them figure it out for themselves. Show them, don’t tell them, because they’re never going to trust you fully.
And that’s what happened to me. Luckily, the cartoon character on my other shoulder, the angelic one, whispered much smarter thoughts into my other ear — something about how I’d tested the market for long enough, and it was time to find my buyer.
So we lowered the price.
And we were in contract in two weeks.
Damn agents!
Joseph Rand is one of the managing partners of Better Homes and Gardens Real Estate – Rand Realty in New York and New Jersey and blogs about his local markets at the Rand Country Blog and about the industry at ClientOrientedRealEstate.com.