After a somewhat soft sales month in March, real estate activity through the MLS® system of the Georgian Triangle Real Estate Board (GTREB)thus far in April appears to be running at a pace relatively consistent with April of last year. Several things are undoubtedly holding the market back a bit right now one is the weather and to some degree, the upcoming federal election.
Weather definitely plays a role in our market as it has a bearing on the weekend traffic we attract to the area. Skiing is essentially over and with the current cold snowy weather, golf and other recreational activities associated with spring are not yet underway so we are definitely in the mid-season doldrums. We see this reduced traffic through weak attendance at Open Houses and in reduced showing requests for listed properties.
Historically, any pending election will certainly impact the buying decisions of many consumers contemplating a major purchase. A change in government may lead to economic, taxation or other changes creating a cautionary mood that shifts buyers into "neutral."
Another factor impacting our market activity is the pace of sales in the Greater Toronto Area (GTA) as a good portion of today's buyers are coming from the GTA and other parts south of us. In speaking with clients on the weekend that reside in Toronto, the market there has temporarily slowed as well and until that improves, the impact will continue to resonate up here. Further, due to the recreational nature of our market, a good portion of real estate sales in this area are discretionary in nature so often tere is no sense of urgency with buyers to purchase.
As I have told seller clients on numerous occasions, we can't create buyers. We endeavour to implement the most aggressive marketing plan we can in order to expose a property to potential buyers but those buyers have to be our there. In some cases at certain points in time buyers are noticeably absent and often through conditions or circumstances beyond the control of any of us.
Showing posts with label Real Estate General. Show all posts
Showing posts with label Real Estate General. Show all posts
Through The Eyes of Buyers Part 2
As previously stated the issue of pricing remains one of the key elements in successfully getting your house sold. Sellers and in many cases REALTORS® are failing to acknowledge this which is why we have such a high ratio of "expired" versus sold listings.
Unfortunately and despite the effort some of us put into it, pricing a property is not a pure science. Comparable sales analysis is the best methodology out there for pricing a property but for some homes and or parcels of land there are no comparables. Increasingly, I find it helpful to have a seller(s) look at their homes through the eyes of a buyer(s). Buyer's certainly expect a property to meet certain conditions in terms of appearance. It is up to date, nicely decorated, well maintained, free of clutter etc. etc. but it also goes much beyond that. At specific price points, certain other expectations emerge that help to establish a home's value. At $350,000+ a home better have a nice master bedroom with an ensuite bath. When you start getting up in the $500,000+ range, today's buyers are expecting finishes commensurate with that price such as granite or other such material for the counters, upgraded trim, better than average bathroom fixtures and kitchen cabinets etc. Many homes in our market are over-priced from the standpoint the features and finishes don't live up to the expectations of the buyer(s). For example, a home listed in the $800,000, $900,000 range that has laminate floors versus real hardwood, Arborite counters not granite, hollow core "800 series" doors and other such finishes typical of a mass produced, tract subdivision home is never going to attract a buyer willing to pay that price. Despite a detailed comparable market analysis or other mathematical gyrations, a property is ultimately worth what a willing buyer is prepared to pay and if a buyer(s) sees a lot of cost ripping out what they perceive are inferior finishes, they will never pay an inflated price.
Looking at your home through a potential buyer's eyes is something your listing REALTOR® should help you with. One other key point to consider is this. When you finally get an offer on your home at a price you turn down, essentially what you are doing is buying your own home for that price. At that very moment, looking at your home through a buyer's eyes is critical as you need to ask yourself, would I pay that for this home? Why? Because that is exactly what you are doing when you turn down that offer.
Unfortunately and despite the effort some of us put into it, pricing a property is not a pure science. Comparable sales analysis is the best methodology out there for pricing a property but for some homes and or parcels of land there are no comparables. Increasingly, I find it helpful to have a seller(s) look at their homes through the eyes of a buyer(s). Buyer's certainly expect a property to meet certain conditions in terms of appearance. It is up to date, nicely decorated, well maintained, free of clutter etc. etc. but it also goes much beyond that. At specific price points, certain other expectations emerge that help to establish a home's value. At $350,000+ a home better have a nice master bedroom with an ensuite bath. When you start getting up in the $500,000+ range, today's buyers are expecting finishes commensurate with that price such as granite or other such material for the counters, upgraded trim, better than average bathroom fixtures and kitchen cabinets etc. Many homes in our market are over-priced from the standpoint the features and finishes don't live up to the expectations of the buyer(s). For example, a home listed in the $800,000, $900,000 range that has laminate floors versus real hardwood, Arborite counters not granite, hollow core "800 series" doors and other such finishes typical of a mass produced, tract subdivision home is never going to attract a buyer willing to pay that price. Despite a detailed comparable market analysis or other mathematical gyrations, a property is ultimately worth what a willing buyer is prepared to pay and if a buyer(s) sees a lot of cost ripping out what they perceive are inferior finishes, they will never pay an inflated price.
Looking at your home through a potential buyer's eyes is something your listing REALTOR® should help you with. One other key point to consider is this. When you finally get an offer on your home at a price you turn down, essentially what you are doing is buying your own home for that price. At that very moment, looking at your home through a buyer's eyes is critical as you need to ask yourself, would I pay that for this home? Why? Because that is exactly what you are doing when you turn down that offer.
Through The Eyes of Buyers
In my last post I commented in general on the matter of pricing a property to sell. This has become an increasingly important component in successfully marketing your home to potential buyers and one of the key reasons for that is the Internet.
Today’s buyers have a tremendous amount of information at their fingerprints and are well informed. You’re reading this blog for example and I presume you are doing so to amongst other things, expand your awareness and to be better informed. Most buyers today for real estate (80+%) and other items spend countless hours online looking for and at the products or services they are contemplating purchasing. Shopping for real estate is without question one of the first online frontiers that consumers flocked to. Here in Canada http://www.realtor.ca/ receives 3 million or more visitors a month looking at properties that are posted on the various Multiple Listing Services (MLS®) of real estate Boards across the country. Everything is there, room and overall house sizes, community and tax information, photos, prices and more. Buyers get a very good picture of what’s out there. They can tell if the same home comes up for sale month after month. They can compare property listings and get a good sense of their relative values, quickly determining in their own minds at least, which ones are priced right and which ones appear to be over-priced. The bottom line is there’s no fooling anyone and sellers shouldn’t kid themselves alone or with the help of their REALTOR®, into thinking they are going to be the lucky ones and find that one unsuspecting or uninformed buyer that is going to over-pay them for their property. In our local market, essentially 1 out of 3 properties listed for sale actually sells so with that amount of inventory to choose from, nobody needs to overpay for anything.
If you are contemplating the sale of youe home this spring I encourgage you to begin the process by looking at your property through the eyes of a potential buyer(s). Buyers obviously have expectations they want met and this goes far beyond just the colour of the walls or the overall appearance and condition of the home.
More to come….
Today’s buyers have a tremendous amount of information at their fingerprints and are well informed. You’re reading this blog for example and I presume you are doing so to amongst other things, expand your awareness and to be better informed. Most buyers today for real estate (80+%) and other items spend countless hours online looking for and at the products or services they are contemplating purchasing. Shopping for real estate is without question one of the first online frontiers that consumers flocked to. Here in Canada http://www.realtor.ca/ receives 3 million or more visitors a month looking at properties that are posted on the various Multiple Listing Services (MLS®) of real estate Boards across the country. Everything is there, room and overall house sizes, community and tax information, photos, prices and more. Buyers get a very good picture of what’s out there. They can tell if the same home comes up for sale month after month. They can compare property listings and get a good sense of their relative values, quickly determining in their own minds at least, which ones are priced right and which ones appear to be over-priced. The bottom line is there’s no fooling anyone and sellers shouldn’t kid themselves alone or with the help of their REALTOR®, into thinking they are going to be the lucky ones and find that one unsuspecting or uninformed buyer that is going to over-pay them for their property. In our local market, essentially 1 out of 3 properties listed for sale actually sells so with that amount of inventory to choose from, nobody needs to overpay for anything.
If you are contemplating the sale of youe home this spring I encourgage you to begin the process by looking at your property through the eyes of a potential buyer(s). Buyers obviously have expectations they want met and this goes far beyond just the colour of the walls or the overall appearance and condition of the home.
More to come….
Pricing Your Property to Sell
I have talked on occasion in the past about the importance of pricing your property to sell in that it must be competitively priced in order to be "in the market" not just "on the market." Whether the home is $200,000 or $2 million correctly having it priced is the only way it is effectively going to get SOLD!.
In 2010, 30% or roughly 1 in 3 of the properties listed for sale on the MLS® system of the Georgian Triangle Real Estate Board (GTREB) sold. In fact for the past six years the number of expired listings has exceeded the number listings that have sold. That to me is a very telling statistic. First, REALTORS® are not doing their jobs in terms of preparing a thorough comparable market analysis in order to arrive at a list price that is consistent with market value and secondly, some sellers just aren't listing.
When I go into a home I have a faily good sense of what the property is worth. At the same time, gone are the days when a REALTOR® can or should, just walk into your home and shoot from the hip, tossing out a price that will ultimately get you the best price within reasonable time frame.
As a Market Value Appraiser (MVA Residential) I put a great deal if time into pricing properties that I am being interviewed by the owners to list. At the same time, no matter how technical or thorough I may be in arriving at a price, it is not a pure science as a property is ultimately worth what a buyer is willing to pay. The thing is if I cannot sit down with a potential buyer that approaches me about one of my listings and demonstrate to them (on paper) why the property is listed where it is, I shouldn't take the listing. A REALTOR® cannot in fact fulfil their fiduciary responsibilities to a seller and or buyer by taking a listing that they know is over-priced. Amongst other things, our code of ethics states: "A Registrant shall demonstrate reasonable knowledge, skill, judgment, and competence in providing opinions, advice or information to any person in respect of a trade in real estate."
In recently securing a listing, the sellers informed me that I had given them the lowest price out of the REALTORS® they had spoken with but I also provided them with the most compelling listing presentation as to why they should list at that price. That's not the first time I have been told this nor will it no doubt be the last. Conversely I also lost a listing recently where the listing REALTOR® gave them a price $200,000 or 30% more than my evaluation. Due to the fact that the pricing of properties is not a science, my analytical work may not always be spot on but I'm not 30% off either.
I am going to spend more time discussing the matter of pricing in future posts as it's a critically important component regarding successfully selling and buying property. In the meantime I am going to leave you with this one thought. As a professional full-time REALTOR® I do not consider myself to be a "sales person." Our roles have and will continue to change dramatically in the years ahead. Similar to a home inspector, lawyer, accountant or other specialist in a given field, we are "service providers." We are held accountable to render conscientious service to clients and customers and there is a difference between those two parties as well. More on that later.....
In 2010, 30% or roughly 1 in 3 of the properties listed for sale on the MLS® system of the Georgian Triangle Real Estate Board (GTREB) sold. In fact for the past six years the number of expired listings has exceeded the number listings that have sold. That to me is a very telling statistic. First, REALTORS® are not doing their jobs in terms of preparing a thorough comparable market analysis in order to arrive at a list price that is consistent with market value and secondly, some sellers just aren't listing.
When I go into a home I have a faily good sense of what the property is worth. At the same time, gone are the days when a REALTOR® can or should, just walk into your home and shoot from the hip, tossing out a price that will ultimately get you the best price within reasonable time frame.
As a Market Value Appraiser (MVA Residential) I put a great deal if time into pricing properties that I am being interviewed by the owners to list. At the same time, no matter how technical or thorough I may be in arriving at a price, it is not a pure science as a property is ultimately worth what a buyer is willing to pay. The thing is if I cannot sit down with a potential buyer that approaches me about one of my listings and demonstrate to them (on paper) why the property is listed where it is, I shouldn't take the listing. A REALTOR® cannot in fact fulfil their fiduciary responsibilities to a seller and or buyer by taking a listing that they know is over-priced. Amongst other things, our code of ethics states: "A Registrant shall demonstrate reasonable knowledge, skill, judgment, and competence in providing opinions, advice or information to any person in respect of a trade in real estate."
In recently securing a listing, the sellers informed me that I had given them the lowest price out of the REALTORS® they had spoken with but I also provided them with the most compelling listing presentation as to why they should list at that price. That's not the first time I have been told this nor will it no doubt be the last. Conversely I also lost a listing recently where the listing REALTOR® gave them a price $200,000 or 30% more than my evaluation. Due to the fact that the pricing of properties is not a science, my analytical work may not always be spot on but I'm not 30% off either.
I am going to spend more time discussing the matter of pricing in future posts as it's a critically important component regarding successfully selling and buying property. In the meantime I am going to leave you with this one thought. As a professional full-time REALTOR® I do not consider myself to be a "sales person." Our roles have and will continue to change dramatically in the years ahead. Similar to a home inspector, lawyer, accountant or other specialist in a given field, we are "service providers." We are held accountable to render conscientious service to clients and customers and there is a difference between those two parties as well. More on that later.....
During 2009, ongoing news reports regularly appeared regarding the Competition Bureau's allegations that Canada's Multiple Listing Service (MLS®) was anti-competitive. The MLS® system which as you will note is a registered trademark, is owned and operated by the Canadian Real Estate Association (CREA).
After months of legal wrangling which cost CREA and essentially those of us in real estate over three quarters of a million dollars in legal fees in addition to the cost born by Canadian taxpayers, a settlement was reached which saw modest changes adopted to the way in which property listings can be placed on the MLS®.
Contrary to public belief, the change does not allow consumers to list their homes or other property(s) on the MLS® by themselves. The MLS® still remains a REALTOR® to REALTOR® service. What the new rules do allow is listings to be simply posted onto the MLS® by a REALTOR®, allowing the home owner to handle as much or as little of the selling process on their own as they wish. If a home owner elects to recruit a REALTOR® that will simply use his ability as a licensed real estate practitioner to "post" the listing on MLS®, the seller can then put up their own sign, conduct their own open houses and handle all the negotiations and paperwork should a potential buyer happen along.
REALTORS® are still required to handle the posting of a property on MLS® in order to ensure the accuracy and integrity of the listing information ie: are the room sizes, taxes and other information about the property correct?
I know of at least one area property the owners are trying to sell on their own which has been posted onto the MLS®. The REALTOR® that posted the listing to the MLS® on the seller's behalf is located 6 to 7 hours from Collingwood. Has he seen the property, measured the rooms, calculated the total square footage and verified other pertinent listing information? Not likely. This was one of the primary concerns that CREA had in adopting this change and rightly so. Canada's MLS® is the envy of many other countries including the U.S. We are one of a few countries that has a nationwide MLS® thus allowing consumers to search for properties online anywhere in the country regardless of where they happen to live. Further REALTORS® are legally held to a high standard via Provincial law and are required to carry errors and omissions insurance in the event we make a mistake. As such, consumers have a much better chance of receiving accurate information and fair treatment with respect to their real estate buyer and seller needs versus dealing with a private individual.
Thus far, we have seen little change in the marketplace as the result of the regulatory changes that took place with respect to the MLS® rules in 2009. The listing and sale of real property continues much the same as it has for years with the majority of properties on the MLS® listed by full service REALTORS® that work with seller clients from start to finish. Other options for consumers now exist and there's nothing wrong with that. For those sellers wishing only to have their property "posted" on the MLS® and are willing to promote and market their property on their own and subsequently handle the negotiations and paperwork associated with the sale process they are free to do do. Buyers dealing with sellers wherein their listing has been merely posted to the MLS® should exercise some caution with respect to the information provided. For sure, a home inspection should be done and further, buyers of these properties would be wise to verifiy first hand tax, zoning and other information relative to the property in question. In this area we also have other regulatory bodies to deal with in certain circumstances such as the Niagara Escarpment Commission, the Nottawasaga Valley and Grey Sauble Conservation Authorities etc. A REALTOR® that is located outside the area may not be familiar with properties that fall within the confines of these governing bodies and the chance of a mis-step is then that much greater. As with any purchase the term caveat emptor applies and even more so when dealing with the unknown.
I want to hear from you. Please leave a comment or take my current online poll regarding this matter, I look forward to hearing from you.
After months of legal wrangling which cost CREA and essentially those of us in real estate over three quarters of a million dollars in legal fees in addition to the cost born by Canadian taxpayers, a settlement was reached which saw modest changes adopted to the way in which property listings can be placed on the MLS®.
Contrary to public belief, the change does not allow consumers to list their homes or other property(s) on the MLS® by themselves. The MLS® still remains a REALTOR® to REALTOR® service. What the new rules do allow is listings to be simply posted onto the MLS® by a REALTOR®, allowing the home owner to handle as much or as little of the selling process on their own as they wish. If a home owner elects to recruit a REALTOR® that will simply use his ability as a licensed real estate practitioner to "post" the listing on MLS®, the seller can then put up their own sign, conduct their own open houses and handle all the negotiations and paperwork should a potential buyer happen along.
REALTORS® are still required to handle the posting of a property on MLS® in order to ensure the accuracy and integrity of the listing information ie: are the room sizes, taxes and other information about the property correct?
I know of at least one area property the owners are trying to sell on their own which has been posted onto the MLS®. The REALTOR® that posted the listing to the MLS® on the seller's behalf is located 6 to 7 hours from Collingwood. Has he seen the property, measured the rooms, calculated the total square footage and verified other pertinent listing information? Not likely. This was one of the primary concerns that CREA had in adopting this change and rightly so. Canada's MLS® is the envy of many other countries including the U.S. We are one of a few countries that has a nationwide MLS® thus allowing consumers to search for properties online anywhere in the country regardless of where they happen to live. Further REALTORS® are legally held to a high standard via Provincial law and are required to carry errors and omissions insurance in the event we make a mistake. As such, consumers have a much better chance of receiving accurate information and fair treatment with respect to their real estate buyer and seller needs versus dealing with a private individual.
Thus far, we have seen little change in the marketplace as the result of the regulatory changes that took place with respect to the MLS® rules in 2009. The listing and sale of real property continues much the same as it has for years with the majority of properties on the MLS® listed by full service REALTORS® that work with seller clients from start to finish. Other options for consumers now exist and there's nothing wrong with that. For those sellers wishing only to have their property "posted" on the MLS® and are willing to promote and market their property on their own and subsequently handle the negotiations and paperwork associated with the sale process they are free to do do. Buyers dealing with sellers wherein their listing has been merely posted to the MLS® should exercise some caution with respect to the information provided. For sure, a home inspection should be done and further, buyers of these properties would be wise to verifiy first hand tax, zoning and other information relative to the property in question. In this area we also have other regulatory bodies to deal with in certain circumstances such as the Niagara Escarpment Commission, the Nottawasaga Valley and Grey Sauble Conservation Authorities etc. A REALTOR® that is located outside the area may not be familiar with properties that fall within the confines of these governing bodies and the chance of a mis-step is then that much greater. As with any purchase the term caveat emptor applies and even more so when dealing with the unknown.
I want to hear from you. Please leave a comment or take my current online poll regarding this matter, I look forward to hearing from you.
The Emotional Sea of Real Estate Part 2
In my last post I touched on the emotional aspect of being involved in a real estate transaction and that neither seller(s), buyer(s) or REALTOR(S)® are immune to the flood of emotion that often takes hold of those involved in the purchase of real estate.
Without a doubt the most significant things affecting the emotions of the majority of sellers is the price. While some will confess they have no idea what their property is worth and are thus relying on their REALTOR® to establish that for them, most will harbour somewhere deep down inside a number and usually it's a higher dollar amount than the current market value. A seller's price may be based on what they need to get out of a property to help finance their next purchase or to pay off their mortgage or other debts. Their price may and often is based on what they feel it would cost to replace the home, cottage or whatever. Unfortunately none of these factors affect market price so right off the bat, the seller's emotional tension is starting to build fueled by disappointment once they learn their listing price is not a realistic one. Already on edge with a lower than anticipated list price, the seller's emotions then really erupt when an offer is received that is10% or more below the asking price. If the asking price is realistic, I always recommend a starting point somewhere between 90% to 95% of the asking price. Anything less may result in not getting a sign-back and worse, it creates a very emotionally charged almost antagonistic atmosphere for future negotiations.
Buyer's on the other hand are faced with the emotional element of "fear." Fear of making the wrong choice of area, fear of buying a home with problems, a leaky basement, mould, are the well and septic okay or the most prevalent on today's top 10 list of buyer(s) fears, are we paying too much!
When a buyer and seller are negotiating an Agreement of Purchase and Sale numerous conditions and clauses are always prevalent and while some of these ie: the closing date, accepting an offer conditional on the sale of the buyer's current home are all emotional triggers, none are as flammable as the aspect of price. The seller wants to maximize their price, they are mentally calculating the real estate commission they are going to pay versus the perceived value they are getting from their REALTOR® and lastly, they fear the buyer is just trying to unjustifiably beat them down on price. Some terms in an Agreement of Purchase and Sale are equally as important as the price because in one way or another they too have a financial cost or benefit to the seller, buyer or both These are often overlooked however and it's the responsibility of the REALTORS® involved to point that out.
So what emotions do REALTORS® have. Well, as I stated in my last post, every day we wake up unemployed. That's emotional and you really need to learn to control that or you'd never get out of bed in the morning. Every time we list a seller's property, despite our best efforts, the attractiveness of the property and or its price, there is no guarantee that the property will sell and we will get paid for our efforts. After months of working on a listing, having it not sell and worse losing the listing to another REALTOR® that can be a major let down creating a whole sea of emotional thoughts. The same applies when working with buyers. We load them in the car, spend time driving them around burning up both time and fuel with again, no guarantee of them buying anything thus generating a pay cheque. Obviously these scenarios can lead to frustration, resentment towards the clients and a host of other feelings which all fall into the emotional category.
Perhaps the worst case scenario in a real estate transaction is when the emotions of the REALTOR® or REALTORS® kick in preventing the deal from getting done. Our job is to shrink or preferably remove the emotions of the buyers and sellers however sometimes they are only amplified by the REALTOR'S own thoughts and emotions. REALTOR® egos can sometimes pose a real problem when a listing agent who believes they are 100% right in the price is bound and determined to show up one of their counterparts who may be representing a buyer in the negotiation process and vice versa. Typically there are no winners in this scenario as the deal often reaches a stalemate and is aborted. It's not that the seller and buyer do not want to move on a point, it's the stubbornness of the REALTORS® that is preventing the deal from getting done. Cooler heads needs to prevail and the only way to do this is to remove the emotional elements that are preventing things from moving forward.
Removing or mitigating the emotional feelings with a seller(s), buyer(s) starts with the process of discovery. As REALTOR(S)® we need to determine what the real objection is in order to diffuse the emotional feelings attached to it. The process of dealing with the emotions of seller(s) and buyer(s) can't be addressed when REALTOR(S)® have their own agendas which more often than not are emotionally driven. Our Code of Ethics stipulates that we have to follow the instructions of our clients. That is not to say that we shouldn't step in and bring our knowledges, skills and unbiased opinions into the equation to solve a problem. After all, it is a business transaction and most successful businesses run far more successfully by making fact based decsions versus emotional ones.
Without a doubt the most significant things affecting the emotions of the majority of sellers is the price. While some will confess they have no idea what their property is worth and are thus relying on their REALTOR® to establish that for them, most will harbour somewhere deep down inside a number and usually it's a higher dollar amount than the current market value. A seller's price may be based on what they need to get out of a property to help finance their next purchase or to pay off their mortgage or other debts. Their price may and often is based on what they feel it would cost to replace the home, cottage or whatever. Unfortunately none of these factors affect market price so right off the bat, the seller's emotional tension is starting to build fueled by disappointment once they learn their listing price is not a realistic one. Already on edge with a lower than anticipated list price, the seller's emotions then really erupt when an offer is received that is10% or more below the asking price. If the asking price is realistic, I always recommend a starting point somewhere between 90% to 95% of the asking price. Anything less may result in not getting a sign-back and worse, it creates a very emotionally charged almost antagonistic atmosphere for future negotiations.
Buyer's on the other hand are faced with the emotional element of "fear." Fear of making the wrong choice of area, fear of buying a home with problems, a leaky basement, mould, are the well and septic okay or the most prevalent on today's top 10 list of buyer(s) fears, are we paying too much!
When a buyer and seller are negotiating an Agreement of Purchase and Sale numerous conditions and clauses are always prevalent and while some of these ie: the closing date, accepting an offer conditional on the sale of the buyer's current home are all emotional triggers, none are as flammable as the aspect of price. The seller wants to maximize their price, they are mentally calculating the real estate commission they are going to pay versus the perceived value they are getting from their REALTOR® and lastly, they fear the buyer is just trying to unjustifiably beat them down on price. Some terms in an Agreement of Purchase and Sale are equally as important as the price because in one way or another they too have a financial cost or benefit to the seller, buyer or both These are often overlooked however and it's the responsibility of the REALTORS® involved to point that out.
So what emotions do REALTORS® have. Well, as I stated in my last post, every day we wake up unemployed. That's emotional and you really need to learn to control that or you'd never get out of bed in the morning. Every time we list a seller's property, despite our best efforts, the attractiveness of the property and or its price, there is no guarantee that the property will sell and we will get paid for our efforts. After months of working on a listing, having it not sell and worse losing the listing to another REALTOR® that can be a major let down creating a whole sea of emotional thoughts. The same applies when working with buyers. We load them in the car, spend time driving them around burning up both time and fuel with again, no guarantee of them buying anything thus generating a pay cheque. Obviously these scenarios can lead to frustration, resentment towards the clients and a host of other feelings which all fall into the emotional category.
Perhaps the worst case scenario in a real estate transaction is when the emotions of the REALTOR® or REALTORS® kick in preventing the deal from getting done. Our job is to shrink or preferably remove the emotions of the buyers and sellers however sometimes they are only amplified by the REALTOR'S own thoughts and emotions. REALTOR® egos can sometimes pose a real problem when a listing agent who believes they are 100% right in the price is bound and determined to show up one of their counterparts who may be representing a buyer in the negotiation process and vice versa. Typically there are no winners in this scenario as the deal often reaches a stalemate and is aborted. It's not that the seller and buyer do not want to move on a point, it's the stubbornness of the REALTORS® that is preventing the deal from getting done. Cooler heads needs to prevail and the only way to do this is to remove the emotional elements that are preventing things from moving forward.
Removing or mitigating the emotional feelings with a seller(s), buyer(s) starts with the process of discovery. As REALTOR(S)® we need to determine what the real objection is in order to diffuse the emotional feelings attached to it. The process of dealing with the emotions of seller(s) and buyer(s) can't be addressed when REALTOR(S)® have their own agendas which more often than not are emotionally driven. Our Code of Ethics stipulates that we have to follow the instructions of our clients. That is not to say that we shouldn't step in and bring our knowledges, skills and unbiased opinions into the equation to solve a problem. After all, it is a business transaction and most successful businesses run far more successfully by making fact based decsions versus emotional ones.
The Emotional Sea of Real Estate - Part 1
One of the seldom acknowledged and or appreciated aspects of real estate is the human emotion that typically plays a significant role in the buying and selling process. As real estate practitioners, one of our fundamental roles and perhaps the most important one, is to remove or at the very least minimize, the amount of emotion associated with the real estate buying and selling process and to treat it emotionally unbiased for what it is, a business transaction. Emotion involves and affects every person that is party to a real estate transaction. Sellers are often reticent about leaving their home. It is a place where memories have been made. It represents a significant portion of most people's net worth and often includes large amounts of sweat equity for the work they have put into their garden, the basement and or other improvements they completed on their own and so forth.
Buyers on the other hand are filled with trepidation as well. Is this the right home/neighbourhood for us? Is there something wrong with the place? Can we afford it? Are we paying to much? All these questions and more create a flood of emotion with buyers especially when it comes to actually signing an offer to purchase.
REALTORS® are not immune to the emotional aspect of real estate either. One of the issues we face is the realization that every day we wake up unemployed. We have no idea when and or where the next pay cheque may be coming from but that is all part of being self-employed in a commission only based profession. You either accept it and control the emotional uncertainty of being a REALTOR® or get a none to five salaried job.
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