In the exciting world of real estate, you regularly encounter situations where someone asks you to consider what is important to them. Let’s talk about three times in real estate where something that matters to the other side doesn’t really matter to us.
It doesn’t really matter how much the buyer wants to pay
It’s almost guaranteed that whenever we represent a seller in the sale of their property, we will encounter a buyer or their representative who are keen on telling us how much their buyer wants to pay.
It is understood that this is important to the buyer and therefore their agent. After all, everyone has a budget, a price that they can afford, and they are comfortable paying.
It seems obvious, but we have to remind buyer agents on a regular basis that how much the buyer wants to pay is not important to the seller.
Case in point, we have a great townhouse for sale in Richmond Hill. You can take a look at a virtual tour, photos and floorplans at the website at www.9241bathurst.com. We listed it recently and within a few days of the listing going up, an agent called to ask for some information.
We shared the information he wanted, chatted about the property, and explained how the neighbouring property (identical in square footage and layout, with a few more updates) sold recently for $735,000. Our list price of $719,900 is quite fair and more than accommodates any differences in finishes between the two.
The agent listened, he agreed, he said he would talk to his client but would likely be bringing us an offer.
Five minutes later, he called back and asked if we would consider an offer of $650,000. When it was explained that no, that wasn’t a price reflective of the value, he didn’t argue. He did say that his client had a budget and couldn’t afford to pay more than $650K.
With as much patience and tact as possible, we told him that he shouldn’t be showing properties listed at $720K if that was the case.
This agent, likely new to the business, made the mistake of believing that what his client wanted to pay is in any way relevant to the seller of a home. We have a great comparable, we know what the home is worth, and a buyer not being able to afford it is not something my client should, or does, care about. Put simply, we’ll sell it to someone who can afford it.
It doesn’t really matter how much the seller wants to get
This leads to the second situation we see regularly, where a listing agent tells us the sale price the seller is willing to accept.
That, in itself, is something that is quite relevant to us, however, it has to be a sale price that is based on market comparables and logic.
Often, when a property seems to be overpriced, the listing agent isn’t able to substantiate the price. When we press the issue, the answer is inevitably “Well, that’s what the seller wants to get for the home.”
Sometimes, they go further and explain that if they sell for X price, then the seller will net Y price, which is enough to allow them to do whatever it is they want to do with the next stage of their lives.
While it’s clear why this is important to the seller, it is completely irrelevant to a buyer. Well, completely irrelevant might be a bit harsh, as it matters a bit, but only in that we aren’t going to pay it and therefore we likely aren’t buying the property.
Just like a buyer’s budget and what he wants to pay for the price is not really important to a seller, the amount that a seller “needs” to get in order to get the final payout they are after is not the concern of the buyer. They have their own budget, their own concerns and most importantly, they have their own agent who is telling them what a reasonable valuation is for this property.
The price a buyer pays is based on their level of funds, market conditions, supply and demand and so forth. The price is not based on what would make things great for the seller.
It doesn’t really matter what their personal opinion is on the home’s style or decor
The final situation where we regularly encounter people sharing their opinion as if it should matter to us is in the area of personal taste.
Everyone has a different personal style and what is appealing to one person can be hideous to someone else.
In real estate, just because someone doesn’t like a particular architectural style, or paint choice, or décor decision, doesn’t mean that everyone will feel the same way.
In working with our clients, we’ve sold and bought homes that weren’t appealing to everyone. In all of these cases, our clients either did like the style, or were willing to make some changes to make it their own.
On a regular basis, we encounter agents who are very keen on sharing everything that is wrong with the property. They find fault with the renovations that were done, the layout of the kitchen, the decisions made for light fixtures and on and on.
There was one situation where after listening to the agent complain about all the “problems” with the condo we were selling, we asked him why on earth his client wanted to buy the place if he hated it that much? He didn’t really have an answer and after a low ball offer from him was ignored, his client came to his senses and offered a fair price and we sold it to them. Presumably they made changes to the home afterwards to make it more to their taste.
Whenever an agent tells us what they think is wrong with a property, it’s hard to imagine what they think is going to happen. Best case scenario, we agree with them that the place isn’t for everyone and that some changes could be made to make it more appealing to the public at large. Worst case scenario, our client is told that this potential buyer hates the personal choices they made in décor and design and the client tells them to take a long walk on a short pier.
No home or property is completely perfect for a buyer. Telling us how their client’s personal style and design choice is different from our client’s style doesn’t lower the price or make us more willing to accommodate the buyer. It’s just not relevant to us.
In all three cases, it boils down to is the agent not realizing that a very relevant conversation between themselves and their client is not going to be overly important to us.
Whether is what a buyer wants to pay, what a seller wants to get, or how the other party feels about the style and design choices in a home, it just doesn’t matter much to the other side.
The most productive negotiations are when both sides come to the table with a clear understanding of what is important to their client but who don’t just rely on that in order to come to an agreement on price. Market conditions, great comparable properties and relevant facts about the property all come into play in a negotiation – not wishes or personal taste.