When I first went into the real estate business in 1964, it was as a young man who had a real estate broker's license. I bought historic homes in Galveston and Houston, and then adaptively renovated them. At the same time, I was a commercial lending officer for a savings and loan association that served most of Texas.
Combining the information I got from those two interests dramatically helped me to sniff out good potential investments, to hone a skill at negotiating their purchase and sale, and to discover creative ways to buy and finance those investments.
But there was one great lesson I reasoned out and taught myself. I want to share it with you.
You can't have a valid auction when you are both the seller and the buyer.
It boils down to this. You can almost bet that if you have a property for sale and it's not getting the buyer-market attention you think it should be getting, you'll assume you have it priced too high. Your agent will, too. But that's frequently a fallacious line of reasoning.
If you haven't had anyone offer you a lower price, to reduce it you are in essence bidding against yourself. That rarely makes sense. After all, who says that's the reason it hasn't sold?
It is far more likely that the person who wants what you have for sale hasn't yet found it. Yes, I've discovered that is, quite frankly, the more frequent and logical reason something hasn't sold.
Back to my story. Often when I wanted to buy a home for renovation, the seller would also have some rather undesirable piece of property, frequently a vacant lot, they would insist that I also buy as a condition of the sale.
So there I was. The positive side was I had the house I wanted. The negative side was I had a vacant lot I had to get rid of. What to do?
I would do my studying and figure out a fair listing price for the lot. Often the darned thing would sit there for six months without an offer. I'd take it off of the market for a month or two, then re-list it, but this time rather than lower the price, I'd raise it to cover my accrued carrying expense.
Interestingly, when someone came along who had a use for the property, we'd get down to serious negotiations between "a willing seller and a willing buyer." And that's when the price would be determined.
How often did I net more than my original listed price? Every time.
CONCLUSION: It takes so much more than a real estate license to successfully represent clients. It takes the ability to be able to go deep inside your soul where you can find the answers you need to give them their money's worth.
It's why you do business with me.
Great perspective. It is so easy to just drop the price. Great post!
Bill,
That's an interesting take on the subject of properties that don't sell. It also makes a heck of a lot of sense. Thanks for sharing your insight.
To all of you, thanks for your comments.
And you're right, Roberta, I've messed with historic homes and downtown buildings for as long as I can remember, and I've been fortunate enough to be called in as a consultant to city fathers throughout the US before they let some developer come in and screw up their town's heritage.
To Brian. Andrew, Brian, Irene and Ronald: I appreciate that you agree with my thoughts on this subject.
Regards to you all ---
Bill
Bill, I enjoyed this post of yours very much and I agree with you completely. There's a buyer for every property and once they come along, they'll submit an offer and the negotiations begin. Land is often-times harder to sell although the right buyers do come along sooner or later.
You have the ability to dig deep inside your soul, Bill; it's evident in all the stories you write and the lessons you teach. Thank you for sharing them....
Jo
Bill, I want to doubly thank you for commenting on my post. It is how I "discovered" you and I'm very glad I did.
The "urge" to lower the price is the bane of all of us. It de-stabilizes the market. It creates an expectation of ever decreasing prices. Nobody wants to buy today if the price is going to be lower tomorrow.
If we could somehow get rid of the amateurs in the business, we would all be better off.
Bill Roberts
Bill, what is so very obvious to you and me unfortunately isn't to many others. Consequently we are left to trip over these unqualified agents who not only don't know what they are doing, don't care to learn how to do it. Nevertheless, the compete one on one with us.
I would give anything if all agents and brokers were required to work toward and get advanced degrees from an accredited university or college a real estate curriculum. It would make a positive difference.
You write good stuff, so there's no question you're an asset to us all.
BILL
Bill, Thank you very much for your kind words. I, too would like to see qualitative changes to our licensing laws. If that is not possible then I would like to see the creation of an accrediting agency much like the Financial Planners have.
Bill Roberts
Reading this post was very timely for me...I have a listing I have been fluctuating on to do or not to do...this confirmed my gut...not to do!
Our plan was to consider a reduction with an offer...I think we'll stick with that!