This morning I bring you the first (and last) installment of Kris’s Most-Awesome Movie Review. Now in theaters, the bestselling book Freakonomics comes to life on the big screen. Yippee!
First, the trailer:
Oops. Wrong trailer. Try this one:
So, should you accept that first offer? We have always said that the answer depends on “things.” We foolishly have been advising our clients for years that it depends on “things” like how strong the offer is relative to market value and on other “things” like their own motivations and (snicker) needs. Sometimes we have even suggested it depends on things like the market in general, and we have even been so slick as to pull out little trend lines and stuff.
We were just messing with you.
Whatever you do, don’t take that first offer! If you wait a week, you will make 10% more. Guaranteed. Every time. Rain or shine. Freakonomics says so.
It doesn’t matter if you are overpriced. It doesn’t matter if we are partying like it’s 1995 or if there is a Notice of Default cloud looming. It doesn’t matter that your new job in Bucksnort (that’s in Tennessee) starts on Monday. Sit tight. It’s only going to get better.
Why didn’t we tell you this sooner? (Insert sinister laugh here.) It’s because we are only concerned with one thing – making a fast sale. Our reputation, our credibility, “things” like client satisfaction and a visible means of support tomorrow once your moving truck has left the building – these little nuances of building and sustaining a career are meaningless to us.
If you are a seller, we want to slam that puppy home as quickly as possible, because the extra fee we will realize due to the incremental increase in sale price is chump change. Time is money. Gotta move on. Just sign the stupid contract already! If you are a buyer, we have a different agenda, of course. We want you to pay the most money you are willing, because we make more that way! What I couldn’t do with that extra thirty bucks.
Yep, that’s how we roll. We are greedy, greedy, greedy. In fact, just this week, as I was wrapping up a four-week long process in preparing a home for sale (presumably “to maximize the seller’s proceeds,” at least that was the party line), I had to chuckle. As I was paying the painter (the seller says they will reimburse me as soon as they find their checkbook), and as I was looking over the results of the staging (that I paid for) and the landscaping tune-up (cost for which I fronted) and contemplating how the brochures turned out so wonderfully (I charged them) and… Well, I couldn’t wait to laugh all the way to the bank, my evil plan well in place.
Maybe we will get an offer first week! Then, I can convince the seller that this will be the best offer they will ever see, regardless of price. Because, you see, like the doctor who doesn’t really want to cure you – he just wants to run an endless battery of expensive tests to pay for his trip to the Hamptons – I just want to log another “sale.” Referral based businesses are for sissies.
Customer satisfaction is overrated. It’s not like people talk or anything. It’s not like the neighbors will be drawing little mustaches on my likeness or painting me with a scarlet letter when they realize I was the Captain of the Starship Underprice. Who cares about them anyway, the neighbors? It’s not like this is a career or something. It’s not like I live in that house on the corner you pass on your way to work every morning and care about neighborhood housing values myself. And the last thing I want is happy clients – repeat clients. I much prefer to spend thousands of dollars a month trying to identify and score new, unsuspecting marks that I can send down the river.
The reality is that the Freako-no-clue-about-my-business guys are right. Every week you stay on the market, you will get an offer 10% higher. I just didn’t want you to know that. It doesn’t matter if you are priced too high or if you are living in 2003 or a declining market, and that little matter of latent demand is a thing of myth. There are plenty more buyers who have been waiting for a home like yours, with the third-car garage converted to a taxidermy studio and the collection of garden gnomes that is a thing of legend. And they will be coming around next week and the week after.
Oh – and one more thing. Buyers never factor market time into their negotiating strategy. One day or 120 days out, it doesn’t matter. They will offer whatever you want, or close to it, and like a fine wine (like I would know), it just keeps getting better with age.
So, taking that $200,000 list price today, don’t listen to me. Chill. Hang in there until May, and your home will be worth a cool $448,000! No, wait, it will be worth more, because some months have 31 days!
Now, if you are buying, I like to take a different approach. I want you to pay a boatload for that home! The underlying game plan is still the same, though – to leave you talking smack about me to your friends, your family, your new neighbors, and the pizza delivery driver. Those clients I worked with for 18 months before they were in escrow was a fluke. I was off my game. And I had to pay a price, all right. They referred four other buyers to me that I had to cart around and write offers for. It really cut into my free time. Can’t let that happen again. My time would have been better spent manning a booth at the Farmers Market each weekend with 400 free CMAs pinned to my collar.
Oh, and don’t forget that the Freako-OMG-books-and-now-a-movie! boys tell us that agents wait longer and sell their homes for more than civilians. Not having seen the data, I will assume that we are talking only about primary residences, not investment properties (even though agents tend to invest in real estate) and that the motivation was therefore the same. I will assume that we did not just consider boom years where time meant higher prices – just because, well, that would have been a flawed data set. And I will assume that agents don’t think a little harder about things like resale value and steer clear of the properties backing to the water reclamation plant or the Jiffy Lube.
So, whatever you do, don’t trust your agent. There is no “you” in partnership. That would be “partnurship,” and we all know that isn’t a word. Rather, you should trust the guys who wrote the books and cut the movie deal while I was mopping your floor to kill time until the photographer finished his twilight photo shoot. And I didn’t do it to make your home more attractive to potential buyers in order to maximize your bottom line, because I don’t care. I just like to mop up messes.