We frequently get asked all kinds of questions about what happens during the real estate transaction process. Usually, we get questions about what colors are in, what the market is like, or how quickly homes are selling. Simple, easy questions that can be answered rapidly and without too much brainpower.
Yesterday, though, a buyer threw me for a loop by asking me a great question about the psychology of the real estate deal. I was so happy because this stuff is right up my alley! (My degree is in Psychology and Marketing).
The question that was asked was, "what is the listing agent trying to hide when they sell a house?"
Great question, huh?
When Eric and I list a home for sale we work hard to make the home look appealing and very attractive, we market it everywhere, but we also do try to keep a few things "on the down-low" as they say. Here's the short list of the 3 major things we don't want you (the buyer) to know since it could hurt our seller's negotiation position.
1. The reason for the move
If there is a divorce or there's a need to get moved quickly, the buyer will use this information to try to get the best deal because they realize the seller is in a tight situation. A good listing agent will keep that information close to the chest to protect the seller.
To avoid telegraphing weaknesses, we help our clients stage the home so there's no hint of strife or urgency. The staging that we do in these situations works to remove any hint of trouble on the seller's side. If you are under the gun to get moved, tell us about your sense of urgency, and we will do everything we can to make sure that this doesn't end up hurting your negotiating power.
2. What the sellers are like - because personalities can kill deals!
Sellers and buyers hire agents to represent them in real estate transactions because they know that a representative is more likely to keep cool, negotiate with a clear head, and know what problems to avoid so that everything gets worked out without a hitch. We know what to look for and how to avoid landmines that can hurt the client and the bottom line.
All that being said, however, I have never represented a client who didn't want to know about the person or persons on the other side of the table. The inevitable, "I wonder why they're moving question" is just the start of the curiosity that a listing agent is trying to work through.
You can tell so much about a personality of the homeowner when you visit their house. You can tell if they are clean, how artistic they are, what they value, etc. As a buyer's agent, I try to figure out what a seller is about and I know my clients do too. We will stalk sellers on Facebook, try to decipher the personality from belongings and even talk to neighbors to try to get some information that will help in our mission to purchase at a good price.
The buyer's agent is trying to get the best terms for the buyer, but the listing agent wants the same thing for the seller.
The representative for the seller, the listing agent, wants the buyers to visualize that they can live comfortably in the home and that the property has been well loved. When we represent the sellers, we subtly remind the buyer and their agent that the sellers are good people, but we also continually take most of the focus back to the actual home itself.
As a listing agent, you do not want the buyers to get fixated on the seller's tastes or the seller's personality. So we work with the sellers to set the tone of the sale. We even stage the home to subtly remind the buyers that the decision to buy this property is a smart move, and we make sure that all social media is sending out a positive, confident message as well.
3. How much a seller is making on the sale
Buyer's and their agents can figure out a rough guesstimate on what is remaining on the seller's loan based on information that is available to agents on our multiple listing service. The agents can extrapolate from that information to get an idea about what type of profit will be made because of this sale.
I can tell you that buyers love trying to move some of that perceived profit to their side of the balance sheet. Plenty of times I've heard comments like "for God's sake, he can afford it, he's making great money on this house." Or, "if I'm paying this price, this seller better do repair everything." and so on.
Remember, it's a money transaction. Both sides are working to further their own interests and most times they are not concerned about being nice to the other side. Greed can raise its head rather quickly.
For this reason, we never share information about profit to be made, we discourage speculation and we work hard to help the buyer and their agent to understand that the profit made has nothing to do with actual market value.
These are the three major things that we may need to hide as a listing agent.
If there are problems with the roof or the hot water heater and we know about it, we'll tell you all about that right up front, but ask me why my seller is moving, what the seller does for a living, or if the seller will miss the house and I'll ask you why that's important to you. After all, you're buying a house, right, not the seller's personality or their circumstances?