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The Spirit|Westsider westsidespirit.com
MAY 16-22,2019
Business
Ask a Broker
Photo: Stann Lee
OUR FRIEND WANTS TO BE OUR BROKER BY ANDREW KRAMER
One of our friends, who also lives in our building, is a broker and would very much like to list our place when we put it on the market. We like her, but she works for a small firm and we question if she’s the right choice. We’ve interviewed a few other brokers and there’s one who made a great impression on us. We’re concerned if we go with him it will not fare well with our friend. What’s the best way to handle this? Politics don’t only exist at 1600 Pennsylvania Avenue. When it comes to real estate, it can hit home regardless of your address. Everyone knows a broker or two, and you don’t want to spoil a friendship based on who you hire. For example, if things aren’t going well with your sale, it’s hard to yell or fire a friend. However you don’t want to put an end to a friendship by going with someone else. If this is causing you sleepless nights, the best advice I can offer is hire both agents (a.k.a. a ‘co-exclusive’) and let them share in listing your home. This will be a winwin for everyone. You’ll keep your friendship on good footing while getting the best exposure for your property. Both brokers will also share the commission that comes their way and half of something is certainly better than the alternative! Once it’s sold you can all go out to dinner to celebrate.
Photo: Steven Strasser
THE PSYCHOLOGY OF BUYERS AND SELLERS REAL ESTATE Though they represent opposite sides in a negotiation, they want the same thing — but for very different reasons BY FREDERICK W. PETERS
Buyers feel excited. Sellers feel nostalgic. Buyers look ahead. Sellers look back. These differences help to explain the profoundly different psychologies with which buyers and sellers approach both a marketplace and a negotiation. Buyers and sellers not only represent opposite sides in the negotiation equation, but also experience the tugs of the give and take in very different ways. Agents spend their professional lives in the middle of this equation, trying to get the two sides to balance out so the problem can be solved. In order to succeed with this delicate task, agents must first manage the profoundly different motivations which animate their principals.
Buyers feel excited. It’s a truism of real estate markets that in a rising market, buyers adjust quickly, while in a declining market, sellers adjust slowly. Why? Part of it is as simple as the laws of supply and demand. In a rising market, demand tends to exceed supply; under these circumstances auction fever sets in. Most people instinctively value something more if someone else want it too. But other factors also impact buyer behavior. A home purchase signals an investment in the future, a commitment to looking ahead. Most buyers experience this as energizing and exciting. In that frame of mind, caught up by the scarcity of supply, the possible interest of other bidders, and their own excitement as they visualize themselves in the property during the months and years ahead, buyers may well stretch to secure the home. Sellers feel nostalgic. Unless the property under consideration has served only as an investment, chances are the seller or his/her family have lived there. This cre-
ates an entirely different dynamic for the seller than that experienced by a buyer. The seller is likely to imbue the property with excessive value precisely BECAUSE it belongs to him. He will detail to his broker the things which make it better than other similar properties available for sale and feel offended if the agent disagrees. His view of the property, often unrealistically, revolves around his memories of the role the home has played in family life and the events which he has experienced there over the years. Just as the buyer’s excitement centers around the future, the seller’s attachment tends to revolve around the past. Sellers’ reluctance to reduce prices in a descending market reflects the words of the famous tune from “Cabaret,” — “If You Could See Her Through My Eyes.” If you understood how much this place means to me, you would never devalue it this way! Understanding these two perspectives and their ramifications marks one of the areas where
agents become indispensable to facilitating a transaction. In an up market, we try to apply some brakes to buyer enthusiasm to make sure they think through all sides a decision before impulsively leaping ahead. At the same time, we remind sellers that the mauve bedroom which Mom loved so much may not translate for a stranger entering the property and looking to imagine their own life in it. And in a down market, we remind the buyers that a home purchase is like a marriage: you don’t go into it with a two year window and you have to envision the life your family will enjoy there. At the same time we remind sellers that lowering the price to reflect changed market conditions doesn’t devalue them or their history in the home. When both parties can be brought to the present moment, blending the past experiences of one side with the future hopes of the other, that is the locus of consummated transactions. Frederick W. Peters is Chief Executive Officer of Warburg Realty Partnership.