By Living Room Realty, September 4, 2020
The phone conversation:
“Oh, my gosh guys. Guess what? My neighbor got wind that I’m selling my house –I think they noticed you over at the house meeting with painters and contractors, and now they have expressed interest. They told me that we can avoid paying real estate fees if we work a deal privately. Ugh! What should I do? I mean, I know we had a plan to go to market and you are making the house look so nice, I mean that mural you are painting on my fence looks incredible, but I could save commissions. I feel stuck.”
**** The above scenario has happened to me twice this week. Twice. That’s how crazy hot the Portland market is right now. It’s cut-throat. I’ve been in these situations so many times over my lengthy real estate career. The first time it happened, I wished to hit my client over the head with a frying pan and listen to the sound reverberate like it does in the cartoons. But I have learned to pause and explain my worth – see below ****
My answer:
People are always eager for an opportunity to save money, but you’ve got to ask yourself what benefit the potential buyer gets, and what’s in it for you.
In my experience, it’s usually one of two situations.
In the first, and most likely, the neighbor is likely trying to get a deal by paying less than market value. Note that it couldn’t be that they expect to save paying real estate fees themselves as the buyer doesn’t typically pay the fees, the seller does (though of course most sellers do factor in fees when determining their bottom line).
In the second situation; they simply aren’t serious. They’re testing the waters, and that’s a lot easier to do without a motivated real estate agent working to complicate things for them. If you put your plans to list on the market on hold and they then change their minds, you’re left holding the bag. If you have a potential buyer like this, tell them to make an offer when your property is listed on the market. It’ll make life easier for both of you.
Last month, we were preparing to list a home in close-in SE Portland. Just before we went to market, a friend to my seller approached her to try and work out a deal. One that would put agents aside and be potentially headache free. My sellers loved the idea of selling their home to their long-lost friend. We talked about the options, whether they could do their own paper work, was the buyer really serious, did they understand disclosures etc… Ultimately, our clients offered the home to their friend for $580,000 a tad less than what we were going to put it on the market for. The friend balked at the price. They had never broached what the price would letting their enthusiasm overtake the ‘business side’ of the transaction. The buyer-friend was hoping to get the home for much less. Imagine the emotion involved when the high-fives didn’t get thrown around.
We then took the house to market, worked the property quite hard and received 6 offers. The house is selling for $48,000 over asking. Far higher than our clients would ever have dreamed it could sell for.
It comes down to this: Work equals value, and skilled work equals higher value. A real estate agent is working for you, bringing their skill, experience and reputation to the transaction.
