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Buyers are Liars?

September 9, 2008

shhhhThis is one of those hush-hush behind the scenes industry phrases that is never supposed to be heard by the general public. But I have a different philosophy and I think honesty is almost always the right policy. So let’s talk about what this statement means and why almost all seasoned (and even green) Realtors have yelled it out, while simultaneously pulling their hair from their heads.

To begin with it must be understood that residential real estate is a straight commission profession. We get paid if and only if we sell a home. It doesn’t matter how many houses we show, how many contracts we negotiate and submit, or how many properties we have listed. If we don’t sell we don’t earn a single cent. It is sink or swim in this business. Most sink fast.

So we’re off to a rocky start from the beginning. Only salespeople know what it’s like to work long hard hours for FREE in hopes of someday getting paid for their work. Most other jobs are rather secure in that the employee has a pretty good idea of how much their paycheck will be at the end of the week. In real estate nothing is sure. Getting paid is the most uncertain aspect of our jobs.

Imagine being in this situation….

You’re a Realtor working with a young married couple from New York. Showing houses to them is a pleasure for a variety of reasons. First and foremost, it is always nice to know you have buyers that absolutely MUST buy a home soon because their company is relocating them to Florida. If you exceed these buyers’ expectations you have a sure paycheck. And paychecks are good. Would you agree? In addition to seeing green at the end of the tunnel, you’re also having a pretty good time with these guys. They’re fun, friendly and seemingly loyal.

After showing about 12 houses to them over several days you know you’re close to writing an offer. Many of the homes you’ve shown them have really been nice and from your market knowledge these buyers can’t find a better deal anywhere.

So the 3rd day comes and you wake up bright and early feeling confident that today is going to be the day you go under contract with your New York buyers. As you make your pot of morning coffee you’re tossing around ideas for closing gifts. Should you give them a gift certificate to a quality Italian restaurant? Or maybe a gift basket with wine, cheeses and other snacks. Well, there will be time to make that decision as most closings happen 30 – 45 days after the effective date. But it’s fun to think about anyways.

But something strange happens when you call Mr. and Mrs. Buyer this morning. Mr. Buyer says they’re going to have to pass on getting together today because Mrs. Buyer doesn’t feel well. She started feeling sick last night and it “just might be the flu.” Better give them a few days to handle this unplanned setback.

As a skilled Realtor you know these things happen and it doesn’t do any good to allow yourself to get frustrated. Real estate is a virtual roller-coaster ride of emotions and finances and only those with a strong stomach can survive.

So you wait a few days and call Mr. Buyer to see how the wife is recovering. Straight to voice mail. After leaving a brief, yet upbeat message you decide to not be pushy and wait for them to call you back. After all, you feel you have quite a bit of rapport with these buyers and you don’t want to ruin it by being insensitive to their health problems.

Several days go by and Mr. Buyer hasn’t called. You call again and leave a message – this time saying, “I hope I haven’t done anything to scare you off or offend you,” even though you know that isn’t in the realm of possibility. You’ve gone above and beyond with these buyers and surely they realize this. There is nothing to worry about.

But the phone never rings. And none of your emails or subsequent calls are ever answered. Your stomach drops as you realize what you thought was a sure sale is clearly not such a sure thing. Several days of trying to make contact and nothing.

So you call Mr. Buyer back, but this time you hit *67 to block his Caller ID from identifying who is calling. He picks up…and stutters and stammers a bit as he is clearly caught off guard with this unplanned and unexpected phone call. “Hi Mr. Buyer. This is Chris O’Connor with Charles Rutenberg Realty. I haven’t heard from you in over a week so I just want to touch base and see where you and your wife are at with the buying process. We looked at some great homes and I saw the excitement in your eyes on several of those homes. I have bad news about the house on Elm Street. I just noticed in MLS that it is under contract, so it looks like that one might have slipped away, but the 4-bedroom home on Sycamore is still showing active and it looks like they dropped the price another $10,000. Have you and your wife talked this week while she has been recovering her health? Are you still looking to buy a home?”

Mr. Buyer proceeds to stick a dagger in your heart by sharing with you the following:

Mr. Buyer: “My wife and I actually found a house and are under contract already.”

Realtor: “You bought a house this week while your wife was sick? I thought you were working with me as your Realtor? What happened?” What did I do?”

Mr. Buyer: “It really wasn’t you. It was more us.”

Realtor: “What do you mean? What does that mean? If I didn’t do anything wrong why did you allow me to work so hard for you and then you bought a house without me?”

Mr. Buyer: “Well, we didn’t really plan it that way…it just happened.”

The above scenario isn’t really make-believe. It happened to me a few years ago. I thought these buyers and I had total rapport. I spent the better part of a week showing them houses in the heat of the Florida summer. Not only did I show the husband and wife, but they brought along about 4 other family members.

Long hours. Wasted time. Gas money. Frustration.

And when all is said and done these buyers bought through another agent. Who was this agent? In this case I didn’t investigate and find out, but much of the time the other agent is a family member that has a real estate license, but works a full-time job somewhere else. They don’t have the time to drive their brother or cousin around to look at houses. So they deceive a full-time Realtor, together as a team, and then ultimately deny that Realtor a paycheck. They use the Realtor.

This is commonplace in the world of real estate. Hence the phrase, “Buyers are Liars.” Working with buyers is the most difficult part of real estate because there really is no means to achieve buyer loyalty. As a Realtor you have to look at each buyer and make a judgment call. Knowing that we might get burnt by a buyer we try our best to screen them before showing them houses, but even after concluding that a particular buyer is a good, honest and ethical person…another burn.

Obviously, not all buyers are liars. In fact the majority are just like you and me. The moral of this story is to treat people how you would like to be treated. The Golden Rule applies in just about all arenas of life, and real estate is no exception. If you’re a potential home buyer show your Realtor some loyalty. This is a hard enough profession. If you’ve been treated right by your Realtor return the favor and maintain loyalty. Any Realtor can show you any house in MLS. There is no reason or benefit to calling all the signs yourself. Find a knowledgeable Realtor and stick with them. In the end you’ll develop a relationship with your Realtor and succeed in negotiating the best deal. And you’ll probably feel good about being honest.

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