I NEED A FOOL TO BUY MY PROPERTY
Or, actually, I’m praying for an idiot
There’s an old adage in the car business that goes, “There’s a butt for every seat.” The same could be true for real estate, except you don’t see semi loads of crushed real estate headed to the recycling plant like you do with cars. Except for tear-down properties, real estate is relatively constant. As Will Rogers said, “They ain’t making any more of it!”
If you read the headline above asking for a fool to buy your property, that’s exactly what many sellers ask for. Seriously, I’ve heard it time and again: “Just find me some idiot from California. They’re selling tract homes for two million out there. Compared to that, my house is a castle at half the price. Find me some fool.”
In case you’re wondering, the fools got separated from their money during the Great Recession, and not many of them survived. Things slowly built back up until Trump got elected in 2016. We saw the best recovery in decades, and wow, things were happening—until CoVid19.
Do you think there is a fool waiting to buy your property? That was long ago.
Honestly, do you think there are many fools left in the game? People who are willing to pay inflated prices for sub-standard real estate? The answer is definitively “NO”. You see, real estate was very different “back in the day”. Data was tightly controlled by real estate agents who had the keys to the kingdom—the glorious MLS, or Multiple Listing Service. This was an era in which agents submitted their listings on a monthly or quarterly basis to be printed up in a catalog that was distributed only to real estate agents and brokers and kept very confidential. There were strict fines and penalties for allowing non-professionals to access the sacred book.
It’s all data, all the time—real estate buyers aggressively research properties online
With data tightly controlled in local markets, it was hard to know the true value of a property. A buyer might make a screaming deal on a home or piece of vacant land, while 20 miles away in a different MLS, a similar property could sell for three times the price. There was no way for buyers to compare data. That’s all gone now. FINITO. DONE. FERTIG. The internet has blown a giant hole in the idea of agents and brokers holding data hostage in their little printed catalogs. Now it’s all about data, and you can find it everywhere online. Back in the “good old days” or “bad old days”, depending on how you look at it, sellers could list a property and then “rest” it for six months or so to see if the market had improved. No more. Once you list a property, the ticker starts counting.
Real estate buyers are sophisticated and educated—don’t think you will fool them
I’ve had buyers show up in my office with 30 properties on an Excel spreadsheet, with rows for acreage, irrigation, water rights, square footage, elevation, proximity to town, quality of construction, outbuildings, well rights, mineral rights, and much more. Think of it this way—I have 35 or 40 listings, and they have one property they want to buy. Sometimes they know more about your property than I do—or you do—and all the information is online. They’ve flown it on Google Earth and they know what they’re doing. They’ve looked up the sales history on the property, they’ve trolled you on Facebook, and they know every little detail about you. They know if your mother died, if you’re getting a divorce, or that you got a new job in another state. The little printed book distributed once every three months is a total joke. The “fool” or “idiot” in this transaction just might be YOU.
“What’s wrong with it?”--your property can become stigmatized if not priced and marketed correctly
While you’re looking for an idiot or a fool to buy your property at an inflated price (your words, not mine), the clock is ticking, and buyers are looking at the “Days on Market” ticker online. Once you cross over 100 days, people start to wonder “What’s wrong with this property?” Recently I had a seller in his declining years, who had no ability to read data because he was suffering from macular degeneration. The only basis he had to price his property was his feeling for what it should be worth. I battled him for a price reduction. Finally I brought an offer, which of course he resisted as too low. The best data I could present him was the “Days on Market” category. There were several comparable sales, of course, but all had only 60-120 days on market. Because he had listed with a local broker before me and he had resisted my appeals for a price reduction, he had over 300 days on market, which I pointed out to him. That sealed the deal. He accepted the offer. We had another seller who was a preacher and used his mountain cabin to host church groups. His strategy was to “pray for someone who would pay for it”, even though it was 15% overpriced. I pointed out to him that “praying for a fool” was not a very Biblical strategy. Once we got the price at a reasonable point, we got multiple offers.
Get ready to pay higher commissions and marketing fees if you want to overprice your property
Look, I’m busy. Between my son and me, we have about 70 listings averaging about $400,000 each. We don’t have time to mess around. You want us to take an overpriced listing—where your stated strategy is “look for an idiot”—and spend our precious time and marketing dollars on it? Okay, great! Let’s start with a 10% commission, a three-year listing, and a down payment of $25,000 for marketing. “WHAT? How ARROGANT of you!” might be your response. No, seriously, you’re the jackass here. You’ve asked us to ignore the current market, deny the facts we’ve presented you, and give us the task of finding a näive, ignorant, unsophisticated buyer who also has a lot of money to overpay on your property. Honestly, do you think those people exist? Really? They don’t.
Get real with pricing your property or be prepared to wait out the market—your choice
So, are we done here? We have two choices—actually, three. You can listen to reason and price your property to sell it, and we’ll be happy to market aggressively and bring you the highest price. After all, there’s a difference between “listing your property” and “SELLING your property.” The second option is to ignore all reason and, since “find me a fool” is the strategy, find a broker who will take your overpriced listing. Typically, this will be a new agent with a very low skill set or an underperforming agent who has no history of bringing deals like yours to a closing. They just want to go to the bar and tell people about the “dollar value” of their new listing. Or, you can pay us a hefty marketing fee and a high commission, and we’ll do our best to wait for the market to come up to your price. This is an embarrassing scenario for us and we’d rather not do it. We will also not represent you as a seller’s agent, because you’ve already proven that you won’t listen to reason. Or, better yet, list it with someone else and call us in a year. Be advised that the dreaded “days on market” ticker is now out of control. Your property is stigmatized and buyers are wondering what’s wrong with it. Our commission goes up a point for every year that it’s been listed with someone else, because now we have a big mess that you knowingly created. We’ll fix it, but it will cost you. Your call.
Gary Hubbell, ALC, is the broker/owner and auctioneer with United Country Colorado Brokers & Auctioneers and Western Real Estate & Auctions. Licensed in Colorado and Utah, Gary has sold ranches, farms, resorts, outfitting businesses, luxury homes, hunting land, horse properties, country homes, and mountain cabins across the West. He is a proud member of the Realtors Land Institute, where he has earned the coveted designation of Accredited Land Consultant. You can reach him through his website, www.uccoloradobrokers.com