A Matter of Trust

I like to joke with my agents that there are only two reactions one tends to get from a seller, especially a developer. If the property sells fast, the seller believes we underpriced it. If the property DOESN’T sell fast, the seller believes our marketing is inadequate. While I say this tongue in cheek, there is a certain element of truth behind it. The pace of any sale is hard to predict, and it is often complicated for non-professionals to understand the reasons that a sales timeline unfolds the way it does. So here are a few insights I have gleaned over the years about the way in which a transaction may proceed:

•     A quick sale is more likely due to pent up demand than underpricing. When a property reaches the market properly priced, especially now when inventory in many categories is still low, pent up demand will likely drive a quick sale. For several years now we have seen pools of buyers who cannot find what they want, or have perhaps lost an apartment to a higher offer. They stand poised to seize the next opportunity that comes along. So when a new and well priced listing appears, they jump. Frequently the seller’s biggest problem in these situations is NOT to accept too quickly! The seller needs to hold off until the property has received enough market exposure to make certain that a better offer than the first one is not forthcoming.

•    Overpriced properties will linger. Often a seller will feel that she will never know if a higher price was achievable unless she tries it out. Today’s marketplace is transparent. Every buyer has done his research and knows the comparable sales, what else is and has been available in the building, etc. Overly optimistic pricing dissipates the excitement created by the pent up demand described above. The 2015 buyer feels acutely price conscious; if a property lists at more than 5% or 7% above his value threshold, he simply won’t look at it. And a seller who misses those critical first few weeks through overpricing will probably see her property linger for some time.

• Marketing is not magic. We are good marketers at Warburg, as are many of our competitors. We offer an attractive and up to date website, carefully curated high end photography, a strong mix of print and online advertising opportunities. Our superb marketing department works with each agent individually and we are always searching for more editorial promotion for the homes we represent. But it is easy for all of us, agents and clients alike, to forget a basic truism of marketing: the goal of marketing is NOT to sell the property. That remains OUR job, as agents, and the job of the property itself. The goal of marketing is to drive attention to the property – to catch a buyer or an agent’s eye and engage them enough to seek more information or a viewing. If the property receives many hits on StreetEasy or on our website (and the definition of “many” varies according to the size and cost of the property) then our marketing is doing its job. If those hits don’t translate into showings or offers then marketing is rarely the problem. Incorrect pricing, poor staging or some other lack of curb appeal are far more likely to be the issues.

• With any deal, time is of the essence. The most anxious time for buyer, seller, and agent tends to fall between the day an offer is accepted and the day the contract gets signed. Either side can back out of the deal during this period, and not infrequently one side or the other does so. Being prepared and transparent can expedite this due diligence period. The seller’s agent should already have the Board package materials (if the purchase is in a co-op), financial statements, information on upcoming assessments or changes in the building or its immediate environs, the block and lot number and zoning information (for a condominium or townhouse), and any other necessary items ready when the deal is struck. Frequently the agent and the seller can work together to obtain these documents. The buyer should be ready with the name of an attorney familiar with New York property who can review the necessary due diligence items promptly. The briefer the period between offer acceptance and contract, the smaller the likelihood of things going awry.

Moving from listing a property to finding a buyer and shepherding a deal to closing requires a number of nuanced skills. While we all make mistakes, we agents are often blamed for problems which arise outside the bounds of our control. In pricing, timing, transparency – we can often be only as good as the decisions made or information provided to us by our clients and customers. To close a transaction successfully, the agent and her principal must work as a team. Each of us can only be fully effective when mutual trust and confidence enable our relationship.