Urban Legends
The purchase and/or sale of residential real estate unfolds at the juncture between business decision and lifestyle choice. It is thus subject to a series of beliefs, on both the buyer and the seller sides, which reflect the uncertainty of that rather hazy intersection. Neither strictly a nuts-and-bolts, by the numbers choice, nor one in which the splurge mentality which can apply to shoes, or cars, or jewels, easily applies, this very large, yet very personal purchase has given rise to its own mythology. Herewith a few of those myths, and my attempt to debunk them:
Myth 1 – I might as well hire my cousin’s sister-in-law’s aunt as my agent. They all do the same thing. Actually, no. Residential brokerage is a highly skilled profession which takes years of experience to develop real expertise. A broker who is intuitive, savvy about the intricacies of the market, a good negotiator, and a strong but reasonable advocate will save you money (and often the deal)and facilitate every aspect of the process
Myth 2 – It only takes one person to fall in love with my property. While this is self-evidently true, it is usually code for “I don’t want to lower my price.” It is thus in the same category as “Why don’t they just make an offer?” The answer is, these days if they think the price is too high, they will just move on. They will doubt that a reasonable offer can succeed. While W.C. Fields may have been right about a sucker being born every minute, you cannot count on any of them showing up on your doorstep.
Myth 3 – It cannot hurt to make a very low offer. In fact it can. It risks angering and alienating the seller. And once the seller is alienated making ANY sort of deal with him/her will be that much more challenging. Be an aggressive negotiator, but be reasonable. It is no longer 2009!
Myth 4 – I know the market will be going down, because (fill in the blank…) I will buy after it does. I have heard this line, mostly (with apologies) from finance professionals, for over 30 years. Here’s the interesting truth: when the market really DID go down, in 2009, almost no-one had the courage to buy. Those who did got amazing deals, but most did not. No matter what they tell themselves, and us, most people just don’t have the stomach to go against the prevailing tide.
Myth 5 – I know the Board has a financial formula. Just tell me what I need to show. Very few Boards have a formula. And every application, like every buyer, is unique. So there is only one way to go when preparing a co-op Board package: full disclosure. The buyer who tries to outwit the process is most often the buyer who gets into trouble. Tell the truth, the whole truth, and nothing but the truth. Show and document all assets; don’t puff them up or scale them back.
Myth 6 – If I sell my property for less than I paid for it, I am losing money. Not necessarily. The all important issue when selling relates not to the absolute price, but to your next step. If you are selling to buy a bigger place, a lower price can, oddly enough, work in your favor. If you bought for $1,500,000 but you are selling for $1,350,000,that means the market is down 10%. So the property for which you would have paid $2,000,000 is now going to sell for $1,800,000. You actually end up $50,000 ahead. It is always better to trade up in a down market; it saves you money. When you are selling and buying in the same market, all that matters is the difference in price between the two transactions. The absolute numbers (tax considerations aside) are irrelevant.
Our job as agents is to help our clients maintain balance between the personal and financial aspects of these highly fraught transactions. Deflating the urban real estate legends is part of what we do.