Bad Advice | A Real Estate Blog by Jim Stefanile
A Tribute To Andy Rooney →
by James Stefanile, ABR, GRI, SRES, QSC, REALTOR/Associate, Prudential NJ Properties.
Just when I’d thought I’d seen every wrinkle of human foolishness, life in real estate proved me wrong.
I just lost a deal yesterday, which, in this market, is not all that unusual but the way it went away is what astounds me. We had a tortuously negotiated agreement. I represented the buyer. I submitted the revised offer to purchase for the seller’s signature after the meeting of the minds had taken place. The other REALTOR is an experienced, very competent practitioner so this is no reflection on her.
That REALTOR called me yesterday, saying that they had received the revisions and, now, her seller was refusing to sign, was refusing the deal and was insisting on a bottom line price which both I and the other REALTOR were sure no one would pay. I asked the obvious “why?” and she reported the seller had been getting all kinds of advice from family and friends telling her what a bad deal we were proposing. The agreed price, was, indeed, well under the asking price. The property had gone unsold for 6 months on the market prior to my buyer coming along. I think my buyer was doing this seller a favor, not taking advantage of her, but obviously the real estate experts in the seller’s family disagreed and the seller didn’t have the courage of her convictions to stick to her own agreement.
When I hear about family and friends advising parties to a real estate transaction, I get a terrible, sinking feeling. In real estate we deal in agreements worth, potentially, hundreds of thousands of dollars. I wish there was an addendum to every agreement where both parties promised to be ADULTS, capable of making and being responsible for important decisions without relying on the advice of family or friends who don’t know the first thing about what they’re talking about. In my recent “Buyer Beware” post I touched on this subject. It’s why we don’t allow 12 year olds to buy real estate on their own – they don’t have the decision-making ability. Presumably, anyone over 18 does. Not in my experience. Even in this market when everyone should be rushing to close the deal as a bargain or before the market goes down even further, I am finding that both buyers and sellers, in large measure, are exhibiting 12-year-old decision-making ability which relies on Mommy and Daddy (and Auntie and Uncle and Cousin Zeke and Grandma and Grandpa).
If you come from a family of REALTORS or successful real estate investors, I have no problem with your family’s advice. It would be informed and based on real experience. Alas, that family exists in the minority. Most extended families are populated with members who either have never been involved in a real estate transaction or, maybe, bought and sold 1 or 2 houses in their entire life maybe 20 years ago. I have even, on one occasion, had to gently shush a set of adolescent twins who were invited to be part of a negotiation discussion by their parents.
I said in my “Buyer Beware” post that my advice is careful and aimed at your best interests. The difference with parents, etc. is that most of the “expert” opinion they offer is, often, for the sake of saying something. I understand that parents feel a certain amount of pressure to help their children with advice but can you imagine a parent or family member, when their child is in a real estate deal, saying “Gee, I don’t know that much about real estate, let alone your specific situation”? or “I’m sure you’ll come to the right decision and I’ll be very interested to hear what it is.”
I remember a seminar I attended at my daughter’s college in her freshman year. It was run by two wonderful therapists who had a great effect on me then and afterward, to the benefit of my relationship with my daughter. At this seminar, their main message had to do with “distance parenting”. We won’t be there to hold their hands and that’s as it should be. We should support them, not run them. We shouldn’t come riding over the hill every time there’s a crisis. Our college-age children need to INDIVIDUATE, they need to figure stuff out on their own. If they want our advice they’ll ask for it and that advice should be supportive given with an assumption that our offspring will overcome anything positively and effectively, on their own. This prepares our kids for a successful adulthood and will cement our relationship in reality, not co-dependence. Short of life and death decisions, we should, essentially, butt out.
If only I could run that seminar for every buyer and seller family I encounter! Unfortunately I see many families who are so far from those standards that the children involved in the transaction are incapable of large adult decisions and are at the mercy of uninformed and often foolish advice. When, heaven forbid, the family contributes funds for the transaction, the kids buying the home are almost shut out of the decision making process. And as far as family friends are concerned, they should be seen and not heard, in my opinion. If one of my friends was considering a large investment in artwork I would have nothing to say to him or her because I know nothing about it. Knowing nothing does not seem to stop many friends of my customers from offering all kinds of screwy advice.
My job is to help my clients be successful. I am not their parent or even their friend. My dispassion in the face of the emotional component of a real estate transaction is one of the most valuable services I can offer. A family’s most valuable service to a buyer or seller is, ideally, loving emotional support with the understanding that the buyer or seller is capable of making the right choices. I want my clients to trust me and I want their families and friends to trust them.
Filed under Families and friends, Home Buying
Tagged as advice of family and friends, family advice in real estate