I generally answer questions in this space, but this time, I’d like to tell a story. It’s a cautionary tale about the importance of having professional guidance when stakes and emotions run high.
It started with a call from a client. We’d been shopping for a home together for the past few months, and when an out-of-town “For Sale By Owner” (FSBO) property caught their eye on Facebook, they wanted to see it.
There was no MLS listing, so my client replied to the Facebook post to set up an appointment. Typically, I like to shelter my clients from interacting directly with sellers (or buyers) on the opposite side. It’s far too easy to compromise your negotiating position by inadvertently revealing personal details in friendly conversation. Unfortunately, being forced to communicate through social media strips away this level of protection.
As a courtesy to us (or so they thought) the sellers shared that they had an offer in hand already, which was set to expire later that afternoon. We had just enough time to reach the home before the deadline, so my clients advised the sellers that we were on our way. I drafted a competing offer for us to have in hand in case this house was “the one”. My clients and I hit the road in a whirlwind (and in separate vehicles), discussing our negotiation strategy over Bluetooth along the way.
We arrived at the house with minutes to spare. My clients fell in love as soon as they stepped through the door. I had a quick conversation with the owners to explain the terms of our offer. It seemed to make them uneasy, so we stepped outside to give them some space.
In just a few moments, the owners called us back inside and shared that they had accepted their other offer two minutes before we arrived.
My heart sank, not just for my clients, but also for the homeowners. Because they were selling on their own, there was no one to tell them they could have bought themselves enough time to consider all options by making a small change to the offer they had in hand. The fear of loss took over, and a hasty decision was made. A low-cost DIY approach and a lack of professional guidance probably cost these owners tens of thousands of dollars. But at that point, the house was sold.
Expert advice earns you more than it costs, which is the reason why professional athletes never negotiate their own contracts. Pascal “Spicy P” Siakam may lead the Toronto Raptors in scoring, but when it comes to salary negotiations, you can bet he relies on his agent. My foul-line stats are nothing to brag about, but I negotiate hundreds of contracts a year, and protect my clients by making choices based on experience, not fear of loss.
In my opinion, the homeowners in this story ended up underselling their house by at least ten to fifteen percent compared to the market. I understand that people may be looking for a low-cost way to sell in times like these, and realize that social media may seem an obvious choice, being widely accessible, highly visible, and practically free. These platforms can help spread the word, but social media is a tool — not a negotiating strategy. In the end, you’ll always get what you pay for. #AskDavid #Advice