Buyers Don't Give a Crap about How Much Debt You Have
For those with tender sensibilities, I would suggest clicking away to something more...ahem....diplomatic.
However, for those who are not allergic to cold hard truths delivered in street language....welcome to my blog.
Here are 2 hard truths that you, as a potential homeseller, need to come to grips with if you plan on selling your home in this market (and by this market I mean Gainesville, FL....though the following truths apply to many other markets in the U.S. as well):
1) "I need to get X amount out of my house so I can pay off my debts."
Dude. Homebuyers do NOT give a crap about how much debt you have. If you bought your home in 2005, 2006, 2007 -- what I've come to think of as The Magical Years -- you are screwed. Okay? That's the long and the short of it. This is still a buyer's market. With the amount of inventory we are carrying, it probably will be for awhile.
You know those commercials where they say "It's a great time to buy?"
Well it IS a great time to buy.
So let's think about this for a minute. If it's a great time to BUY, what kind of time does that make it for YOU?
If you answered "A completely sucky time"......you are CORRECT!
You cannot price your home based upon how much debt you need to pay off....you have to price your home at the going market rates....and the going market rates are NOT what they were in 2005, 2006, or 2007.
They are LOWER than what they were in 2005, 2006, and 2007.
So please don't yell at your REALTOR(R) when they present you with the pricing statistics of recently sold properties.
Yes, we KNOW you want more for your house.
But you can't GET more for your house than what somebody, a BUYER, is willing to pay for it. And THEIR idea of the "going market rate" for your home is a LOT more important than what YOUR idea of the "going market rate" is.
Why?
Because THEY are the ones bringing the offer. And THEY are the ones who have been preapproved and therefore have the money to buy your home.
And if YOU don't say yes, THEY have lots of other homes to choose from....and, more and more often, these choices include short sales, and bank owned properties, and new build homes that desperate builders are trying to unload on the cheap.
So before you get yourself all up in a knot over a lowball offer, try to remember that these buyers are just doing to you what you are going to try to do to the seller of your next home....and that is, get the BEST deal they can. And in this market, buyers can get themselves a pretty darn good deal.
So you may not be able to pay off all your debt when you sell your house. That's just the way it is.
This is not to say you shouldn't counteroffer. However, keep in mind that a counteroffer means that the original offer is dead....and if you counter, there is no guarantee that the buyer won't have already decided to walk and buy something else instead.
It happens. Not always, but it does. Just something to keep in mind.
2) "But I don't want to bring money to the table."
Who does?
Look. If it makes it easier, just look at your home sale as a case of you going to Vegas and losing your shorts. The good news is, when you do sell your home, you can turn around and lowball the offer for your next house. That's the American way.
Now, if it's a case of you CAN'T bring money to the table, that's a different thing entirely. Some possible options to consider are to 1) not sell, and wait for things to get better; 2) rent out your home and wait for the market to improve; or 3) sell your home as a short sale. REALTORS(R) cannot advise you regarding the most financially feasible options for you and your family. A frank discussion with your accountant or financial advisor will give you a good idea of what your next steps should be.
I'm Coleen DeGroff. And I'm just sayin'.
Coleen DeGroff, MBA
Coldwell Banker M. M. Parrish, Realtors
3870 NW 83rd Street
Gainesville, FL 32606
Office: 352-372-5375; Cell: 352-359-2797
LOL.... This should be a part of a listing package but I'm a little diplomatic. Good stuff.
Boy did you say it, and without any question of what you are sayin...
I couldn't agree with you more. I tell people they are not hiring me to pay their debt off, they are hiring me to sell their home.
You go girl...
Yea, I hear many of the same statements myself. My response many times is 'then now is not the time to sell'.
I absolutly love it!!! I wish you made this a reblog- cause i would definatly honor you with one;)
Hi Sheri - Thanks. It is part of my listing presentation. I'm the Grim Reaper of real estate.
Hi Andrea - Thanks. It's not exactly the message we would LIKE to share with our sellers, but in our market it's certainly the most ethical thing. Too bad you don't live here ..... we could be twin turds in the real estate punchbowl! :)
Hi William - Amen to that!
Hi Shanna - Glad you liked it! :) Thanks for stopping by.
You said it well. You'd make a lousy diplomat, and that's a compliment. :)
Very funny and very true. People who need to sell or want to sell need to understand homes only sell for fair market. Buyers are not going to pay more than they have to like you said this is not 2005, 2006, or 2007. I like your style, I love your honesty and you have hit the nail right on the head!!
Hi David - Thank you!! :) Couching things in subtle terms has never been my thing.
Hi Elysium - Thank you so much! I'm not everyone's cup of tea, though....which I explain to new customers I meet for the first time. If they need the Mary Poppins type, things definitely aren't going to work out. :) Thanks for stopping by.
Very brutal Coleen and so very, very correct. Buyers know they can buy a lot of house for the money right now, and that's what they're going to do. If you're not priced right, you're going to be sitting there for years to come.
Yup. you are right. This is business, not a be nice to everyone transaction. The market will take charge, after all that some try to do, the Buyers will shy away from Sellers trying to get a certain price.
GREAT MESSAGE! More appropriate words are rarely spoken. The seller can save their breathe. No one helped you get in this mess of debt and they cannot be expected to get you out. It is about the house, not your personal issues.
Hi Gary - Thanks. It IS brutal, and I'm just not sure how you go about making it a pretty message. And if we try to make this message pretty for our sellers, they could end up thinking it's not that significant a problem. Thanks for stopping by.
Hi Bryan - I think there's still a way to make kindness part of these transactions. However, if sellers do not face these cold hard truths before listing their home, they're not gonna be feeling the love.
Hi Charles - You're right. It IS about the house. Which is why it is imperative that sellers understand that bringing money to the table (especially if they bought between 2005-2007) is a very real possibility. As someone who recently lost close to $200,000 selling a home we bought in 2005, I can empathize mightily with their plight. However, it DOES mean that I carry the world's smallest violin to my listing appointments.
Coleen...A really great message!
Flagged and Featured In Cosmic Cow Pie
Hi Carra - Thanks for stopping by with your cow!! :) Appreciate the flag and feature!
Coleen - You are absolutely correct, it's funny how people come up with the value of a home. I remember back when the market was rising buyer's would look at what the seller paid and would want to make an offer based off that amount.
Hi Michelle,
I remember that too. In fact, I think we actually tried that when we were in a rising market in Colorado. :) Thanks for stopping by.
Sometimes you do have to lay it on the line for some people. They need cold hard facts.
Hi Robert - I hear that. I'm one of those people! :) Thanks for stopping by.
Coleen, This was cracking me up. I am not a diplomat. I am a straight talking chick with no time to waste.
Here is a quote from MY ACTUAL WEBSITE:
"If you are looking for someone to pretend along with you that only your home was excluded from the effects of the economy over the last 3 years, we are not the company for you."
I am not everyone's cup of tea and I don't want to be!
Have a great day!
Coleen,
A former US diplomat, I'm not going to give your post to potential sellers. I did post that conveyed the same sentiments but had a waving flag. Your post is more amusing, however!
I LOVE THIS Coleen and I LOVE Jenna #19's quote from her website!
You're dead on and there is something I was taught by my CRE mentor -- and I have repeated many times to prospective sellers and when considering an offer . . .
"If you can't afford to do the deal then perhaps you should not do the deal."
It's that simple. The market is what it is and the 'back then' has nothing to do with the 'now'.
You make your money when you buy, not when you sell and if your decision was not properly thought out as to cause you to fall short, it is not the buyer's fault or problem.
I also get a kick out of sellers who say "Well when I bought this house in 2005 it was AS IS and I'm not making any repairs -- the buyer can buy it the way I did." Okay but you may not HAVE a buyer to tell that to if you don't babe out the house to compete with BETTER ones in the same price range!
Hi Jenna - Sounds like we'd be disinvited from the same parties, girlfriend! LOVE your website quote! Thanks so much for stopping by. :)
Hi Irene - I'm nursing hurt feelings over here that I am not included in your listing packet. :) Seriously, though, my message is more for the "need a 2X4 upside the head to get it" crowd....that's the crowd I run with! :) Thanks for stopping by. Good to see you!
Hi Candice - Yeah, I was totally digging Jenna's comment (#19) as well! Nobody likes to hear they're going to take a financial beating.....an even MORE fun thing for us (NOT) since we get to deliver that message for FREE. Here's hoping things will soon start righting themselves and we won't have to deliver this message quite so often to so many.
There are some that don't want to get it...it's hard to face that everything they worked for went down the tubes.... even worse when they keep paying on the home until they exhausted everything they had. What can we do when they can't 'hear' what we're saying.
Hi Celeste - I don't think anyone truly wants to get it....especially if you bought between 2005 and 2007, it seems like a giant cosmic joke. And it certainly is NO FUN at all when you're the one who has to tell the giant cosmic joke to sellers....because there's no good punch line.
I try to get my strength from the fact that life is not about "things"....there are bigger issues at play in this life...and if we get caught up in trying to hold on to the tangible and temporary we'll miss the bigger picture.
Tough to remember sometimes.
Hi Colleen - Sometimes blunt and direct is the only way to get the message across. I phrase it just a little different ... "the market doesn't care what you paid for the house, how much you need to net, etc." That way they don't see buyers as adversaries, but rather the impersonal market as the villain.
Hi John - I've always loved that phrasing as well....though it doesn't always occur to people that "the market" means "real people"....and when the crap offers start coming in, all of a sudden the talk about "the market" seems long forgotten and it's the "real people" they're ticked off at.
I give great credit to agents who can get these ideas across to sellers using "the market" terminology though....good for you! :)
Thanks for stopping by.
Hi Coleen - Boldly said and to the point.
Sellers need to be realistic and have a good game plan when selling their homes at this time in the marketplace. I can handle the truth and some sellers need to hear the truth loud and clear. The sooner they are on board, the better off they will be.
What? I'm confused.... Tell us how you REALLY feel, C"ah"leen! LOL!!
You're right. There are many times when people simply don't want to face reality, and you just have to be brutally blunt and honest with them. In the end, it's for the best. At least it'll help them end their fantasies and begin to live in reality and make the hard decisions that they've been putting off while fantasizing that the drop in the real estate industry won't affect them.
It sucks to be the bearer of bad news to good people, but know that it takes a strong person to step into that role. In reality, most people, including the seller's friends, family, and previous agents they've talked to, don't want to be up front about the situation. Those folks are only hurting potential sellers, by enabling them to live in their fantasy land too long. People want to be liked so much, that they tend to just be agreeable, and not honest. Good on ya for being strong enough to be honest!
Hi Dan - Yup. That's pretty much it in a nutshell. Thanks for stopping by....see you at next week's SEO to the Top Class! :)
Hi Marie! - Another SEO to the Top buddy! How cool is THIS?!? Yeah, I can be a tad blunt...I think that comes from the fact that when people try to be all diplomatic and stuff with me, I totally don't get it. My polite strand on my DNA is a tad warped.
Anyway. You're right, it's absolutely NO FUN giving sellers the bad news...on some level I can't help feeling like it's all my fault (that Irish Catholic guilt complex never goes away!) Thanks for the compliment. You're too sweet! :) See you next week in class! xo
And then there are those who still have equity, but still want to sell for a certain (unrealistic) amount. "Dude" (as you would say) "you're lucky you're walking away with some cash!!