We temporarily withdrew a listing this week. It had to do with the arrival of a new baby and a septic system (not in that order and, thankfully, not mine). I will spare you the details, but know that the two are unrelated. As I do every time a listing is stalled, canceled entirely, or just too long on the market, I enjoyed my own little moment of silence. I mourned the loss — lost time and lost resources. I mourned a balance sheet now a few thousand dollars lighter and hours upon hours spent sitting open houses and nurturing and attending to my charge, time I will never get back, followed by some brief introspection. Could this have been avoided?
Sometimes it just can’t be avoided. Being a listing agent is capital intensive today. It is capital intensive, that is, if it is done right. This week we also saw homes go into escrow and new listings coming down the pike, but one failure has a tendency to eclipse, even briefly, all of the good. For all of our good intentions, studied counsel, and aggressive marketing, sometimes things just don’t work out.
A real estate agent’s business plan is a little like an actuarial table. Gains and losses, life and death, successes and failures. To look at the parts and not at the whole can make you crazy, particularly when markets behave badly.
Knowing the Unknown
We don’t take listings which we think will not or can not sell. This much should be obvious. Yet, we can’t control external factors and we can’t know the unknown. Sometimes the clients who assure us that they are committed to selling at whatever price the market will bear are not committed at all when that price becomes clear. Sometimes the clients who need to sell don’t need to sell at all; it is more of a want. Wall Street has had a nasty habit lately of failing to check in with me each time things are about to get really ugly, and for all of our good intentions, even when we predict trends, we may not predict the extent of the swings or the speed at which they occur. Mostly we are right, but sometimes we are wrong.
Since the beginning of time, agent fees have been challenged. Today, with the Internet explosion and on the heels the greatest short-term housing price appreciation in history, questioning my pay is so popular that it is on the verge of becoming an Olympic sport. We hear things every day which on the face may sound logical but, considered in the larger context, are quite illogical.
But What If…
“If I have to accept less than I (need, want, expected), will you take less?” Sounds fair, until you consider that I am providing a service, a service which, by the way, costs more to deliver the longer I am engaged and nets less the lower the price at which you sell.
“If you represent me (the seller) and the buyer, will you take less?” Sounds fair, until you consider that you have just proposed that I take a pay cut for doing what you have hired me to do — sell your home. Disincentives are rarely a solid strategy.
“If I allow you to write the offer on your listing, how much will you give me?” Sounds like a valid question, until you consider that my liability, both my legal risk and the risk that one party or the other or both will leave the experience feeling short-changed, increases exponentially when I am a dual agent.
“If my home sells quickly, will you charge less?” Sounds fair, yet until you are willing to pay more when it takes longer, this doesn’t pencil out. And paying me more when it takes me longer to accomplish the mission is just silly, isn’t it?
“Homes are selling for less now, so will you charge less?” Or, “Homes are selling for more now, so will you charge less?” Sounds fair, except that this is the same argument for two conditions on opposing sides of the spectrum, which is inherently illogical. And, while our fees reflect the hard costs of doing business (the ones involving dollar signs and my personal checking withdrawal slip), there are intangible costs whatever the market. In my case, there is more than a decade of experience and hundreds of closed escrows between me and my license issuance, there are several hours a day spent reading and studying and innovating, and there are ceaseless business management and continuing education time commitments, to name a few. Whether your home sells in one week or six months, I have still been on the computer since 5:00 AM this morning (as I am every morning, Sundays and holidays included) reading about my industry and your market.
Serious About Work
Any agent who is a career agent (and we are not talking about the part-time hobbyist here) is in business to make a living and dead serious about their work. Part of running a successful business is considering your costs of doing business and establishing a fee for services which both covers expenses and reflects the value of those services. All businesses have losses. Walmart does, Geico does, and so does the plumber who bids two or three jobs for every one he gets. You may pay the plumber by the hour, you may pay him less when your faucet is easier to replace than his last client’s, but imputed in his hourly rate are his losses. Believe it.
My particular stalled sale was unavoidable. I can’t control a life-cycle any more than I can control an unruly septic system. The client knows this, and when circumstances change, we will live to list again. Yet, moving past the depression stage toward acceptance, I realize that with every failed sale, I really mourn just one thing. It is not the money, and it is not the time. It is the failure to succeed, to delight and to ultimately feel great about what has been accomplished. Because, without raving fans, there really is no value proposition. And our clients are only truly delighted when they succeed.
Unfortunately, sometimes stuff just happens.