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Mourning a Loss & the Agent Value Proposition

Letting Go

Creative Commons License photo credit: Letting Go of Control


We Withdrew

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.

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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?

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“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.

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Written By

Kris Berg is Broker/Owner of San Diego Castles Realty. She is the perpetrator of the San Diego Home Blog, a locally-focused real estate blog, and in her spare time enjoys fencing, luge, and kittens.

13 Comments

13 Comments

  1. Ginger Wilcox

    September 23, 2008 at 11:11 pm

    Sometimes we can predict when things won’t sell. As good agents, we try to avoid taking on something we can’t complete. I agree wholeheartedly, it is usually not so much the loss of income as the dissatisfaction of not being able to complete the job as we had planned and hoped for.

    With each set back, we always have something to learn.

  2. Gordon Baker

    September 23, 2008 at 11:34 pm

    Kris,
    With each situation you describe, it sounds so familiar. You could have added the other side where you work with a buyer for weeks or months and they say that they’re going to wait and lo and behold… the tax records show they purchased a home not on the MLS (FSBO). But for every bad client, there are more enjoyable ones.. Thank heavens.

  3. steve jenings

    September 24, 2008 at 1:41 am

    Just stumbled across your site very interesting will definitely visit again.

  4. sheilabragg

    September 24, 2008 at 3:55 am

    Mourning a Loss & the Agent Value Proposition: Get out of the feed reader and comment on this article.. https://tinyurl.com/3qdwjc

  5. Rich Jacobson

    September 24, 2008 at 2:09 am

    Kris: I paused in a moment of silence for you just now. No agent is immune from such losses. As much as we may try to the very best of our abilities, there are still aspects outside our realm of control. And it is so true – we may have dozens of success transactions & happy clients, but it’s that one dead-ended deal that consumes our thinking, and spoils our joy (I could tell ya a few septic system horror stories of my own!) Take a moment and write down a list of the last 10 clients you helped achieve success. Remember their joy and gratitude, and press on!

  6. Bill Lublin

    September 24, 2008 at 3:03 am

    I really couldn’t frame what I wanted to say in a more articulate and literary manner –
    I feel your angst – but the temporary postponement of this business event is not a failure to succeed on your part – it is just a postponement. Your sucess or failure is in the totality of your efforts, not just one event – and in your case, that is a pretty impressive total

  7. Ken Brand

    September 24, 2008 at 5:05 am

    Amen.

    Can’t control the outcome, only your own polished actions and communication.

    The keys to success, as you’ve shared, develop your professional policies/boundaries and master how to communicate them firmly, with respect, conversational grace and steely logic.

    Thanks!

  8. Thomas Johnson

    September 24, 2008 at 9:09 am

    Kris: Well said. Unfortunate outcomes put us that much closer to successful ones.

  9. James Bridges

    September 24, 2008 at 9:51 am

    Kris,
    Neat insights and honestly I hope that buyers and sellers read the “But What if..” section. I don’t think people realize that we are here to make a living and although that commission of $7,000, $10,000 or more seems large, they don’t see the expense side of the business so to many of them it’s just like vacation money.

  10. Justin Dibbs

    September 24, 2008 at 10:22 am

    Great post! In fact, I actually say many of the quotes/lines you typed to potential listing clients in the interview. Glad to see that we think alike! Hang in there and good luck with the next one 😉

  11. Missy Caulk

    September 24, 2008 at 6:04 pm

    Yea, I mourn too, I had two fall apart this month, One person walked into her job and found it gone. Another man couldn’t get his money out of China with the financial crisis. Fortunately I got another offer on that one the next day. But I hate it too, on an emotional level.

  12. Toby & Sadie

    September 24, 2008 at 8:17 pm

    I think good agents always are perfectionists and as perfectionists we are always looking to the next deal and keeping eye the “wins vs. losses”. We all want to reach that magical goal of perfection.

  13. Paula Henry

    September 24, 2008 at 8:42 pm

    Kris – It is an emotional turmoil we all feel when we lose one, not for ourselves, not for money, but for our client and our business. It is time invested we will never see again. Love the “what if” section.

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