Delusion Comes in Many Forms: Facing Facts Can Be Difficult
I spoke with the Broker of a fairly large real estate brokerage the other day. She is one of those consumate optimists (don’t you just hate those people?), but even she has been shaken by the current real estate market. “The phones aren’t ringing,” she said. “It’s awfully quite out there. I’m worried.”
The truth is, she should be worried. The deteriorating economy and upcoming election have had a chilling effect on home sales both here and nationwide. It has been rough for sellers and their agents. Buyers are also facing difficult lending challenges. What amazes me is that a lot of people out there have not come to terms with reality. Here are two perfect examples:
NUMBER 1: THE REALTOR WITHOUT A CLUE
I’m a contributor to a Real Estate Blog called Active Rain. Over 100,000 agents write blog posts on this site. Yesterday, I read a particularly interesting blog by an agent who was asking if she should take a listing knowing full-well that the seller was unrealistic about the price (way too high) and the seller didn’t even want a sign on the property. She rationalized that they might get lucky and sell the home (even though the home has been previously listed ), or that her virtual tour would attract the right buyer or this listing might generate residual business for her because “she’ll do a great job!” The fun part was reading almost 70 comments telling her that it’s ridiculous to take an overpriced listing (no matter what the market conditions are). From her response to the comments, I have a strong sense that she’s going to take the listing knowing full-well that she is not doing her clients any favors. This is why our industry has earned such a bad reputation and why this downturn may very well be a good thing. It’s going to eliminate the non-professionals……but:
2) HOMEOWNERS ARE DELUDING THEMSELVES AS WELL
Zillow, one of the most popular Internet home value sites published some interesting findings regarding home owner expectations in the current market. Zillow indicated in their Homeowner Confidence Survey that there exists a perception-reality gap. Quote: “Despite the turbulent quarter, half of U.S homeowners do not think their home’s value has decreased. In reality, nearly three-quarters of homes lost value in the past 12 months.”
The bottom line is that we all need to step back and take a cold, hard look at reality. I recognize that every home transaction is unique but we all need to be guided by the core values of honesty, fair-play and professionalism in order to protect our clients.
