Your Money or Your Life

Written by Neil Jenman Thursday, 19 January 2012

Sellers – don’t pay a high personal price. 

The other day, a friend took me to see a house for sale. The asking price was $2.2 million. It was a spectacular home but it had been for sale for more than a year.

So why had no one bought this home?

The answer can be found in five words, which we told the agent, “The price is too high.”

Sheepishly, the agent agreed.

“It’s probably worth about $1.7 million,” said my friend.

Again, the agent agreed. But it got worse (at least for the owners). When the home was first placed for sale, they had been offered $2 million. They refused. In doing so, they fell into the common home selling trap of dismissing an early offer. Often, the early offers are the best offers – as many sellers painfully discover months after the buyers who made the offer have gone.

Where is that two million dollar buyer today? Living happily in another home where the owners accepted their offer. And those owners are also happy because they moved on with their lives. They won financially and personally.

There is a problem facing many sellers today. They don’t realise, often until they’re in a lot of personal pain, that there are two prices when selling a home – a financial price and a personal price.

Think about it – why do people sell real estate? It’s not, as most people believe, primarily for the money. No, people sell because of what they can do with the money. They all have a personal motive.

They money is secondary to the personal needs, goals or dreams of sellers.

Far too many sellers focus far too much on just the money. Indeed, they become so fixated on the money that they barely remember the personal reason they are selling. In doing so, they lose financially and personally.

Back in the days when I was selling real estate, a delightful elderly couple asked me to sell their home. They were Yugoslav immigrants and although their English was poor, they made one point very clear. They had a high financial goal for their selling price.

But what about their personal goal? Why were they selling? They wanted to move close to their grown-up children. When they showed me photographs of their grandchildren their eyes brimmed with tears.

Unfortunately, the property market was falling. I could not find a buyer willing to pay the price they wanted. There were several offers, but each was firmly refused. Out of respect, I didn’t push them. I just kept trying; but I was trying to do the impossible.

Weeks turned into months and still their home was not sold.

And then the elderly man died.

A few weeks later, his wife came into my office. She wanted to rent out her home while she went to Yugoslavia to visit friends and family. She planned to be gone for a year. She gave me the keys and said goodbye. I never saw her again. As so often happens with close elderly couples, she was to die in a few weeks.

Her son came to see me. It was time to sell the home once and for all. We discussed the price and he said “My father was stubborn. You sell it for the best price you can get. We trust your judgment.”

Within a few weeks the home was sold – not for the price the elderly man had wanted but for the best available price in the current market.

The family thanked me. The last time I saw them was the first time that I saw their children. And then it occurred to me – the elderly couple hadn’t lost financially with the sale, they had lost personally by not spending more time with their grandchildren. They placed a few thousand dollars ahead of their personal goals. They put their money ahead of their lives.

From that day onwards, I would not hesitate to tell sellers to put their personal goals ahead of their financial goals. If their price goals were too high, I’d tell them.

I’d do my utmost to persuade them to be sensible about the price – especially in a falling market where the price being offered today (even though it was lower than their asking price) would be even lower tomorrow. And, as the weeks went on, the price would keep getting lower. It was my duty to tell them to take the best offer, quickly, and sell.

About a year later, I was involved with an almost identical elderly couple. Although they had what I knew was an excellent offer, they stubbornly held out for about ten thousand dollars.

I looked at them and thought, “Will they have ten thousand dollars in assets when they die?” And then I couldn’t help myself, I told them what I was thinking. They smiled and told me that yes, of course, their assets would exceed ten thousand dollars when they died.

I leaned forward and said, “So, why don’t you use that money now and take it off the high price you are asking and get on with your life?”

Their faces lit up. It was so obvious. They laughed and agreed. In doing so, they put their lives ahead of their money.

If you’ve got your property for sale and no-one’s buying it, then it almost certainly means that your asking price is too high. Sure, it’s easy to blame the agent and, yes, most agents aren’t that good at negotiating.

But one thing’s for sure about all agents, they all want to make sales. Yes, there are a lot of “crunching” type agents (especially with auctions) but there are also lots of meek agents. And many of these agents don’t know how to tell sellers to accept the best offer and get on with their life.

In my experience, all sellers – once they make the decision to accept the best offer – never regret selling and getting on with their lives.

It’s often a simple choice – your money or your life.

Put your personal price ahead of your financial price and you’ll probably make a great discovery.

You’ll win both personally and financially.

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