THE DISTRESS TEST…

An Over the Hill Agent happened to catch me on the cell the other day as I was running between a home inspection and a sign-off …

Now, when I say ‘Over the Hill’, I  want to issue a disclaimer and reassure any sensitive souls out there that I’m not using the phrase in a pejorative sense. It’s not meant to be ageist or politically-incorrect. God knows, if I didn’t photoshop my own Dorian Gray picture at the bottom of this column each week, I’d probably look as old in print as I do in my real estate life (pact with the Devil and all!)

No, I mean ‘Over the Hill,’ as in an Agent that works in the asphalt jungle of real estate beyond the great barrier reef of mountains lying North of Scotts Valley. One of those parts of the Bay Area where they seem to believe that most of  us Agents in sleepy little Santa Cruz, are just rubes farming our fallow fields, stuck in an outlying gulag of value, light years away from real estate central – so busy falling off our turnip trucks, we can’t focus on the true art of the deal.

Anyway, the mostly one-sided conversation went something like this:  ” Hello Thomas.” (That’s always the first tip they ain’t from here.)  “This is Jane Dough from Real Real Estate  and I’m calling on the property you have listed in Soqwell.  (She has that edgy, Agent-on-steroids tone in her voice. Sounds like she’s just finished a two-day Duncan Hines success seminar and she’s ready to Shake and Bake!)

Of course I say Hello and then politely wait for her follow up.  “This listing has been on the market for a while hasn’t it? (Yes. It has.)  Why do you think it hasn’t sold? (Well, to date, no one has bought it.)  “Are the Sellers really motivated to sell?” (Yes, they want to sell their house.) “Why are they selling?” (They want to live somewhere else.)  “But there must be a reason why they want to sell?” (They would like to have a different roof over their heads.)  “Who priced this house?”  (I’d say it was a collaborative effort.) “Here, in our market, things sell quickly.” (Some properties sell quicker than others.)  “Here, if something is priced right it sells with multiple offers.”  (We see multiple offers on occasion.) “But not on this property?”  (No, not on this one, yet.) “Do you think there is any flexibility in the Sellers’ price Thomas?” (I think if someone is interested in the property they should write an offer.) “Do the Sellers understand that the market has changed?” (They are sophisticated people.) “Don’t you think they should reduce the price Thomas? (I think it is their home. Their decision to make.)  And so on…

Admittedly, I’m a bit dense, if not rube-like on occasion.  It finally dawned on me to turn the table and  ask my own simple question: ” Excuse me, but have your buyers even seen this property?” Her answer: “No, they are going to be closing escrow on their home in Los Altos soon. They want to move to your area but they don’t want to waste their time looking at overpriced properties.”

I was speechless. For a moment. An Agent, pre-negotiating the negotiation before even showing the property?  Wow. Buyers wanting the price reduced before they’ll even take the time to look? Double wow. Buyers who haven’t even finished selling their own house yet? Triple wow.

It’s a sign of the times for sure.  The kinds of calls and conversations all of us are experiencing more and more in a market where half of the properties are clear distress sales (bank owned or short sales) and the other half  are suspicious listings that buyers are scrutinizing and trying figure out through a series of coded questions, just how much unseen distress there might actually associated with them.

Just to save us all a lot of time and Verizon brain cell minutes in the future, I have a suggestion. Let’s create a new category of information for the MLS.  Let’s try to make all this distress stuff more transparent so we can cut to the chase easier.  Let’s publish a  STRESS TEST for each nominally, un-distressed property – with the Sellers permission, of course.  We can rate the underlying distress level of each new listing and put a number in a  big red box right next to the photo. Maybe a 1-10 scale with 1 being a  Seller with lots of  equity just hoping to escape to Utah with as much of his remaining nest egg intact as possible, 3 being a recent pink slip and an unknown period of joblessness ahead,  7 being a pending ugly and messy divorce and 10 being a situation where the four horsemen of the apocalypse have ridden in to take up residence in a three bedroom home.

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4 thoughts on “THE DISTRESS TEST…

  1. Brenda Mann

    Tom –
    You are my guru when it comes to calling a spade a spade in the real estate world. I look forward to your article every Sat. morning and love the humor, and the screeching truth of it all. Last Saturday’s article was sadly more truth than I wanted to see considering I’ve been a seller in this wacky market since Nov. 2009.
    My house – 224alta.com – is in the lower westside, perhaps you came through it? Its been on for 4 months now, 2 insulting low ball offers that we refused, (the offers wouldn’t cover the re-build costs if it burned down tomorrow), had countless open houses and 2 price reductions. We are not a short sale … nor will be one, we’re just 2 well meaning people selling a great house with a ADU 2blks from W.Cliff in a crappy/insane market.

    Way back when, we thought the lower westside was golden, flaming hot and our house/property would always be our ” cash cow” through any market. Not so.
    I really “got” your last article, with that over the hill agent trying to pre-negotiate a property she or her clients had never seen! ( what the?)

    What I’m seeing most clearly now … no matter what your listing price is …. its not low enough, we’ve seen it and live it in the past 4 months. We’ve reduced for our last time … and our house is now a steal ( I hear you mumbling – spoken like a true seller/owner)
    My conclusion – buyers now fall into to 2 catagories – #1 – buyers are buzzards( I used to call them vultures – “buzzards” seems more fitting)
    #2 – the buyers are STUPID! Do they not realize what they can buy in the million + dollar neighborhood now?? ( yes mine included) …. but the price isn’t low enough or good enough …. Grrrr!
    OK … I feel better now. I plan on becoming a real estate agent sometime this year, I’ve wanted to do this for a few years now. Have my Allied book/course and I’m now just waiting to sell, move and start studying. My brother in law is indeed Dave Mann.
    Looking forward to your articles always …. thanks for writing them!
    Brenda Mann

    Reply
  2. alice tarail

    Happy Saturday morning, Tom

    I am hoping to be one of the 1st 7 email to obtain your refrigerator magnifying glass, as I am told and can’t tell the forest from the trees any more. Especially not that it is spring and the crazy blossoms are spouting everywhere. The flowers still look like flowers, but they are so dazzling that one can’t see thru them to the “solid” tree behind.

    I am a buyers agent, for the most part, and let me say that agents with listings with multiple offers are only seeing the blossoms. (translate that $$$$$$$), and not the forest of all the other factors.

    My Saturday a.m. wouldn’t be the same without you, so thank you for your humor and style.

    Alice

    Reply
  3. Ronnie Trubek

    Hi Tom.

    I too laughed until I snorted and clipped your column to talk about at our weekly sales meeting. Time constraints didn’t allow for the discussion and I forgot about it until Friday when, I am very sure, the over-the-hill agent you based your column on, telephoned me. It was only several inquires into the conversation with her demanding to know how my, temporarily off the market, listing compared to your listing, why my Seller was selling, where they were moving, who was the “stronger” in the relationship and digressing into numerous inappropriate inquiries about my clients personal life and decision making processes that I realized that it must be the person you were writing about.

    You’ll be pleased to know her clients have now closed escrow on their home and are very interested in our listing, subject to the Buyer being able to obtain the property at a “good price”. I reassured her that my listing was not comparable to yours and that I was certain that it wasn’t necessary for her clients to see it.

    She also wanted to know if she couldn’t show it, could she pursue the relist of “my” property. I was so flabbergasted at that I couldn’t even think on how to respond but I did know that my clients wouldn’t engage with her for 2 minutes if she approached them with that type of aggressive, invasive and demeaning style of questioning.

    I wish you luck with her, should I hope on your behalf that she doesn’t bring an offer ?

    Ronnie T.

    Reply
  4. Ronnie Trubek

    Correction, “our” should be “your” in the second paragraph. Probably makes more sense that way.

    Reply

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