Tag: home seller behavior

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Subtext in buying or selling a home

subtext
Profile of home buyers and sellers from nar.realtor

It’s all in the subtext. “Buyers are liars” is a saying that many real estate agents seem to verbalize when things don’t work out with a home buyer.  It’s an insulting false aphorism that is proclaimed as an attempt to shift all responsibility by saying that the buyer was deceptive and did not cooperate.  And when things fall apart with home sellers, the same agents won’t take responsibility and start hurling insults such as wacko, ignorant, or greedy.  Of course, if the relationship becomes contentious, then you can imagine that the name calling becomes increasingly harsh.

And it goes both ways, of course.  Real estate agents, as a profession, have a bad rap; and conditioned consumers bring those expectations into their relationships with their agents.  Many buyers and sellers have a low opinion of real estate agents while often having high expectations for the outcome of their experience.

You may begin to see that, unless the settlement is flawless, these mindset combinations don’t bode well for the agent-consumer relationship.  The home sale transaction is full of pitfalls.  And if there is an underlying distrust between you and your agent, then the outcome can become an ordeal for you both.

Writing for RealtorMag, Jason Forrest laid out why such buyer (and seller) repudiation by agents is wrong (Agents: Stop Saying Buyers Are Liars: realtormag.realtor.org; September 2015).  He pointed out that agents often blame the buyer (or seller) when the relationship and transaction is unsuccessful.  But in reality, Forrest stated, the agent is the one who fails by not taking the time to understand and coach their client.

Research of real estate outcomes suggest that your experience during a real estate transaction may depend on both the agent’s and your ability to communicate.  Clear communication between you and your agent should leave no doubt about your intentions, as well as your agent’s ability to convey and interpret motivations from your transaction counterpart.

The evolution of the real estate industry has not really improved the quality of communication between agent and consumer.  Agents focusing on high volume sales along with the public’s reliance of the internet for home information reduce face-to-face interactions; which may allow for the creation of false expectations while decreasing overall consumer satisfaction.

In his book Re-examining The Art of Sales: Broadway Style (AuthorHouse, 2006), real estate broker Nilton De Macedo asserted that the key to communication and understanding lies in the subtext of the dialogue.  Having stated that subtext is “what you really mean under what you say,” he provided an example: saying “I’m going to bed” may sometimes imply “I don’t want to talk to you now.”

De Macedo explains that as a sales professional, it is essential to discover the subtext of the conversation.  The real estate agent should not only attempt to decipher the client’s subtext to reveal their “unspoken intentions” – but they should also work to discover the subtext of their own communication.  He proclaims that this approach deeply influences how we relate to each other and will greatly improve communication.

Although De Macedo places the responsibility of communication square on the shoulders of the real estate agent, it really goes both ways.  Your agent may also be communicating something else through subtext, implied by what or how it is said.  You can improve your outcome by becoming aware of the subtext in the communication between you and your agent.

Dan Krell
Copyright © 2016

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

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Buyers and sellers – Mentally prepare to be in real estate market

from stress.org

Realtors® are guilty of romanticizing, if not glorifying, the idea of buying and selling a home.  And it’s probably true for many, that initial thoughts of buying or selling a home (and everything that goes along with it) are sanguine.  And yet, shortly after they are faced with details of the move, many are hit with the reality that the process is full of potential pitfalls and setbacks.  Buying and selling a home can be a confusing endeavor, that can become overwhelming if you’re not mentally prepared.

Getting through the process of buying and selling requires organization and planning to seek the best outcome.  As a home buyer you organize before viewing homes by having a mortgage approval in hand, as well as determining a price range and area in which you are looking.  As a home seller you have a plan in place before the home is on the market; which includes a pricing and marketing plan, as well as having your home in its best possible condition so as to give the best impression.

Even though the process of buying or selling a home is straightforward (after all it’s not rocket science), being prepared for various stages can help you through potential issues.  If you’re a first time buyer or seller, having a checklist helps you be aware of where you are in the process.  Even if you’ve bought or sold a home before, you should be aware of changes to the process that have been made in the last eight years.

You should also be aware that every transaction is different; each transaction has a different set of personalities, conditions, and issues.  You no doubt have heard your relatives’, friends’ or coworkers’ account of their buying or selling experience.  But chances are that they may not remember the snags they endured.  Reactions among buyers and sellers, as well as their real estate agents, vary depending on their personalities and life circumstances.  So, your experience may be similar to others’; however, be prepared that it could also be very different.

Additionally, many never realize how many individuals are involved in getting their transaction to settlement.  Besides the buyer, seller and real estate agents, there is a lender, a title company, and a home inspector, (among others); each increasing the number by a factor of their employees, and increasing the opportunity for Murphy’s Law to interrupt your smooth settlement.

Although the process of buying or selling a home appears to be task oriented, there is also an emotional component.  Did you know that having a major change in living conditions and taking on a mortgage are rated in the Holmes and Rahe Stress Inventory?  This acknowledges that buying and selling a home is an emotional investment that could impact your emotional wellbeing (positively and negatively).  Chances are that at some point you may feel the added pressure of your sale/purchase.

Mental preparation for your home purchase or sale may include moderating expectations and anticipating how you may cope with various circumstances that may arise.  Mental preparation can help maintain a feeling of control over your transaction.  It can be helpful to work with an agent who can address your worries and fears about the transaction through listening and empathy.  Most of all, hire an experienced real estate agent, who not only has the ability to problem solve and work through problems, but will help you organize and prepare.

by Dan Krell
Copyright © 2016

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

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Herding behavior and real estate decisions

herding real estateHave you ever wondered why real estate trends develop? When we’re buying and selling a home, we like to think we act rationally and with intention. However, our decision making is influenced externally. We are affected by the attitudes of the experts, family and friends, from whom we solicit advice. We are also consciously and unconsciously influenced by information we get from TV, the internet, social media, news papers, and even from eavesdropping conversations. Your decision making may be based on others’ behaviors that signaled it was the correct thing to do, and in turn magnifies and strengthens the signal to others – which is described as herding behavior.

Herding behavior plays a large role in our daily lives, as well as in our real estate choices and conclusions. Decisions about home buying and selling, which agent to hire, sales prices, and even whether or not we should default on our mortgage can be influenced by herding behaviors.

A 2013 study of herding behavior in strategic default revealed significant findings about our vulnerability to information (Luchtenberg & Seiler (2013).The effect of exogenous information signal strength on herding. Review of Behavioral Finance, 5(2),153-174). To refresh your memory, strategic default (allowing a home to go to foreclosure when financially able to pay the mortgage) became a significant trend that was widely covered in the media during 2010-2012. Luchtenberg & Seiler’s research into decision making and herding behavior suggested that those who are susceptible to information can be easily swayed. Their findings among professionals revealed that low consensus information (“weak information signals”) caused herding when asked to make a personal choice; while high consensus information (“strong information signals”) caused herding when providing advice to a friend.

The notion that the housing and financial crises were caused by herding behavior is not new. However, economist Christian Hott researched if housing bubbles are caused by herding behavior (Hott, C. (2012). The influence of herding behaviour on house prices. Journal of European Real Estate Research, 5(3),177-198). Citing others, Hott explains that herding behaviors are formed by those who are “imperfectly informed” and “learn from the decisions” of others; and that people tend to “overestimate the likelihood of an event” to occur to them when they hear it happened to someone else (expecting the same experience that someone else had). Although Hott concluded that herding was not the only contributor to the housing market collapse, and suggested that mortgage banking was also likely responsible; the findings indicated that herding behavior does play a role in home price fluctuations and housing bubbles.

Cognitive dissonance may also be at work to reinforce your herding behaviors. You may act on information that is not widely acknowledged just because the source is significant to you (such as a relative, close friend or co-worker). And the stronger your belief in the information, the more likely you will in turn confidently give the same advice to others, even though it may be inaccurate and/or irrational.

Breaking away from the herd is difficult; buying and selling a home may not seem to be a rational process – even when confronted with facts. People don’t always base decision of logical choices, but rather base decisions on psycho-emotional needs and/or fears (such as status, acceptance, and avoidance of failure). However, seeking balanced information and becoming aware of your motivations may improve your decision making.

Original published at https://dankrell.com/blog/2015/09/30/herding-behavior-can-interfere-with-real-estate-decisions/

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

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Are you feeling lucky? Belief in luck may boost home sale

houseLuck is not an attribute that real estate agents will talk about during their listing interview. It’s true. Agents are apt to discuss many things, such as their success, their view of the market, and hopefully what they will do for your listing; but they won’t acknowledge that luck, or serendipity, may have had something to do with the success of some of their transactions. Recent research indicates that luck is actually an important characteristic in sales; and some are “luckier” than others.

Joël Le Bon, Professor of Marketing at the University of Houston’s Bauer College of Business, has been studying the relationship between sales and luck for some time. He recently discussed his research for the Harvard Business Review (Why the Best Salespeople Get So Lucky; hbr.org; April 13, 2015) saying, “…downplaying the power of luck, you stand to fall behind competitors who have learned how to manage it.”

That’s right – managing (or provoking) luck. Even though many “de-emphasize luck” and focus on tangible and measurable actions, Le Bon’s studies show that the combination of the belief in luck and specific sales behaviors have a mutual positive relationship. More precisely: believing in luck has a positive effect on sales behaviors; and exhibiting a specific set of behaviors increases the person’s luck in sales.

Le Bon gives an example how managed or “provoked” luck effects sales. A study of students selling golf tournament sponsorships revealed that those who believed in luck increased their sales 41% over those who relied on “standard sales practices.” And that “76% to 88% of the luck circumstances were incidences of provoked luck.”

Among the luck boosting behaviors that Le Bon listed, includes: competitive intelligence, mindfulness, and change circumstances are relevant to home sales. Those who are luckier tend to be: knowledgeable about the market, competitors, customers and prospects; mindful about their customers’ objectives and open to unexpected opportunities; and thinking outside the box by going outside their comfort zone and seeking new opportunities outside their sphere of influence.

Many successful listing agents also have these traits. Although not attributed to luck, their success could be viewed as “provoked” serendipity. However, they are often able to convert Le Bon’s list of actionable behaviors into successful sales and satisfied clients. Pricing homes accurately requires knowledge of local neighborhood sales trends, not to mention the overall market. Successfully negotiating transactions requires an understanding of buyers and their agents, as well as communication skills. Servicing a listing and being attentive to their clients requires being aware and addressing their needs. And of course, going outside their sphere of influence allows contacting and connecting with more prospective home buyers to sell their listing.

Even though luck, as such, is not recognized as an asset for your listing agent to possess; belief in luck seems to be part of a repertoire of beliefs typically described as a positive attitude – which has been demonstrated time and again as having positive effects on sales outcomes.

However, it’s not just your agent’s beliefs and actions that can affect your home sale. Your attitudes and beliefs can also facilitate or interfere with the sale. If you have a strong emotional attachment to your home, or have unrealistic expectations; your home may not sell, or you may be unsatisfied if it does –regardless of your agent’s skills. But then again, maybe all you need is a little luck.

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

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Real estate changed by internet

real estate changed

The National Association of Realtors® annual Profile of Home Buyers and Sellers is characterized as being a survey of home buyers and sellers that reveals “demographics, housing characteristics and the experience of consumers in the housing market, including the role that real estate professionals play in home sales transactions (nar.realtor). The release of the Highlights of the 2014 Profile of Home buyers and Sellers on November 3rd by NAR provides insight into home buyer and seller behavior. I compare a small sample of data from three Profiles that demonstrates how real estate changed. Some things have changed, and some things have stayed the same.

The recent lack of first time home buyer participation is one of the issues that experts point to as holding back a full housing recovery, and has been highlighted by the 2014 Profile of Home buyers and Sellers. Only thirty-three percent of home buyers surveyed in 2014 were first time buyers, which the NAR points out as being below the “historical norm of forty percent among primary residence buyers.” Compared to 2003, NAR reported that forty percent of home buyers were first time home buyers. However, fifty percent of home buyers reported being first time buyers during 2010, which is most likely due to the first time home buyer tax credit that was offered at the time to stimulate home sales.

The 2014 survey revealed that home buyers searched on average for 10 weeks and viewed 10 homes; which is reduced from the 12 week average search indicated the year prior. The 2010 report also indicated a 12 week average search, looking at an average of 12 homes. But these home search stats are a far cry from the 8 week average search time viewing 10 homes reported in 2003.

As you might have expected, home buyer use of the internet has grown. In the 2014 survey, ninety-two percent of buyers reported using the internet in some way in the process. The first step for forty-three percent of home buyers was to look at properties online; while only twelve percent of home buyers initially used the internet for information about the home buying process. The use of mobile applications has significantly increased as technology allowed; fifty percent of buyers reported using mobile websites or applications. Compare this to 2010, when about ninety percent of home buyers reported using the internet; and in 2003 when only forty-two percent of home buyers reported searching for homes online.

Rather than eliminating real estate agents, the internet has changed the relationship between agents, buyers and sellers. Ninety-eight percent of buyers in 2014, who used an agent, viewed them as being a useful source of information. Eighty eight percent of surveyed buyers indicated they used an agent to purchase their home, compared to eighty-one percent in 2010, and eighty-six in 2003.

Ninety-one percent of surveyed sellers in 2014 reported their homes were listed on the MLS, but eighty-eight percent had assistance from real estate agents. Only nine percent of surveyed sellers sold “by-owner.” The 2010 seller stats are consistent with the 2014 Profile; while the 2003 survey indicated eighty-three percent of home sellers used an agent’s assistance to sell their home.

There are differences between buyers and sellers also.  Among the differences in how they choose their agent: the 2014 survey indicated that forty-four percent of home buyers, compared to thirty-eight percent of home sellers, found their agent by a referral through a friend or family.

Original located at https://dankrell.com/blog/2014/11/06/how-home-buyer-and-sellers-have-changed-and-remained-the-same/

By Dan Krell
© 2014

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

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