Real Estate Is Like Skydiving – TBG Update 2/12
One of the most fascinating parts of working in real estate is observing buyer and seller behavior. So much of what I learn and internalize for my own way of interacting with the world is from observed behavior about humans and human interaction on my job.
We recently went into escrow on a house we listed on September 11, 2020. The buyer in escrow now was in escrow the last time we listed the house years ago. Back then he asked for a large credit and the seller canceled and sold the house to the backup buyer instead. He came back this time with all his inspection reports from last time and he wrote a non contingent offer considering everything he already knows from inspecting the house himself during his last escrow and from studying what was done to the house by the current owners since his last inspections.
There’s a family who came to see the house for the first time mid September 2020 and they absolutely loved it. My text messages with the wife start on September 28. The texts tell a rich story of the last 4.5 months. They came back to see the house every 2-3 weeks since the first showing. I went to see the property they’d want to sell to buy this house. I connected them to a lender who put in time and figured out the financing. I updated them on the history the whole time. We spoke about price and terms over and over again. And then after 5 months of thinking about buying the house but not actually moving forward and making it happen, I let them know that the house went into escrow with another buyer. And I got a message back that I should have made sure it was sold to them.
It’s actually common for buyers to like a house and then to step away to “think” about it, with a message to call them once someone else decides to write an offer. I try to tell people that once there’s an offer from another buyer and that buyer is strongly interested and they put an offer in writing with proof of funds and a letter to the seller, it often doesn’t make sense for a seller to go back and to chase a scared buyer who never put an offer on paper. Even if the scared buyer jumps in and engages at the eleventh hour, in most cases, a seller will choose the first offer on paper over a subsequent offer that ends up playing catch up. The bold and confident buyer feels like a better bet to most sellers. Scared buyers often don’t have an agent and they figure that the listing agent will be incentivized to favor the unrepresented buyer so that they’ll have the chance to step in no matter what. I always put the seller’s interest over my own and it’s not in the seller’s interest to choose a buyer who needs the validation of knowing that the house is “worth it” because another buyer offered to buy it too. The stronger and less afraid buyer wins almost every time and it’s not realistic for a scared buyer to expect a listing agent to make it different.
In the case of the buyer who engaged for 5 months but was just too scared to buy the house, I called them after the fact to empathize and to sit with them and their sadness. They did truly love the house and I wished for it to become theirs. I tried my absolute hardest to walk them off the ledge. I showed the house to them at least 6 times over so many months. I connected them to a caring competent lender who worked hard to figure out the financing. I prepared a written offer for them multiple times at all different prices over the months. The missing piece was their pulling the trigger and actually buying it. They weren’t able to. I understand, the fear is real, and I feel for them and their sadness.
We recently sold two comparable properties. One property was priced low to attract multiple offers. The other was priced high to attract that one possible buyer who might overpay. The property that was priced low sold much faster and for a much higher price than the property that was priced high, got a price reduction, and went into escrow only when it hit the right price. The pricing decision is often about fear and emotion too. It’s interesting to observe that both in buying and in selling it’s the fearless who so often prevail.
I often go back and think about my experience skydiving. Tandem skydiving is extremely safe, there’s been very few incidents of accidents, and it’s heavily FAA regulated. It really is just about the fear of going 13,000 feet up in the air and then free falling through the sky and landing on an airfield with a parachute. The fear is real. From signing the waivers to putting on the helmet and goggles to ascending in that little plane higher and higher and seeing everything on the ground get tinier and tinier, it’s all scary. And then jumping out of that plane with the cold strong wind rushing in your face and freefalling super fast is scary too. But when you land, you see that it’s just about the fear because it really is safe. And it’s so exhilarating to have conquered the fear.
There is absolutely some inherent risk in buying and selling a house and with that risk comes fear. The fear for most people is around price, timing, the smarts of their decisions financially + emotionally + practically. On every level buying and selling a house is a huge decision with so many implications and ramifications. The fear is absolutely real.
Buying and selling is not so different from tandem skydiving. It’s scary for most to sign the papers and to choose to engage. But it’s tandem and we’re super experienced and professional so it’s super safe. Once people land at the end of their experience, it’s the most exhilarating feeling in the world and only those who face the fear get to feel the elation that comes all the way at the end of it. For most people that elation is the stuff dreams are made of. I think it might be that the fear at the beginning partially drives the happiness at the end. It all ends up being awesome – the fear, the push to conquer it, the windy flight, the shockingly fast fall, the scenic view, and the safe landing! My heartfelt wish for all of us is to keep mustering the courage and the strength to do what it takes to live a life completely full of awesomeness!
Have an amazing weekend!