The “M” word. Let’s talk about money.
Yes, I know that money is critically important to you. We all need it to pay our bills. Sellers have the right to claim for themselves the equity that they’ve built into their real estate holdings. Buyers have the right too to get the best they can and save some money by getting a better deal. It’s called negotiating. It’s what we do at the table. It's what I've been doing for more than thirty years.
But I have to tell you something that’s going to sound a little strange, and some people are going to throw it away as a passing comment, but it’s true that money is sometimes not the most important big thing at the table.
There’s a tale I’ll tell that happened to me many years ago when I was selling real estate in Port Orchard, WA. Lois and I had bought our first home. It wasn’t a great neighborhood. The home was only 420 square feet. Just down the road from us was a wonderful older couple I’ll call Mary and Jack. Unfortunately, Jack passed away, and Mary came to me and told me that she needed to sell her home. She needed to move down to California to be closer to the kids. She needed all the money she could get from the home, but it was free and clear of any debts and she thought she could make it all happen with those funds.
I told Mary that we’d get as much as we could for her and make it all happen as quickly as we could so she could move down south.
We listed the home for $37,500. (Like I said, this was many years ago.) The home was only about 600 square feet and wasn’t built just absolutely square to the arithmetic standards of today.
I put an ad in the local paper, which is what real estate brokers did as our primary tool for finding buyers back then, and I got two calls on the first day. I showed the property at 11:00 in the morning to an investor, a lady who owned a number of very inexpensive properties in town. Mary happened to be there and the investor turned to her and said that she’d have to do some painting. Mary just nodded. “And it looks like there’s a roof leak over in the corner there.” Mary nodded.
The investor then asked Mary outright. “Will you take less?”
Mary did exactly what I’d told her to do. She looked this lady square in the face and said very politely, “You’re going to have to talk to my real estate broker about that.”
We left with the investor telling me that she’d think about it and get back to me Monday.
At 2pm that same day, a young couple came to my office. They were going to have a baby and wanted to go out into the world and buy their first home with about $2000 they’d inherited recently.
I drove them over there. Mary was gardening in the back yard. This young couple was just giddy. They were open with their plans.
“We can put the baby over in this corner.” (Again, this was a very small home.)
“Oh look, Honey, there’s a roof leak.”
“I can fix that, no problem. I’ve got a ladder.”
When they saw Mary in the back yard, we had a very short conversation. Basically what it amounted to was “You have a wonderful home. We really hope to buy it today.”
Back at the office, we talked about money with a lender and all they could do was $34,000, so I wrote the offer. They really wanted this home.
I called the investor and told her that we had a written offer on the home. She hated the competition, but really wanted it. I wrote the offer for her at full price, all cash, and close in two weeks.
There it was. That evening, I sat with Mary at her kitchen table with two written offers. I went through them in detail. She quietly stared at those two documents for some time, and finally asked, “Do I have to take the higher offer?”
“No, not at all. You can take the higher offer, you can take the lower offer, you can counter one of the offers. You can do anything you want because you’re the seller and this is the United States of America. Right now, you’re in control here.”
She smiled. “I loved those two kids. I thought that investor lady was rude. Jack built me this home when we got married many years ago. I raised my two boys here. They went to college. I don’t want her to have this house. I want those two young people to have it. They were so nice. Can I do that?”
I told her that absolutely she could. She didn’t have to look at the money as the driving force. She could take less for the home if money was secondary to things that were more important to her. Even though the money was less, she could choose to sell her home to that couple if she didn't want to sell to a person who was rude to her.
Mary signed that offer and we closed that transaction. That young couple bought their first home. It surprised me at the time, but the fact is that we play with the numbers all the time. I play with them when I value the home before I list it, and I play with the numbers at the listing table. We play with them when we get written offers, and again if we need after an inspection or low appraisal. We sometimes even play with the numbers at the closing table.
But we never play with the people. That is critically important. Know that money – the numbers – are not always the biggest thing at the table. That is a lesson to learn. It is a fact to know. People sell their real estate. People buy homes. Always.
If this is the year that maybe you’ll sell or buy a home or investment, call me. I’m always here for you.