Tony Robbins once said that you need to treat your clients like you would treat your friends, and I couldn’t agree more.
At a listing appointment this week, I toured a small home in Golden Valley with an awesome yard and tons of potential. The owner is actually a close personal friend (he was in our wedding and our kiddos call him uncle) and he is about to combine households with his partner. This is so exciting!!
For years he’s been ‘stuck’ in this home, having bought it right before the notorious market crash and he never seemed to have enough equity to move without bringing a ton of money to the table. Every couple of years he’d ask me to run a comparative market analysis on his home, just in case there was a chance he’d be able to make it happen. His equity moved from red to black sometime between 2019 and 2020, and now it’s ready to sell.
Or is it?
Right now he’s faced with several options that make complete sense. As his agent (and as his friend), I am obligated to present them objectively so that he can make the most informed decision.
CONSIDERING OPTIONS
One option is to roll up his sleeves and get to work. This particular home has quite a bit of deferred maintenance that will need addressing prior to going to market if the owner’s goal is to seek maximum profit. It could use a new roof, deck repairs, demolishing of a terrifyingly unstable shed in the backyard, and quite a few interior updates. These items add up and could swiftly eat up that equity.
Another option would be to cut some losses, stick a sign in the yard today, and hope to find an eager investor to take the home off of his hands and possibly flip it. In my opinion for this particular home, his net proceeds from this scenario will quite likely be about 70% of what he’d walk away with if he completed all of the recommended updates.
Let’s talk about his third option, which in my opinion isn’t always considered at a listing appointment. Wise and wealthy people always say that the key to financial freedom and success is to invest and hold real estate. This homeowner is not marrying his partner, therefore he won’t have a patch of grass to legally call his own once this home sells. If this person can walk away with 80-100K in his pocket today, who is to say he can’t double that amount in another ten years? You can’t. I can’t. Nobody has a crystal ball. What we DO know is that no matter what happens in the real estate market, historically speaking, it always corrects itself. Holding this property gives this person a healthy financial cushion.
THE FIDUCIARY’S BEST INTEREST
Listen. I can’t in good conscious roll into this listing opportunity with a vision of high fives and hugs at the closing table without also helping this person understand the benefits of not selling at all. While it’s not in my own personal best interest for him to hold onto this property, it is in my best interest to do right by my people, and here’s why: After laying out his options and discussing each one in depth with my friend, he said: “This is why I called you and not somebody else.” He knew I’d be honest with him and that I’m more interested in what’s best for him than what’s best for me.
He knows my business is built on sales, and my time at his home this weekend will have an incredible financial impact on him, even if we don’t go to market. I might not earn a commission on this sale, but I did just earn a referral source for life. How? Because I saw a golden opportunity and I asked for it. Our story with his testimony will take my career exponentially farther than one visit to a closing table.
Plant the seeds. Earn the trust. Doing the right thing will pay off in spades.
Onward,
Coach Lins
