5 stupid mistakes of the novel home-buyer

Caveat lector: I am not a real estate agent or broker, nor am I an expert in the field of home sales, and I do not have a string of qualifiers trailing my name. That being said, I will add that I do not believe that common sense requires scholarship (though I will admit that it really is not as common as it used to be) for observation and anyalysis of the basic foibles of human transactions.

My qualification here is my autodidactic RE knowledge, which spans two states in the USA, and in addition, a wealth of study in human engagement in and amongst various cultures across continents. Whether the field is real estate, or any other business practise, I have observed that the assumptions and convictions that we often use to approach interpersonal interactions and business transactions are, with few exceptions, fundamentally identical.

This article, was inspired by the specific encounters in Indianapolis, Indiana, where I have experienced an usual level of idiocity in various aspects of both real estate and home remodelling. To entertain speculation as to the reason for this anomaly is to open up an entirely new post, so we won’t indulge. I will proffer though that the boom in RE transactions following the market crash a few years ago, which subsequently created the illusion of an investors paradise, has spawned a plethora of ”agents,” and  contractors, who are really displaced workers grappling at the threads of a promising future, but lacking the elemental knowledge of the industry.

This parvenu status fosters a playing field that is riddled with comedies and tragedies alike, and rivalled by no other community I have as yet experienced, and as is the subject here, I will focus on the tragedies. I will begin this list from  the gravest to the minutest of errors I have witnessed being made by the average and aspiring home-buyer.

1. They assume that the seller needs their money, and is desperate to sell the home. This arrogant assumption comes through loud and clear in their Purchase & Sales (P&S) agreement, and in their manner of communication in all other prior and subsequent interactions, and this approach can kill a deal in two seconds flat.

Admittedly, there are many sellers who are desperate (for various reasons) to off-load their assest for a quick payout even if it is at a loss, thus they will sell their souls and self-respect to the first person who makes an offer. So buyers are programmed to believe – and this is also because they are being ill-advised by their RE agent, who I have noticed (especially in the Indianapolis area), are desperate to make the sale – that this tactic can be applied to every seller.

Sadly, this hasty generalisation does not describe all sellers, and can be the root of many a misguided sale. Any smart (or semi-smart) negotiator should know that rule number one is to never underestimate the other party; however, in Indianapolis, it appears that that rule is exercised more in the breach than in the observance.

2. They go in for the jugular from jump. Buying and selling RE, like any other transaction, is a process. And what that means is that as is typical with all rational endeavours (emphasis on ‘rational’), there are stages along the way, especially if you are being financed, whether through conventional loan, FHA (ugh!), or VA (ugh plus half a point).

To illustrate, let’s use a familiar analogue – marriage. For the lifespan of the negotiation, think of a real estate transaction as a mini marriage (don’t be shocked, I have seen RE deals that happen to outlive some marriages!). There is the initial meeting (where you wear the rose-tinted lens), then the proposition, the honeymoon phase (now wearing blinders), and afterward, the settled life (where the veil of ignorance is removed and the couple can now see each other’s (unsightly) weaknesses), then comes the ugly divorce, where both parties claw at each other’s throats as they race towards the finish line, hoping that they can somewhere along that final haul, cut off their (perceived) opponent’s air so that they can finish victorious.

And victory in this case means that they have managed to squeeze and extract all that thay can out of the deal without too much (apparent) damage to themselves!. Sounds familiar? It is! While working in various legal and social capacities I have garnered a repository of such examples.

Okay, newsflash! Although the dealings may appear similar to a mainstream marriage scenario, just know that like a marriage, (1) viewing the other party as an ”opponent” will be your first step in sabotaging your own objectives, and (2) the transaction does not have to adhere to this path of opposition, competition, and subsequent destruction. In this case, unlike academia, you don’t get extra points for conformity!!

So the point is to understand that any negotiation (or human interaction) is a road that you will both (buyer and seller) travel together for the lifespan and thus, it would be of mutual benefit to be as reasonable, considerate, and fair as possible. What you establish in the initial stages (the first showing and the subsequent Purchase & Sale agreement) will determine how the deal will go for the duration of the interaction.

To explicate: if you begin your negotiations by exhibiting the typical greed and self-serving tendencies resident in examples before you, then guess what? You have set the tone for the interaction, and the seller will more than likely counter in a similar fashion. The exchange will then simply become a rat-race, which will in the end serve only to establish the victor as being…..you guessed it – the biggest rat!

3. They place all trust in the RE agent. A few years ago, on an RE forum I read an RE agent’s response to someone’s question (don’t recall the question, but I sure do remember the response), they advised the client  to ”stop getting involved, just trust your agent and let them do their job.” That’s funny!…..No I am serious, that is funny. And I mean funny ha-ha, not funny peculiar.

Why? You may ask. Okay, let’s step back and examine it for one New York minute. In the medical or dental arena you would get a second opinion for a procedure that runs a few hundred to a couple thousand dollars, right?; in the legal field, if you have doubts about your attorney’s advice or competence, you will dash off to his rival to see if you can extract a litte more bang for your bucks, correct? Even for your relationship maladies, you will gather up your usual gaggle of FB friends, who are willing to listen to the same boring story of the never-ending drama, for years on end, and muster up some feedback for you, yes (I mean, after all, if they can’t provide that service then they have no right occupying the title of ”friend,” right!!?)?

Good! So, if we are so pluralistic in all other aspects of our lives, why would we unquestioningly canonise one real estate agent who advises us about a transaction that will majorly affect our life, health, and wealth, and that of our entire family for the next 30 years and beyond?

Good, now that I have put it that way, you are beginning to question it too, right? Sweet! You should…..in fact, you should question everything. Unquestioning acceptance is the way of the fool (but do yourself a favour and do your homework before questioning……so that you have something quasi-intelligent to ask, and not just a unwitting questions blurted out in an attempt to rescue your image of idiot savant!

4. They mistake niceness for stupidity…..yes, an old and worn, but still applicable adage! Do I really need to explain this? Unfortunately, yes….let’s not get into why. Let’s just say it needs explaining…….for posterity.

Modern society is rife with the enthusiastic, avaricious, enterprising (albeit diluted in its profundity) ethic. And the person who is nice, courteous, and considerate is perceived as weak and stupid. Such a travesty! This assumption is a grave mistake to make in any business transaction, and especially in one that you deem your ‘sancturay’ for many years. Again, the advice of doing your homework comes into play – drop the ego, pay attention to the other party, and make no inane assumtions about their grace. Humility is a currency higher than gold.

I have had the distinct advantage of being born into an Indian culture, raised in a British environment, and tutored by Punjabi and Jewish businessmen/women, and much has been gleaned in this merchantile milieu. One of the extant and palpable trait is that humility will always open fruitful doors, but pomposity….well, the evidence shows that it is carcinogenic, and thus, has and will always die a horrid death.

Bottom line: do your homework, and remember that consideration should be met with reciprocation (learn the word), and not with greed and egocentricity.

5. They immediately assume that because they are ‘buyers’ they are in a position of power, thus, they immediately seek to establish dominance. An asinine and costly faux pas, based on media programming of terms such as ‘it’s a buyer’s market’  and ‘cash is king.’ I will wager that if you ask the user of that term what exactly these terms means, very few of them can actually stutter something that closely resembles its contextual meaning; yet, these are  replete and well rehearsed verbage, unique to the nascent home-buyer.

In developed societies such as ours, it is typical to not question, but to blindly repeat, respond, and replicate the status quo, as good, law-abiding citizens are programmed to do (oh, don’t get your g-strings in a knot, as a functional member of any society, you are subject to the programming from various influences, without exception! If you disagree, then you are probably the yogi I saw levitating in the forest on my way to Starbucks…..see, I am also programmed!…….Starbucks! Starbucks! Coffee! Coffee!).

The point is that we repeat and propagate concepts that we do not understand, and the lesson that accompanies that ignorance, will always come with a price. So before you haul off an hire a Re agent to represent your desires in a home purchase, remember some important aspects here:

(a) you are about to purchase a home of which you have no knowledge, but the seller, on the other hand, is well informed. From this very perspctive, the power lies not in your money, but in his/her reservoir of knowledge….wise-up!

(b) a transaction has a life span, and regardless of how short, it is still subject to the 3 very basic phases of Western rationalistic thought: a beginning, a middle, and an end (or the finale as it is more dramatically termed). Beware of how your actions in the beginning can serve to sour the results in the end. It may appear that you have ‘power’ in the beginning; however, after the P&S is executed, power has a way of shifting drastically. And an astute and veteran seller can turn many screws along the way, and dramatically, as a coda. Don’t provoke them.

(c) negotiations, like a movie, is made up of a series of progressive frames of interaction, each with its own text, subtext, and objects; at each moment, the players must reiterate and mitigate their position. ‘Power’ comes in: (1) understanding this simple concept; (2) understanding how to dance the dance of balance and relevance; and (3) understanding that ‘power’ is simply a social construction. Power is an illusion summoned by the infirm and insecure; it is only as real as all parties agree to ratify and reify…….real power comes in knowing that simple truth.

True power in negotiations come from the ability to quell the desire to action, and to maintain balance and tranquility amongst the chaos of the querelous.

Sorry, did I lose you? Okay, here it is in a nutshell: Power is in inaction, not action (it is certainly not in the size or contents of your coffers (another social construction)), and is at its acme in its own inertia……now there is something to ruminate on at the dinner table whilst you sit across from the insufferable bouffant brandishing their stories of their worldly acquisitions, and how they came to be!

Now, as it relates to real estate, there is no ”buyers market” or ”seller’s market” that can determine the outcome of your transaction, only your presence (pay attention to details) and cognisance (do your homework) in the interaction can determine the results of this negotiation.

Caveat emptor! Buyers, don’t be fooled, do your homework, pay attention, and be considerate. As with any human transaction, the laws of efficiency and karmic code apply: What you put in, will be the recipocal of what you get out.

So if you approach your RE deal and any other negotiation with the misguided assumptions that you are running the show and that you will ”get over” in the deal, then you will more than likely go into it proffering a load of crap. That being the case, guess what will be  waiting for you in at the other side of the transaction? Yes, a four-letter word that begins with ‘s’ and rhymes with ‘sit.’…………….2 gold stars for guessing the correct answer! You have just graduated from the Novel Home Buyer’s 101 course!