This post originally appeared on the Trulia Pro Blog, a blog for real estate professionals on Trulia.com. Follow Trulia Pro on Twitter: @TruliaPro.
Every agent knows that being an armchair therapist is part of the job. You have to hold the space for people to make major decisions about their money, their homes, their families and their lives in the context of the transaction they work with you on. In the process, we often are called upon to help them think through things.
In the course of this necessary process, agents often witness a seller going from one extreme position to another on the opposite end of the spectrum in the course of a few months. If we refused to work with every seller who didn’t agree with 100 percent of our advice, we’d be in rough shape. But there are misbegotten beliefs (which can change) and there are personality issues, which are lasting issues in the way that some people think about the world, make decisions and interact with others.
Here are a handful of seller personality problems that you should run, not walk, from before you sign the listing agreement and sign up for a year, or more, of drama, trauma and expenses instead of profits.
1. Endowment bias + overconfidence + rigidity.
Virtually every seller — every human, even — can fall victim to what behavioral economists call “endowment bias”: the belief that something you own is worth more than the value you would place on it if it belonged to someone else.
The same goes for overconfidence: Due to the emotional attachments and the money, time, sweat and energy many sellers have invested in their homes, it’s not at all bizarre for them to start out being overly confident in how their home will stack up against the competition, how much they will get for it, or how rapidly it will fly off the market.
That said, many sellers can be managed down off the ledge of overpricing-inducing biases and overconfidence. You can talk them through a well-designed comparative market analysis. You can take them to the staged homes that are listed in their area, in their home’s price range, and help them understand the need to stage. You can provide them with buyer and broker feedback, including the fact that their home has been on the market with no viewings twice as long as the average home in their area stays on the market. And, before they break your marketing bank and their own hearts, the average seller, having listened and learned and been educated by you and by the market, will course-correct, double down on property preparation, hire the stager, or bring down the list price.
But sellers who suffer from the endowment bias are overconfident and are completely rigid and inflexible in their home sale-related beliefs and behavior — even in the face of overwhelming facts to the contrary. These are sellers you might want to avoid.
Some people approach everything in the world with endowment bias. They simply, as a rule, cannot see the other side of any argument or understand why everyone in the world doesn’t hold their same positions and views.
Other times, when it seems a seller is hard to please, it can be a sign of a much deeper issue at work. The second seller psychosis to be on the lookout for is what I’ll call the “Cling-on Syndrome.”
No, these sellers aren’t “Star Trek” lovers. These would-be clients are not ready or willing to move on to the next phase of their lives. These sellers may simply be going through the motions of listing at the urging of family members, their real therapist or their financial advisers, but are subconsciously sabotaging their own sale with their rigid, counterproductive behavior. If you observe your potential seller is having a severe internal conflict about moving on, it might be your sign to head for the hills.
The reality of every listing agent is that it’s almost impossible to be successful when your client self-sabotages. When sellers sabotage themselves, they sabotage you, too. And if this is the way they approach everything in life, the chances that you are going to “educate” them into changing their ways are between slim and none.
A sure-fire sign of the self-sabotagers are selling clients who’ve already listed with half the agents in your market. When you run into these sellers, make sure you find out early why they think their last agent wasn’t the right fit. Pay attention to the answers and review the past marketing.
If you can’t find any holes in your predecessor’s process, there’s a good chance that the owners are the reason the listing hasn’t sold. RUN!
If you are working with a seller who seems utterly uninterested in receiving the feedback of the market or factoring in reality to their own personal fantasies about how their home sale will go, you can avoid years of wasted marketing money and frustrated efforts by moving on.
To help head off these types of sellers early in the counseling process, consider negotiating a price reduction timeline at the time they sign the listing agreement. That way, you both are in sync on the pricing plan upfront.
5. Gotcha! types.
Gotcha types are the types who are constantly looking for a way to trip you up — constantly asking you questions, not because they want the answers, but because they want to catch you in a mistake, start an argument or debate, or otherwise make the point that they are smarter and wiser than you. Gotcha types are often the sellers who don’t believe that agents deserve to make the commissions they get paid, and spend more of their time trying to prove that you don’t deserve yours or that they could do your job better than you can, with zero professional experience or training.
Now, many smart, sensible, sane sellers will grill you at the listing appointment or later inquire about your thoughts on market dynamics and how they should factor them into their personal decision-making and selling strategy. But the sane ones actually value and want to know your opinion and factor it in, even if they don’t follow your advice verbatim; the Gotcha folks are just hoping you’ll say one word they can pounce on to prove that you are less smart or savvy than they are.
With Gotcha types, there’s simply no way for you to win. If their home sells quickly for the price they got, they will fault you for not advising them to set the price higher. If it lags on the market because they refused to listen to your advice and overpriced it, they will fault you for not being a good enough marketer, smart enough strategist or persuasive enough negotiator to lure some poor sucker into paying tens of thousands of dollars more than the place is worth.
Gotchas are demoralizing to work with, because they do not understand the value of an agent at a core level, and are impossible to please, regardless of results. These sellers can also be damaging to your business in two ways:
(1) They are time and energy vampires, engaging you in endless, needless, fruitless debate on irrelevant matters over and over again, and
(2) They are unlikely to give you good referrals, even if you achieve good results. In fact, these are the very sort of sellers who will get precisely the result you promised, then go around town insisting that the fast, top-dollar sale was inevitable in this market, and gripe loudly about having had to pay your commission and gotten nothing in exchange.
Finger-pointers are the sellers who are constantly looking outside of themselves for the reasons their transactions will not work, are not working or didn’t work. These folks view themselves as victims of the crazy market, nefarious agents, unscrupulous mortgage lenders, lowballing buyers, and the list goes on.
As a result, finger pointers fail to appreciate and use the very significant power every seller has over their transaction. They refuse to understand the critical nature of their own pricing decision. They are passive in the way they select agents in the first place, almost setting themselves up to be able to blame the agent when they run into problems down the road (“I loved your marketing plan, but I have to work with my hairdresser’s babysitter’s cousin, because of the relationships involved. Sigh, I just have no choice.”)
You will hear a prospective seller’s tendency to be a finger-pointer from the very first phone call or listing interview. These are the sellers who will insist they are simply unable to proactively set a smart listing price, and are forced to overprice, powerless as they are against the market, the fact that they are upside-down, the fact that they need a certain amount of cash to move, and the fact that they took out a bunch of cash against their home at the top of the market — these are the sellers who will simply refuse to understand that none of these items have a thing to do with the value of their home or the dollar amount a buyer will pay for it.
Finger-pointers commonly do the very minimum they must to move a transaction forward, and are also prone to be lackadaisical with disclosures. Of course, if and when the buyer sues two, five or 10 years down the road, the finger-pointing seller blames the buyer, the inspectors and even you — their own agent — for not somehow divining the fact that the sewer has backed up three times in the year prior to listing and making sure that made it into the disclosures. These are the sorts of sellers who, even when they are selling multimillion-dollar properties, will commonly demand their agent dip into their commission to resolve bargaining impasses with would-be buyers, or to resolve repair issues that surface during inspections.
7. You tell us …
Agents: What are some of the seller personality problems you’ve encountered over the years? What are your own rules of thumb for knowing when to work with someone, and when to walk away from a listing?