Breaking Bad News to Buyer Clients
“We didn’t get the house. We were close, but our offer was bested by 15k.”
I had to deliver this bad news to my buyer clients the other day.
My clients had offered on what they thought was a great home at 123 Strawberry St in their “dream” neighbourhood, and were in competition with a few other offers. The seller’s agent came back to us for a chance to improve, and after crunching the numbers we sent back an improved offer that was their absolute top value we placed on that home. There was still some wiggle room as far as their pre-approval amount was concerned, but my clients are not comfortable spending to their maximum; and that was the smart way to play it.
Now delivering this kind of bad news is probably my least favourite part of the job. Despite doing all the due diligence on the home structure, crunching all the numbers for market value, taking into consideration some of the improvements they’d want to make within a few years, the price we came back in at was their absolute maximum they wanted to spend, and I still felt horrible.
Late Nights, Bad News.
There are some nights where I get the bad news at a late hour, but can’t break it to my clients until morning. Those sleeps do not go so well, and it usually results in me up earlier than usual, waiting until an appropriate hour to deliver the news. I’m sure it’s not a great call to get, especially if your coffee hasn’t kicked in yet.
But! Is this actually a “loss”? I would argue that it’s not.
My clients didn’t get the house because someone else offered more money than they were willing to pay for it. That sounds cold, but it’s true. They placed a particular value on the property, and decided on their maximum. Sure there are some cases where a bit of regret kicks in and my buyer clients kick themselves for not juicing the price up a bit, but overall it’s all about sticking to the plan. That doesn’t mean that the plan can’t change going forward, but it also means that we can’t get hung up on these perceived losses either.
Turning Bad News into New Metrics
I turned this “loss” at 123 Strawberry Street as a new set of metrics to consider. The price, conditions, etc from the offer we lost out on become the “water line” for the next house they are interested in. How does the new house compare to Strawberry St? Does our maximum price point change if we see the sale price of 123 Strawberry St as the new “market value” for what we are looking for (generally speaking)? Does upping the price make sense in order to get something similar to Strawberry st, or does the price point stay the same, and does this change what they are considering buying?
When the market is shifting, pivoting, or whatever other buzzword the industry wants to use, this can have an effect on what my clients can, or would be willing to, offer on. If I give them the necessary tools and information to fully understand what’s happening, there should be no reason why we can’t get a an offer accepted on a home they will be happy with, within their timelines.