One of the reasons I am drawn to real estate is because of the integral role that strategy plays. I’ve forever been a fan of strategy games like chess, Catan, and Risk. My favourite, bar none though, is poker. However, I’m not saying trading in real estate is just like playing a poker game. It’s not about bluffing, re-raising, and going all-in. And it’s not gambling with the idea that you can simply buy back in when you lose. However, trading in real estate IS about knowing the risks, your cards, and your position. Then factoring that all in when it comes time to negotiate the best deal for your clients. The smarter you play, the luckier you’ll be. Real estate is a game of strategy.
Part of any Realtor’s job is to gather relevant information to your particular transaction to help you make the most informed decisions. When representing a buyer this will include: condition and history of the home, relevant comparables, and market considerations and the specifics of the neighbourhood. These sorts of considerations are more tangible and often readily available. Other relevant info that can dramatically impact how the negotiations unfold include more nuanced factors: motivation of the sellers, recent changes in the neighbourhood, and disruptive neighbours are more subtle examples.
Any agent worth their salt will be very aware of how information might be perceived and the advantages and disadvantages to revealing certain cards. (Remember that as a client you are protect by the CREA code that requires that agents shall not, during or following the relationship, reveal confidential information of the client and shall not use any information of the client to the client’s disadvantage). There are ways that you as a client can also be conscious of maintaining your cards close to your chest. In doing this, you strengthen your hand when it comes time for negotiations.
When you are a Seller:
Be wary of nosy neighbours. While you may be very excited that you’ve just purchased a new home (and now NEED to sell yours…), use caution when telling those in the neighbourhood with the gift of gab. Might this neighbour unknowingly reveal detrimental information when they run into potential buyers while passing by? While Mrs. Lookieloo from three houses down may just be chatting away, she’s completely unaware that she just divulged your motivation. This can take away some of your leverage and negotiating power.
When you are a Buyer:
If you are visiting open houses or happen to run into the listing agent at any point, be very mindful of what you reveal. It’s that agent’s job to learn your needs, motivation, etc. They would pass this information back to the sellers should you come forward with an offer. You may think that it was just chatting when you casually mentioned that you have been looking for over six months and are hoping to find a place in the next month before your wife gives birth. That is in fact very important information about your motives and time frame. Revealing too much impacts your position at the negotiating table.
Entrusting someone to help you with your real estate transaction is a big decision. You are likely selecting an agent based on the belief that they are capable of representing your needs and achieving the best possible outcome for you. Keeping your cards close to your chest is important. Be aware of who you reveal relevant information to during the buying and selling process so you can empower your agent to do their best. It’s much more likely to negotiate a favourable outcome when you haven’t already laid your cards on the table.
If you’re interested in learning more about representation check this out.
