Tuesday, March 27, 2007

A Tale of Two Buyers

I've been thinking about a couple of my recent transactions, where the scenarios were very similar but the overall experiences were very different.  And it led me to ask the question, "is there a benefit to being nice?"  This actually seems to be a recurring theme, since Steve Nicks posted about it last week in his 'If you don't have anything nice to say...' post, and I posted about it a few weeks ago in my 'Is rudeness a trend?' post.  Well, here's another example to consider:

Buyers #1 found a home they were really happy with.  They loved the floorplan, the colors, and the neighborhood.  They were very happy imagining themselves living and raising a family there.  During the offer / counter-offer process, their thoughts turned more to the logistics of the deal than the price; they wanted a good deal, sure, but they really wanted to make sure the timing would work out for everybody so they wouldn't have to move twice or have any other last minute problems.  The home inspection showed a few items of concern, but nothing that would lead you to believe the house was structurally unsound.  They decided that, even though this was a buyer's market, they didn't want to be greedy and ask for everything under the sun.  After all, they thought, this is a "used" house, and if they have to fix a couple of minor items, so be it.  So they asked the sellers to fix a couple of items, and the sellers agreed.  During the entire transaction, communication with all parties was good, and remained friendly.  Everyone did what they said they were going to, when they were supposed to, and the entire transaction went very smoothly.  Both parties (Buyers and Sellers) had set realistic expectations, and this process was exceeding them.  At the end of the transaction the Buyers hit a minor speed bump with their loan, but again communication was excellent, and the Sellers were very proactive and helpful in keeping things moving forward. 

Moving Day - the Buyers were very excited to finally move into their new home, and it was better than they could have imagined.  The home was in perfect condition..  Spotless, inside and out.  There was extra paint in the laundryroom, and each can was marked with the color & room it was used for.  There was a list of every possible phone number the buyers could need.  There was a list of instructions and helpful ideas for the swimming pool.  There were receipts from when the appliances were purchased.  The Sellers had probably spent a few extra hours putting everything together, but it had such a Wow! effect that the Buyers felt like the luckiest people on the planet.

Today, the Buyers don't really remember which inspection items they didn't request, or whether they paid $500 more for the house than they could have.  But they tell EVERYONE about how great the Sellers were.  Incidentally, the Sellers have since told me they would not have done any of those extras if the buyers were "jerks", but since they really enjoyed working with and meeting the Buyers, they wanted them to enjoy the home as much as they had.

Buyers #2 also found a home they liked.  It was their favorite home in the neighborhood where they wanted to live.  However, their negotiating strategy was much more hard-nosed, win-lose than Buyers #1.  They offered a very low price for the home, then fought tooth and nail over the counter offers.  They asked for every item the home inspector pointed out to be repaired or replaced.  The deal looked like it was going to fall apart several times during the transaction.  Communication became tense and adversarial.  I felt exhausted at the closing; I can only imagine how the Buyers and Sellers felt.

Moving Day - the Purchase Contract calls for the Sellers to leave the home in "materially" the same condition as when the offer was made, and for there to not be any personal items or debris inside or out.  However, materially can be a subjective term...  And if there are a few personal items or debris, what can the Buyers really do - take the Sellers to small claims court?  Sure enough, this house looked as if it was moved out of in a hurry.  Did the Sellers plan to come back once more to clean up but they ran out of time?  My guess is that they decided, whether consciously or not, that they had given too much already, via a lower price and all the inspection items, and that the Buyers could "deal with it."

Today, the Buyers still got a great deal on the home.  And everything that needed repair had been repaired before they moved in.  But the things they remember most are how much they didn't like the sellers, and how much extra work they had to do before they could even unpack their truck.

It's hard to put a price on the intangible items like friendliness, and there's no guaranty that just because you're friendly and you compromise you're going to move into a home in perfect condition.  However, it's something to consider.  If you feel like you're "winning" the transaction at the other party's expense, you can bet that other party won't go out of their way to do you any favors.

-Chris