How Many Offers Do You Have? The Power and Frustration of Information.

Knowledge is power. We can all agree negotiations favor the side with knowledge, and information is knowledge. The outcome of a real estate transaction hinges on the information a person acquires. Real estate license laws require agents to provide fairness to other licensees. Whether or not a person is playing fair depends on which side of the question we’re on. Fairness can be objective, but it’s most often subjective. The surest way to trigger an accusation of unfair practice is to exercise a client’s right to confidentiality.   

How many offers do you have in hand?  Why do real estate buyer agents ask this question? What difference will it make to their client if I have zero, one, or ten offers in hand? Is the client’s decision of price and terms to offer (or even make an offer at all) dependent on the answer? Of course, it does. And depending on the buyer’s perspective the answer could be detrimental to the seller. Why do agents expect sellers to disclose the existence of offers? I heard this recently: “Why can’t you at least just tell me if you have any offers!?” You know why, right? Because the direction from the seller is to not disclose the existence of the number of offers and one offer is a number.

Confidentiality exists for a reason. Your expectations of me are driven by your opinion of what’s best for your client. That’s true from my side of the conversation as well. The decision to keep the information confidential is the right of the seller, as long as the disclosure is not required. And that’s a problem for buyer agents who are frustrated by the advantages held by the sellers.  

What information do you want to be held confidential? The existence of offers might cause someone to make their best or better offer. The knowledge of other offers may cause some buyers to drop out. When we don’t know how a person will react to the answer, does it make sense to confirm or deny other offers are on the table?  

Inman.com Doesn’t See A Real Estate Bubble…again.

Is history about to repeat?

Inman.com didn’t get it right in ’05: Real Estate Bubbles Bubble May Deflate 1/28/05.
Better luck this time: A Real Estate Bubble Mythical at Best May 2021. 

Inman.com is the go-to source whatever it takes to move real estate. 

There was no bubble in the eyes of Inman in 2005. But even if there were, fear-not, responsible behavior would deflate the excess air—nothing to see here. Keep on buying. Who saw the tragedy coming?

Sixteen years later, we know the bubble was real. It didn’t deflate. It burst. Was it an economic crisis or a humanitarian crisis? It depends; did you lose your job, your home, your family, your dignity? Or, did you experience a temporary inconvenience before being bailed out by the federal government?

There is no doubt that history does indeed repeat itself. Wouldn’t you think there would be a few generations between one disaster and its second coming? Having been around long enough to see how easy it is to forget painful lessons, Inman.com publishing an article saying a housing bubble in 2021 is mythical at best is no surprise.  We humans have short attention spans and shorter memories, or we are the most optimistic creatures on earth.

How different is this? For history to repeat itself, we don’t need the same players. (Afghanistan plays the role of Vietnam in the 1950s and ’60s in the 21st century.) Subprime lending, low interest rates, and too few homes created a surplus of buyers in the first decade of this century. Low rates and a shortage of homes for sale, and high land prices have accelerated the price a person has to pay to own a home again. The players may be different, but is there evidence to expect the outcome will be?  

I don’t know if we are growing a bubble or not. Is it safe to say there are sound financial principles we might be ignoring and might be wise to consider before we rush into the mystic?