Real Estate Success: The Advantages of Being Underestimated
Whether buying, selling, renting, or investing in real estate, there are many advantages to being underestimated. Having said that, the real estate world is relatively flashy. Realtors live to sport the fanciest cars and boast of their sales prowess on billboards. Home buyers have been trained to exaggerate how great they are when it comes to making offers. Being able to afford nice things, and enjoy a luxury lifestyle is great. If you are making a great income from investing in real estate, have an amazing home, have the best sales record in your area, or are a really strong and extremely qualified buyer, things are probably going well. There will certainly be times when said assets can come in handy. However, there may be times when understating your success can be advantageous. You don’t have to forgo every pleasure, but there are some very powerful benefits of being underestimated when it comes to real estate. Why Would a Real Estate Agent Allow Themselves to be underestimated? Why would any real estate agent allow themselves to be underestimated? After all, from day one of training, most are encouraged to over-exaggerate their experience. There are great branding benefits to having your face plastered on billboards, benches and yard signs all over your area. Consumers and other pros will automatically assume you are successful, even without pinning on how much money you made or how many homes you sold last year. However, some realize that too much bragging can be counterproductive for Realtors. Buyers and sellers really want someone who can help them land the best deal on a house or net them the most from their house, not the agent that will make the most money off of them. While some people need to be sold, and may secretly want to be sold, they also avoid it and put up an instant shield. Going into a listing presentation armed with a different set of bullet points for a change might go a long way. Being the biggest threat on the block, can also make Realtors the biggest target for competitors. Instead of being forced to burn resources on combating attacks from peers, that money could be better invested in actually creating deals. Why would Home Sellers Want to Be Underestimated? Owning a magnificent home is great. There may be great pleasure and pride in showing it off to friends and coworkers. However, when it comes time to sell, it may not be the best time to boast about your wealth. It can encourage vendors to automatically up their billing because they perceive you can afford it and won’t care. Be frugal. Why would Home Buyers want to be underestimated? Imagine a buyer just won the lottery for tens-of-millions of dollars. Announcing you are shopping around with that kind of cash, and with little experience in the market, is likely to encourage sellers and agents to dramatically up their prices. Even on the low end, pulling up in the nicest car you can rent, and overdressing can cause sellers and agents to be tougher in negotiations because they perceive you can pay more or borrow more. Why should Real Estate Investors want to be underestimated? There are many reasons for being underestimated as a real estate investor. There is a lot of competition in real estate investing. Trying to wow everyone with how great and wealthy you are can create a lot of enemies. This can wind up being very expensive. On the other hand, there are obvious benefits to being underestimated when scouting out the competition and potential deals. This definitely applies to making offers and acquisitions. It can be harder to try and pass a low ball offer on a home when you’ve pulled up in a Ferrari and bragged about your new yacht. At that point, you are just a ‘whale’ with a dozen harpoons trained on you. This gets even more serious when trying to amass a number of properties within a single development or neighborhood, or trying to connect several parcels of land for building a new project. If you own the two neighboring parcels and need the one on the middle to make it all happen, and the seller knows it, you can bet they’ll squeeze you far over market price. Essentially, you don’t want to show your hand before you play. So enjoy all the perks of real estate and the wealth it can provide, but consider the benefits of purposefully being underestimated too.