BEWARE: There could be dangerous twins in your area. They are called Fear and Greed!
Although these twins do not always hang out together, you will often hear about how they destroy one thing or another. It's not their fault. They were left on their own as children and had to learn about the tough world. Unfortunately, they keep listening to the wrong people. Their idols are different than yours and mine. Most recently, they have had a lot of focus on Real Estate. I know you are wondering how can you tell them apart and what should you do if you find them?
Well, Fear is the younger twin. He is unsure of many things in the world and is easily influenced by the articles he reads and hears about. Plain and simple, he is just afraid of what 'could' happen. This feeling may have been caused when he was younger, tried to be like his brother, Greed, and was unsuccessful. Perhaps it did happened because he watched too many movies or maybe he went to Vegas and watched too many people lose their money. No one really knows why and no one has taken the time to show/tell him differently. You may have run into him in your area without even knowing.
Here are some things that Fear may say or talk about, as well as some helpful tips for you:
- Fear - "I don't want to buy a house that will decline in value. I heard all markets are down 18%."
- Tip - Show/tell them stats in your area. True that the overall average price decline is 18.2% but that is because some areas are down over 30% and others are down 2%. For example, DFW is down 3% on average and maybe less, depending on your specific market (Frisco Texas is up 1%). If you are a Realtor in North Dallas, I may have listed your city numbers in this post.
- Fear - "I'm not sure I would qualify for a home loan because I heard banks are tightening their requirements and not lending money."
- Tip - As you know, this is incorrect. Sure, banks are looking at files more carefully. But that does not mean you do not qualify. Take a litmus test: Is credit over 580 (540 with some lenders), verifiable income, no BK or FCL within last 3 years? if they have a FICO above 580 (540 for some lenders), receive a pay check, and have not been in Bankruptcy or Foreclosure for the past 3 years? There is more too it, but this will get the ball rolling.
- Fear - "I don't know if I make enough money to buy a home, so I just rent." or "The attendant at the local 7/11 told me to wait because it will get worse."
- Tip - If you have not spoken with a professional, then you still have no idea. Suggest a local mortgage professional talk with your client to see what they may qualify for. Advice from people outside the business or someone that knows 'someone' is not a viable resource. Besides, who knows where they receive their information.
- Fear - "What if I lose my job like the other 500 million people per day?" (thank you Jim Crawford)
- Tip - "What if" you won the lottery? Should you spend your millions now? No. You should focus on what you know for sure and not live off of 'what if'. As you can see from the video, sometimes even the 'professionals' get stats wrong. Share the stats in your state, county, city. For example, Texas actually increased employment from last year by 153,000 compared to the year before (yes, that's including the last quarter). Unfortunately for other states, Texas is the only state with positive numbers. But perhaps your area is not as effected.
Now, Greed is completely opposite of his younger brother. Greed is always thinking WIIFM (what's in it for me). Often he is thinking of the quickest way to make a buck without spending money or working too hard. He wants to own the BEST and the BIGGEST, but doesn't want to pay more than the worst and the smallest. Again, its not necessarily his fault. Greed has always looked up to those that rolled the dice and got lucky. He is hoping to get lucky as well. You may have also run into Greed in your area without knowing.
Here are some things that Greed may say or talk about, as well as some helpful tips for you:
- Greed - "Im holding out for a lower interest rate."
- Tip - Sure, rates could decrease another 1/8 or 1/4 percent, but it could also increase (without notice). If you are not already approved with a lender, you may miss out on some of the lowest rates in a very long time. Don't squabble over 1/4 percent while rates are low already and home prices are still low.
- Greed - "I may be able to buy the house for less and/or wait for the listing price to drop"
- Tip - Take the advice of your Real Estate Agent and make an offer that is fair in comparison to the market. Don't focus on 'low-balling' the offer or holding out. Not everyone is looking for the lowest price and someone could come along and steal your dream home.
- Greed - "I think my house is worth more than what you are suggesting, Mrs. Realtor."
- Tip - There is not doubt that you will feel that your house is worth more... to you. Current sales for your size home show a different story. The good thing is that the house you want buy is also lower than what the sellers think its worth. This is a win/win market in many cases.
If you see these twins in your area, don't panic. As a matter of fact, welcome them into your home. Show them some pretty pictures of the real world and how it could be if they were a little more open-minded. There are a WIDE variety of homes on the market today, so the choices are almost endless. Mortgage Companies are still lending money to the majority of applicants. FHA is a fantastic loan product for those with less than perfect credit and/or with little money down. And lastly, the rates are still outstanding!
Bottom line... Explain to them why its still a good market to buy and sell Real Estate.
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Other helpful reads may include the following:
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Always available for your Frisco Texas Mortgage needs!
John Cannata p# 214.545.5604
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Are you looking to purchase a Texas home? Perhaps you love your Texas home but would be interested in refinancing your Texas mortgage to a lower interest rate?
I'll help you get pre-approved for your Texas home loan and even suggest some very knowledgeable and professional Real Estate Agents in your area of choice. If you are available to talk, I am available to listen. Give me a call or visit my website for more details.
Do you want to know all of your mortgage options? Call me today and let's discuss them further.
Always available for your Texas Mortgage and Home Loan needs!
John R Cannata P#214.728.0449
NMLS # 322646
The views expressed on this site are mine alone and do not reflect the views of my employer.
John~
When it comes to real estate and finance, emotions play a very big part in the transaction. Always, sellers believe [usually without merit] that they have a gem on their hands. Buyers, on the other hand- feel that they should be getting the deal of the century!
Mott Marvin Kornicki // Real Estate In Miami // Associate | Broker • 30 Years
Aventura // The Waterways // Bal Harbour // Sunny Isles Beach • Florida
John, wow. You really hit the nail on the head with this one! I can't disagree with any of it. Oh phooie. Hey, BTW, great pic!
Later in the rain~Deb
FABULOUS POST JOHN !!!!
Wow ! Definitely one of the best written posts of the year for me.
I'm an "Optimistic Realist" so I'll give "Fear & Greed" a run for their money any day of the week !
Love this post - I'm flagging it for a feature.
Cheers John !
Sheldon
So glad to meet you and what a great post! Very well stated and oh so true.
congrats on the gold star and you deserve it.
Took you some info searching to put this one together, right? Great post.
I think it was Bill Gates that said "when people are greedy I am fearful and when people are fearful I am greedy". great post and very well stated.
Great play on the evil twins and the havoc they both wreck & how to combat them - congratulations on being featured in the newsletter too John!
Great tips! And by the way, Texas on a whole is UP 1.4%!!
Mott - Thanks for the comment. I agree.
Hi Deb - Im sure you could find something, but I appreciate you not pointing it out. :-)
Thanks Sheldon - Not just for the compliment but for suggesting it for a Feature. I'll cross my fingers. I was pleased to see it on the Newsletter though.
Karen - Its nice to meet you as well. I was excited when I read your comment via email but noticed that Im not featured :-( But thats okay, Im happy you enjoyed the post.
Angelia - Actually, it took me a long time to write it (write it, go back and edit, go back and edit, go back and edit, then post). The idea was actually triggered from the CCAR meeting this morning. The stats about the house sales were a result of the meeting.
Shameca - I have heard that quote once before but had forgotten about it. It would have been a nice addition.
Ms. Otto - Thanks for the congratulations. It was fun. Feels like it took me forever to write, even though there is not much to it. LOL
Thanks Donna. Not sure now which is correct (1.4 or 3%) but I m happy its up either way.
Well put, and thanks for the suggestions on how to counter typical objections.
I'd add one more "kid" to the mix, and name it "corruption."
Very nice post on two important factors playing in the market right now. Thanks.
way to get people prepared to confront those two evils! nice post
You hit this post out of the park. WOW! That was great! I am sending this to an agent in my office that is having major problems with a buyer...I really think this may help him! Congratulations on a much deserved gold star!
The twins need to stay away from me! I'm ready for 'em!
Dear John,
You have it on very sensitive areas! I applaud you!
I wish I had some answers!
Sincerely,
Barbara
Nice post. I like some of the ways you defend againstt the clients misconceptions of the market values.
Right on John, Excellent post. You are correct and along with my partners we are doing our best to counter these objections. Very difficult with some clients though.
Thanks for the comment Tim.
Myrl - He is an evil one also. Good call.
Thank you Kelsey.
Tracy - Not sure if this prepares you enough. We certainly do have some tough markets out there. You just need to know how to work the 'positive' in your area.
Hi Elizabeth. Let me know what the agent thinks. I appreciate the compliment. No gold star, but thats okay as long as people enjoyed reading it. Being in the daily newsletter was nice though.
Barbara - We all wish we had the answers. LOL Life would be much easier.
Mark - There are several ways to counter the comments made by buyers and sellers who don't know the real facts. It has slowed down a bit with the media, but they really did a good job with spreading a ton of negativity.
Thank you Gabe. Its good to hear that your team is address the comments still being made.
I wish you all much success!
Many of these fears are common amongst people today, great tips for over coming these obstacles.
Very well written. I see these two everywhere, the store, the office, on the phone, online. They are following me.
Hey JL - Im sure you hear them more often than I do. As you said, its pretty common in todays market.
LOL Dee Dee. Im not surprised. I think many see them and run. I say 'Greet and challenge them'.
Dear John,
Congrats on your gold star! Very nicely written post on the evil twins.
I know I will be imagining my buyers as sellers as your caricatures during my conversations with them.
Barbara
Wheredya get that Grandma phrase? Good post for most consumers on the fence. I just did a post on interest rates and included a chart because too many people just don't believe what you're telling them anymore. Everybody from Missouri now? Well maybe so, show em with graphs etc. or answer them straight out like you did.
Didn't Nancy (the Ass) Pelosi say something about the unemployment numbers at 500 billion?
Should be a feature.
This should be featured, IT IS GREAT!!
Thank you Barbara. It was the newsletter. no gold star :-( No worries though. I thankful you liked it.
Lyn - You have never heard that phrase before? Its not the best phrase out there, but I thought I'd throw it out there. LOL And yes, it was Nancy Pelosi that quoted the 500 Million. I actually attached the LINK.
Thank you Marchel. A few have said that, but no star. :-( I appreciate ALL of the compliments though. I'll just have to work harder next time.
John ... thanks for this post about FEAR and GREED showing up in our business. We are always finding and learning about ways to deal with these selfish tendencies. Best wishes. Harrison
Ahhh some Warren Buffett stuff. The market is always dominated by fear or greed.
Thanks Harrison. Glad you enjoyed it.
Hi Mike. if we can just find a way to tame them a bit, we would be okay. They are like gremlins sometimes and keep growing.
Dear John,
I agree Fear and Greed are awful and should be stricken from our vocabulary..... That said Texas is not immune from job problems. There are thousands of Realtors that have left the business because there are fewer Buyers and Sellers. There are people now out of jobs that used to support the RE industry: inspector, transaction coordinators, decorators, stagers etc. There are people in retail loosing their jobs, because nobody is shopping anymore because they are scared. We have to fix the fear to fix the economy.
Excellent points Benita.
... BRAVO !! ... I knew this deserved the gold star ;o)
Congrats brutha !!!
Sheldon
Congratulations on the star, John! This is an excellent, well-written post. I actually read this one before it got the star and just now re-read it. :-D
Hi John, great topic. Excellent information and great comments. I am bookmarking this blog.
Outstanding post. Just like everyone else, I think I have heard both Fear and Greed. Thanks for the suggestions on how to rebut them.
Thought I better stop back in to say congrats on the feature.
Great post! Fear and greed has messed up a lot of deals for me in this business.
Great job! Congratulations on the little yellow star. I think fear & greed have some relatives out there named: annoying & pshyco!
John, I think fear and greed or opposite sides of the same coin. Fear is the opposite side of many coins as well.
Execellent post -- you have hit the nail on the head --
Fear and greed are the driving forces of the market (ok, I really hate the word greed because it isn't as much a definable word as a weapon).
Fear pushes it down, greed pushes it up. Sometimes they are balanced... usually not.
Aloha John,
Thanks for the profound post, it was an enjoyable read and very poignant. Although, I think Fear and Greed are one in the same. Fear being the passive side and greed being the aggressive.
Peace,
Great job John! I'm printing this out and hanging it on the wall to remind myself of all your great ideas!
John: This is a great one... very well stated indeed.. thank you for sharing
John - Great story line. Well written and fun to read.
Educating our clients is more important than ever in today's economic and real estate market. You make many great points.
John- awesome post! I agree with the danger of waiting for a sightly lower interest rate, while losing hundreds of dollars a month in savings. Fear and greed- dangerous friends.
John, those nasty twin brothers are all too real in today's marketplace. Thanks for putting into words what so many of us are experiencing all the time it seems. Take care and happy blogging!
John.... very, very creative... I loved it... not only on point, but very easy to understand and just a different way to look at things.... again, you hit a home run with this one, excellent job.
EXCELLENT perspective on today's market...and you described it perfectly! The twins sometimes wear a coat of "entitlement" and that really gets things messy!
great post and great comments on how to handle the twins - they are alive and well in my market
John,
It sounds to me like you do not have your buyer's best interests at heart. I would not do business with you.
If I am driving my car off a cliff, and I have FEAR that the car will go careening off the cliff, and you are sitting in the passengers seat next to me saying, "Colonel, step on the pedal, you can't let FEAR get in the way."
Who was right? John or the Colonel's fear?
In other words, it is not a FEAR of R/E prices declining, it is a prediction that the buyer is entitled to. If every seller on the market is asking a price that is not sustainable by the collective buyers of an area, then prices will fall.
If you don't have FEAR when buying a house when there's 18 months of inventory on the market, then you ain't right.
And then, as far as GREED goes..
are you willing to give up your commission and work pro bono? If not, isn't that "greedy" of you?
Would you like to commit your life savings, all your possessions, and all your future income to the church? How about to a total stranger on the street?
If wanting a bargain when homebuying is GREEDY, then is it greedy to buy the blue-light specials at K-MArt? What about using a coupon for a free chic-fil-a sandwich, is that greedy?
Looky who got a gold star! Way to go John. I know I commented before when you first posted it, but wanted to say congratulations on your well deserved gold star!!! You're da bomb!
Looky who got a gold star! Way to go John. I know I commented before when you first posted it, but wanted to say congratulations on your well deserved gold star!!! You're da bomb!
GREAT JOB...the housing market has suffered sooo much from too much information...much of it rumor or not locally sensitive...what is true in one coast, state, county,neighborhood is not in the next,,,great post !
Great Post! I know them all too well. The problem is I think they like they way they are and don't really want to be better. However, I won't give up on them. I can't, they're my two most frequent "lookers".
What a great post. This is something everyone needs to understand.
A WELL DESERVED GOLD STAR!! You go!!!
Great, great post! Well written and so timely.
Great post, you really know how to bring it home.
This was outstanding! Thank you for all the hard work you put into it. Fascinating.
What a great post! The economy goes in cycles and hopefully the "bad" cycles will not last as long as the "good" ones. Somtimes the best antecdote for fear is to put down the "gloom and doom" news that we hear all around us and focus on what is positive.
Fear is as big in stopping the economy moving forward and greed. They both polarize the state of affairs. Everyone here ought to be promote positive state of events here on twitter, the grapevines, facebook, any where we can promote positivity. Have a great day. bless
Love the title -- and the post! I'm meeting at least one of the twins every day lately.
John
How often we forget what you have just been so kind to share with us. We find ourselves creating a self prophecy. I say "we" and should say "our Country" finds itself listening to the media and finding themselves defeated before they even get started. I have never understand why it is so easy to think negative then it is to think positive. We certainly can be our own worst enemy. Thanks so much for the reminder of this great wisdom. Having a 40 year career in the Real Estate Industry has let me see many different condition and self prophecy come and go.
John,
Congratulations on the gold star my brother. You actually knocked it out of the park with this post. I couldn't have said it any better my self....therefore, I will reblog and share with my potential clients over here in Burlington County, NJ.
Have a great day
Make This YOUR Best Year Ever
Leander
When it comes to real estate, these to objections (fear and greed) have been around forever.
THANK YOU ALL for your comments. I was surprised about the Gold Star, especially since I wrote this a few days ago. Im honored that many of you found it worth enough of a star that you took the time to actually suggest it. Based on the number of comments, you can see I would be thanking you all individually. Im trying to go through and send emails to anyone that had a special request or question for me. Please know that I read each and every comment made. Thank you again!
I did want to comment on Mr. Col Orson Swindle - I think you are comparing apples to oranges. My comment on Greed was holding out on your sale because you feel your property is worth more. And although you should feel that your house is worth more, unfortunately, it is only worth what someone will pay for it (same with any type of collectible). The market determines what your house is really worth. My only point was not to be greedy. If you are waiting for another .5% drop in rates, you could miss out and get stuck with a 1% increase because the market flow switched.
If you receive a free coupon for a chicken sandwich, by all means use it. But when you get to the front counter, don't ask for 2 free sandwiches. Asking for more is my definition of greedy. Personally, I do not think you provided a good example.
If you complete a job, you should be paid for it. Im not saying to work for free. Now, a charity.. that is totally different. I have nothing negative to say about anyone who is willing to give up their time or money for the benefit of others. I also would not TELL someone to just give. Thats a personal choice. Again, I do not think it fits into the scenarios I have provided within my post. I do appreciate the comments though and Im willing to discuss it further if you would like.
Have a great afternoon.
Excellent Article! Thanks for sharing. It reminds me of one of my favorite Proverbs, "The leach has two daughters, give, give they cry". Remember, faith dispels the "evil twins" along with good practical market advice and FACTS from a qualified and experienced Realtor in your market area.
Hi John -- Very entertaining article which is also packed full of excellent advice. It's amazing what can happen when a realtor or loan officer can have an unbiased and logical conversation with buyers who have the ability to purchase and desire to do so, but just need to talk things through.
I see lots of Mr Fear and Mr Greed. Esecially in Detroit area wth home prices dropping
Thanks for the comments Cherise, Chris, and Russ.
John, this is amazing and hits home very well. Fear and Greed can "create" a lot of yuck for lack of a better word. You said it well above.
Thank you Kelly!
Wow John, You really hit this out of the ball park. It was really well written and as Kelly says hits home. Congrats, you really deserve it...
Thank you Paul. I was having some fun. Who knew it would be so well received. :-)
This is an excellent post and hits so many true and very relevant points. Sellers want more and buyers want to pay less. We have been getting many very low offers on properties that are already priced lower than anything comparable. We aren't making many of them work, but sellers are encouraged buyers are making offers which is a good thing.
John, I enjoyed your post. It is interesting how buyers and sellers all over the nation are experiencing the effects of the "evil twins".
Thank you for the compliment Jenn and Zilkia.
John,
Awesome analogy there....loved it!
Thanks Sheila. Havent heard from you in a minute. Appreciate the reply.