By Jesse McCarl
If you’ve worked in real estate for any amount of time, you’ve heard the phrase, “buyers are liars.” Today on the blog, we’re going to take a look at the sentiment behind the statement, and what it means for you as a real estate agent. Turns out whole studies have been done to figure if buyers really are liars, and the results will affect how you do business!
What Lies Do They Expect You To Buy?
There are a couple different ways buyers can be liars in a real estate transaction:
First, an example of a buyer’s lies may revolve around what specifics they say they’re looking for. They may say they want a newly constructed home with a pool and a 3-car garage. This is probably a lie. These are things that are important to the buyer, sure, but they are hardly deal breakers. Perhaps this one is not so much a lie as it is an exaggerated truth…
The second way buyers are liars is a bit more extreme. As you well know, it’s not uncommon for someone to change their mind about a move. They find an agent and attend some open houses and do everything a home-buyer is supposed to do. But then, without warning, they drop of the face of the planet. At best, you’ll get a phone call saying, “We’ve decided not to move forward.” At worst, you never hear from the buyer again.
In this case, they either a) decided not to move residences at all, or b) found another agent and left you in the dust. Neither are exactly an easy pill to swallow after you’ve put so much effort forth to find them their dream home.
But Honestly, Why Do They Lie?
Buyers lie in real estate because they feel they have less power than the seller and/or agent. They lie as a way to keep the upper hand. It gives them a sense of control in what could otherwise be a very overwhelming investment.
Sound a bit extreme?
The University of Texas at Austin conducted a study to analyze buyer/seller relationships. Here is a summary of the findings:
“…buyers were not only less trusting than sellers, they were also more likely to be dishonest. [One] reason for the trust gap between buyers and sellers is the precieved transfer of power. In the course of an acquisition, the seller loses power while buyers gain power.”
The buyer knows less about the industry that the Realtor. S/he also knows less about each property than the individual sellers. The knowledge that s/he could walk away at any time may be the only sense of stability that the buyer feels in the face of spending hundreds of thousands of dollars.
Are Sellers Also Lie Tellers? (Hooray Rhyme Scheme)
It’s interesting to note that in most other industries, the buyer has the upper hand by default. It is typically the seller who feels obligated to lie or embellish in order to maintain business. Think of standard advertising, for example. A television commercial makes it look like this product will finally make you sexy and happy. It’s clearly a lie, but that kind of exaggeration is considered acceptable in order to entice the buyer.
So in most industries, sellers are the default liars. But in real estate, is the seller still guilty?
There are plenty of opportunities for sellers to lie, or at least omit certain truths. As a real estate agent, it’s your job to make it clear that total disclosure is the best way to get a fair price and avoid legal ramifications.
And let’s be transparent: you’ve probably lied on behalf of your sellers a little bit before! Have you ever spruced up a listing photo? They may be subtle white lies told in the name of marketing, but there’s no denying that liars exist on the buying and selling sides of a real estate transaction.
How to Establish Honesty
The first step to establish a culture of honesty in real estate is to be the example. If a buyer or seller doesn’t have to question any of your actions as the Realtor, s/he will be more inclined to be transparent, as well.
With sellers in particular, the best way to demonstrate the importance of transparency is to remind the seller of the legal consequences of a misleading sale.
When it comes to the buyers, the most effective way to encourage honest communication is to simply… well, encourage honest communication.
If the buyers have a list of must-haves, try to get them to prioritize all the features. Say things like, “Well, if I found a brand new house with a pool, would you sacrafice the 3-car garage?” The more you question the buyer, the closer you’ll get to the truth.
When the main concern is abandonment from the buyer/liar – which is often the case – simply reinforce the benefits of your services. Say things like, “I don’t get paid until you find the house of your dreams. If there’s anything you’re unsatisfied with or have a change of heart about, don’t hesitate to communicate that to me. Your honesty will help be the best agent I can be, both for you and future clients.”
This bold communication will breed an atomosphere of openness that will hopefully keep you from being blindsided down the road.
When I was young, my mom told me not to call others a “liar.” The word was treated the same as the heavy hitting cuss words like “crap.” So if my mom ever reads this article, she’s going to be really freaking upset with me!
Even though it sounded extreme, my mom’s attitude towards this word should probably apply towards real estate professionals. Are buyers liars? Often, yes. Should you call them that? No, not even in your own mind.
No one stands to benefit from you going in expecting a client to bail on you or mislead you.
If you encourage open dialogue, you’re doing the best you can to prevent the adage that buyers are liars. If you make your clients feel comfortable, with the knowledge that they are always in control, they will have no reason to lie to you.