Indecision 2020
Here are just a few of the calls I’ve gotten lately:
A buyer searching for a Hamptons home made an appointment to see a dozen homes she found online. After much back and forth with owners and listing agents to arrange showings she called the next day, canceled the appointment, and said she wasn’t in the market to buy after all.
A couple called to inquire about renting a house for the summer, then called back to say never mind, they’re staying in the city. Two weeks later, they called again: Actually, they do want to rent … but for a different term, in a different town.
A homeowner rented their house for the summer but has now decided not to go forward with their previous summer plans. They want to get out of the signed lease so they can use the house themselves.
A renter had secured a house for the July and August and then gotten another starting in April. They want to get out of the lease for the summer house and stick with the one they have now.
A potential renter decided to secure a house sight unseen, signed the lease, then decided the perfect house wasn’t so perfect after all and backed out.
This isn’t just people being flaky, talked out of a deal at a dinner party (never get your real estate tips from a dinner party). These are folks who had no trouble making decisions before Covid-19. It’s not surprising that important decisions are hard to make in the midst of a pandemic. And it is especially not surprising that after years, or perhaps a lifetime, of being able to protect our loved ones and our livelihood, we seek to do the same in the face of the current crisis.
To the extent that I can be an observer in this, I notice that many otherwise decisive people are readily distracted because they are considering all options. I also notice that the unknown future we all face has made contingency planning so much more important and so much more challenging. How does one move forward on a lease or a purchase when both sides of a transaction are also exploring other options?
It’s hard to make a big decision when an uncertain future may change your circumstances at any time. That could mean anything from wondering if your child will go to camp this year, to wondering if your business will survive — it’s hard to make plans when you don’t know what’s ahead. And with the uncertainty regarding the pandemic, speculation regarding a recession and an election year approaching, the future has never been more unclear.
Indecision makes hard deals harder
If you think this sounds frustrating, you’re right. Constant twists and turns in a real estate deal aren’t easy for anyone: not the buyer, the seller, the broker, the lawyer, the contractor … the list goes on. I’ve written before about how many people it takes to make a “simple” deal go through, and unfortunately the stress of apparent indecision can turn a challenging deal into an unpleasant one for all involved.
The landlord, seller, tenant or purchaser on the other side of what appears to be indecision usually does not take well to changes imposed by others. As much as we try to give everyone some slack because we’re all subject to the stress of Covid-19, it’s hard to remain optimistic in a deal when circumstances can change for one or both parties. It’s also hard to focus on a purchase or lease while you’re also weighing other options.
In a skirmish between a buyer and seller (or anyone else involved in the deal), it’s the broker’s job to absorb the blows and de-escalate the conflict. We can do that — in normal times.
These are not normal times
The more stressful the situation, the more emotions interfere with deal-making. And let’s face it, what in our lifetime has been as universally stressful as a pandemic that has taken so many lives?
A buyer, seller, landlord, or tenant should be able to rely on their broker to calm the emotion, keep the focus on the deal-making process and as such help them make the decision they came to make. The broker can start by listening — letting someone recount a wish list, share frustrations, explain for example why the closing must be on a certain date or why they cannot compromise on whatever. Usually while talking, people hear the solutions for themselves, but when they don’t, a thoughtful broker listening carefully can join in to help resolve the issues.
People are largely reasonable, and when the facts are presented clearly and their expectations are managed, they can see where they’re being unrealistic. I recently had someone call who was plagued with indecision about the length of their summer rental, the start date, whether another family would be involved, what size house they’d need, and therefore what the budget would be.
The explanation went something like this: If the kids go to camp, maybe we’ll rent in August, but if they don’t we could rent for the season — that is, if my niece’s wedding in Italy is postponed. If it is not, we may take the kids and spend a week or two there. But most likely there won’t be camp or the wedding and if so, we could take a house for the whole season with my sister and her children.
I eventually interrupted with something along the lines of, “You have a lot to figure out. Why don’t you tell me your ideal plan for this summer knowing some things are out of your control and may not be resolved before you have to set a plan in motion?” The answer was simple: It was an August rental in the Hamptons just for their nuclear family. Finding that house was not easy, but it was possible. Now they have a rental, the owner has a tenant and for the time being, if nothing changes, there are two families with plans in place for August.
They are just two of many success stories. Despite the stress, the indecision, the ever-changing plans, and the restrictions on showing, the Hamptons real estate market is sizzling.