Once upon a time I compared real estate sales to poker. And after spending yet another trip in the car listening to hand-by-hand radio coverage of the World Series of Poker, and in light of some recent transactions, the theme seemed worth revisiting.
My basic premise is this: poker is a game that is played on assumptions based on wholely incomplete and possibly duplicitous information. Obscuring the truth is such an important part of the game that it isn’t even referred to as lying but rather cleaned up as “bluffing.”
Likewise, navigating a real estate transaction successfully also involves making a number of decisions based on wholely incomplete information. There’s little duplicitous data to be had, but such a distinction is little more then splitting hairs. Virtually no one attempts to lie during a poker hand as they’re more likely to give away the truth. And virtually no one attempts to lie during a real estate transaction lest they get caught and sue.
The ability to properly bluff, to bet knowing you are holding nothing, is the key to being a successful poker players. It’s fairly easy to win when you hold all the cards as both Chris Moneymaker and Jamie Gold have proven in recent years. (For the record, I’m not at all doubting Mr. Gold’s chops but he was in the midst of a once-in-a-lifetime run of cards.)
Similarly, it’s easy to negotiate in a sellers’ market when you’re the listing agent and it’s fairly easy to negotiate in a buyers’ market when you’re working with a buyer. It’s when you are in the opposite situation, trying to negotiate a sale on a property when there are a dozen or more similar homes also available, that an agent’s mettle is proven.
One of the additions to the Arizona Residential Resale Purchase Contract back in June of 2005 was the “Cure Period Notice.” The three-day cure period prevents both buyers and sellers from canceling contracts on the most thin of reasons (more so the seller, but that’s a story for another day.)
Once a cure period notice has been issued, the game truly is afoot. The short version is once a cure notice has been sent, the potentially breaching party has three days to do whatever it is they were supposed to do or else the seller can cancel the contract.
Will they really cancel? That is the question. And, aside from preventing clients from getting into this situation in the first place, that is where agents earn their money. It is easy to semi-bluff and claim a contract will be canceled. It’s much harder actually to cancel the contract, especially for a seller in a buyers’ market.
But it can be done. And it is done every single day, much to the surprise of buyers and their agents who assumed sellers would roll over like puppies just happy for the attention.
As I was working through this post on the 45-minute drive back from Wittmann, I started to think of poker equivalents for some of real estate bloggers. If you follow the game, feel free to tell me how close I am to the mark:
1) Phil Hellmuth – Greg Swann, hands down. Not only does he have game, but he is more than happy to make sure you know it. And if you question him? Oy.
2) Daniel Negreanu – Athol Kay, aka Sock Puppet. Also has game, but brings a definite light-heartedness to the proceedings.
3) Allen Cunningham – Jay Thompson. Steady as a rock.
4) Johnny Chan – Russell Shaw. “Did you have it, kid?” “To be honest, John, I don’t remember.”.
5) Jennifer Harmon – Kris Berg. Seems so nice on the outside but I sure as hell wouldn’t want to cross her, as evidenced by my near banning this weekend.
6) Joseph Hachem – me. Has enough game to be a threat most of the time. Biggest enemy is his own temper (as my family can attest when I’m shouting at the computer.) But is settling in to become a major force.
Well, close enough on that last one.[tags]Phoenix real estate, real estate negotiating[/tags]