Buffet’s timeless advice: Investor or Realtor?
It’s one of my favorite Warren Buffet quotes:
“Never ask a barber if you need a haircut”.
When property owners ask themselves, “Should I sell my house to an investor, or list it with a realtor?”, they’ll get two different answers. An investor claims realtors are too expensive and slow, and realtors claim investors attempt to low ball you. It often leads the property owner in a paradox. Realtor or investor? No matter who you are dealing with, remember to consider motives of any person sitting across the table from you. Virtually everyone has their own agenda, just like a barber wants to always cut your hair if you ask.
So what do I advise — as both a realtor and investor? What’s my inherent bias and agenda that Buffet warns about? I’ll answer that question with another Buffet quote:
Rule number one: Never lose the money. Rule number two: never forget rule number one.
I’ll be an open book here, and expose my “agenda”, Mr. Buffet warns us about.
First off, you’re reading this most likely because you have a house you want to sell (I’m no tarot card reader here, but c’mon, you’re on a site named LubbockSellNow.com, reading the blog). Your motivation has already been established: you need to sell, you just don’t know which is the best route. You’re past the stage of “do I need a haircut or not”. Instead, you’re walking in to a barber shop asking if a buzz or a trim is the best method for you.
My motivation, my “agenda” is established on the above mentioned quote, “Never lose the money”. Let me explain:
As a Realtor, I make all my money from commission. The more money you make at a sale, the more money my wife gets to spend on diapers.
As an investor, my motivation is offering the most money I can possible. Why? If I low ball you, you’ll likely scoff, hang up the phone, and I never hear from you again (losing the money).
So when you ask me, “Should you buy it, or should you list it on the market” my motivation will be to make you the most money possible, and coincidentally me the most money possible. Which leads me to yet another Buffet quote:
“There seems to be some perverse human characteristic that likes to make things difficult”.
Every property owner has different motivations and properties in different conditions. If you’ve got a house updated, with very little wrong with it, it would be foolish not to list it on the open market (and violate quote 2). But if you’ve got a house needing repairs, outdated, and you want the cash from it fast, selling it with to a professional, local investor will make you the most money. We are not here to make it complicated, it’s quite simple really.
So a little recap, when considering how to sell your house:
#1.) Never ask a barber if you need a haircut — never ask an investor if you should sell it to them, or a Realtor if you should list with them (their answer will always be yes, despite if it loses you money).
#2.) Never lose the money — Chose the option that will make you the most money. Have a net sheet to weigh your options.
#3.) Don’t make it difficult — If someone is over-complicating the reason you should work with them, chances are, you’re about to break rule 1, 2, and 3.