The Human Element

For all the excitement around real estate, people often forget that real property itself consists of little more than land and the various structures that exist upon it. What makes the process of buying, selling and leasing properties an emotionally and physically compelling experience is the dynamics of the people and their back stories that drive their connection to the property. 

Each transaction exists as a junction point where the life stories, plans, hopes and dreams of the involved parties intersect to create intrigue and often drama around the otherwise inanimate elements of the actual real estate being transacted. Whether it’s about a place to live, an investment or a business deal, there are internal and external processes and interactions that can be more complex than the attributes, numbers and due diligence process for the property determining the ultimate outcome.

During the initial stage of assessing whether a property merits consideration, the process is largely internal as you measure its location and attributes against your needs and preferences. The nature of the deliberation varies between intuitive and logical to varying degrees and the verdict doesn’t usually take very long. And once you have decided to pursue the property, the focus then turns to negotiation as you decide on what price you are willing to offer. This can become more complex in a competitive bidding environment. 

Sometimes as an exercise, after running our analysis of comparable sales to confirm a range of likely Fair Market Value, I will have my clients run what I call the “envy/relief test”, putting themselves in a position of asking which they would regret more: Getting the home at the highest price they are willing to consider, or losing out to someone else who gets it for that price. This technique breaks the decision down to basic human nature at its most primitive state, and is surprisingly effective, as I have found the turning point between envy and relief generally happens at a much more specific figure than people expect.

And then there are the relationships on both sides of the deal. These begin with the dynamics between the partners and family members that existed before either the property or other parties entered the equation. From these evolve the working relationships between the agents and parties on both sides of a transaction, all of which need to be cultivated to build and maintain good faith to pass the multiple challenges that are inherent. On occasion, one or more members of either side may be difficult or unreasonable, so there may also be a fair amount of internal work done behind the scenes to foster an effective environment for everything to have an effective and fair result.

And the rest, you might say, is in the real estate.