Episode 3: Buyers Unbound: Embracing Transparency

Episode 3 focuses on the buyer's perspective, discussing how transparent open bidding empowers buyers to make informed decisions. Special emphasis is placed on the emotional and financial impact of transparency on buyers.

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Transcript

Episode 3 Audio

[00:00:00] 

James: You are listening to the Real Estate Blind Bid Provocateurs, a podcast, taking a bold stand against the opaque and frustrating process of blind bidding. A system that has long plaqued the real estate market with uncertainty. mistrust and manipulation. This podcast is a production of TruHome Value the pioneers of transparent open bidding in residential real estate. 

James: Now on to the show 

James Clark: Welcome everybody to episode three of The Real Estate Blind Bid Provocateurs. I'm your co host, James Clark, along with my other co hosts, KieAnn Brownell and Kari Abt. Welcome.

KieAnn Brownell: Hello?

James: We're going to be getting into what we call buyers unbound navigating transparency.. We're talking about

revolutionizing the real estate industry from a standpoint of getting rid of the blind bid process. And TruHome Value, which we are co founders of is focused in on a transparent open bid platform. Specifically, from the [00:01:00] buyer's side. These are the individuals, not the buyer's agents. We can talk about that, but from the buyer's side. What is it that they struggle with in a blind bid system and what is it about an transparent, open bid platform that makes a huge difference?

KieAnn Brownell: I think the blind bid process for buyers is literally excruciating. It is just a horrible experience. And think about it. A lot of times it's first time home buyers, young couples or young people that are excited about the opportunity to own their first home, to buy their first home. And they get going, and they get in the middle of this blind bid process.

KieAnn Brownell: And generally, This is how it works. A listing agent will say offers are due five o'clock on Sunday and so people will see the house all weekend and they'll work and they'll talk and they'll talk to their lender and they'll strategize what's our [00:02:00] offer going to be and they submit their offer and then they wait and they wait for that five o'clock deadline.

KieAnn Brownell: Is their offer getting accepted? You wait and wait. And guess what happens at 5 30? The listing agent comes back and says "Hey, everybody. Thanks for your offers. We have multiple offers. So at this point, please submit your highest and best offer by seven o'clock." And all of a sudden, everyone's wait, what?

KieAnn Brownell: Our highest and best, I already did. How do I know? Do you really have other offers? Am I bidding against myself? Instantly, we go from a point of excitement and enthusiasm to mistrust. Is this real? Am I being manipulated? Are they being honest? How do I know there's other offers? That's what immediately happens.

KieAnn Brownell: So automatically we've turned an excitinghome buying [00:03:00] process, into one of angst and mistrust and manipulation. And Kari? You know what happens then. They call their lender, and they're like,

Kari Abt: They call their lender and they start freaking out. Like we have to, A, they're calling me because they need a new lender letter to back up their new offer. If they decide that they are going to bring more to the table to have taken into consideration by the seller and they are overwhelmed, lots of anxiety.

Kari Abt: Kari, what happens if this doesn't appraise, and we have to guarantee a gap? We're gonna have to come out of this with our savings. We can't roll this into the loan. We have to go through all that. We can only lend on either the, appraised price or the appraised value, the lesser of one of those two.

Kari Abt: And so if there's a gap, they're gonna have to bring that difference. The form of cash of savings or maybe gift funds from somebody. And [00:04:00] it becomes very overwhelming, really fast for the buyer and especially as KieAnn was saying earlier, first time homebuyers. Imagine that being your first home buying experience of this, are we bidding against ourselves?

Kari Abt: How do we even know that our agent's telling us the truth? And are these agents incentivized to do this, right? Do they get paid more if they sell the house for more? And the answer is typically, yes. I would say 99 percent of the time, because most often these agents aren't capping their commissions based on what the list price was.

Kari Abt: They're riding it all the way to where it closes at. They're not doing it wrong. Nobody's stopping them from doing that, but it's one of the things that buyers are taking into consideration. These agents, they're just greedy. They want more. And, are the sellers being greedy. And, oh It's terrifying to the buyer at that point.

Kari Abt: And then what happensif we pay too much and we can't sell it in the next couple of years? What do we do then?

James Clark: What you just talked about from what KieAnn, [00:05:00] you're explaining is that's a decision that needs to be made in two hours. They're just under tremendous amount of pressure and stress, not actually knowing,

James Clark: the deal points that match the seller?

KieAnn Brownell: Yeah, I had an interesting experience in the fall with some very sophisticated buyers. A husband and wife team, he had founded a business that they sold for a lot of money, and so they found this perfect home. In the neighborhood, they loved this home, and it had been sitting for a while. I don't remember the exact prices, but let's say that it was priced at a million eight.

KieAnn Brownell: it had been sitting several they go in and we decide to offer a million five, because like I said, it had been sitting. Miraculously right after 90 days on the market, right after we offer, guess what? They got

James Clark: There's another offer.

KieAnn Brownell: There's another offer, [00:06:00] right? So I'm talking this agent and I'm like where do you think we have to be?

KieAnn Brownell: Long story short, we raise our offer to 1, 550, 000. Okay. That's where we are, et cetera. We go in, my clients are starting to distrust the process. The wife who's never really gone through this before is super nervous. She's talking to her family and they're like, It's the oldest trick in the book.

KieAnn Brownell: There's not another offer. You're getting manipulated. This is all bad. Don't trust this. Don't go there. So she starts freaking out, right? Long story short, we win the bid, we go under contract. Guess what happens? They paid too much. They got manipulated. So you know what they did? They terminated.

KieAnn Brownell: They backed This happens all the time. Don't kid yourself. This is happening over 30 percent of the time on offers in these manipulated bid situations, Over 30 percent of the time, they're terminating. Which is terrible for [00:07:00] the seller, by the way. 

James Clark: That's a crazy statistic. Over 30%.

KieAnn Brownell: my client's terminated. We backed out of our dream home that they loved in their perfect neighborhood, and a few days later it goes under contract, a month later it closes.

KieAnn Brownell: Guess what? It closed at a 1, 700,000. We have it contract for 150, 000 dollars less than it closed for. But because the process was so insane and so anxiety ridden, we terminated and we walked away from the dream home. This happens all the time. Buyers, when they get in that, like you said, a rushed decision, I've got to make this, ah, what do I do?

KieAnn Brownell: And they decide. And then they terminate because they just don't feel good about it anymore. Now everyone's harmed. It's a [00:08:00] horrible process.

James Clark: It's funny, one of the things that we talk about at TruHomeValue and the Transparent Open Bid Platform, we always say do you trust the residential real estate buying process? And the answer is just no, across the board, no, why would I, and it's this, why would I trust something that puts me potentially bidding against myself has, zero visibility into it.

James Clark: This whole pig in the poke thing, especially on that buyer side is so unbelievably stressful because the reality is right. Only one person wins a home, everybody else loses. And so when you have a situation where you have one winner, multiple losers, I know you guys have talked about this before, winning the bid in a blind bid process is 

James Clark: now I might have buyer's remorse. what just happened? Why did I win? Maybe I overpaid and eventually it'll trickle down into my agent isn't that smart [00:09:00] or, didn't direct me appropriately. You guys must see that all the time.

KieAnn Brownell: All the time.

Kari Abt: All the time. Yeah. Even on cash deals, by the way, even on, on the cash, just because I sit on the lending side here. Cash buyers walk away all the time. Yep. It'd be fun to see from our listeners in the comments, just answer that question. Do you trust the real estate process?

Kari Abt: On both sides, as a seller and a buyer, do we feel like it's, have, has our best interest at heart as consumers? It's 100 percent of the time when we're negotiating in a manner where nobody gets to see the other person. The buyer can't talk to the seller can't talk to the buyer, you don't know who you're up against and the buyers and the sellers don't know who the buyers are and 

KieAnn Brownell: And it just makes no sense. Think about it. What else in your life do you spend five, six, seven hundred, a million, two hundred thousand dollars on? Nothing! And this is how we do it. We [00:10:00] wouldn't buy a carton of milk this way. Why do we, most expensive purchase we make, buy it this way? Makes no sense.

James Clark: Yeah. And it's interesting just because Trust, integrity, transparency. As someone who's been in brand marketing forever, we go through these, brand pyramids and what is the foundation? And it's we're trustworthy. And a lot of times, by the way, we're like you better be, okay.

James Clark: but in the real estate industry, bringing trust and integrity and transparency to something is actually very, Revolutionary. to change the process especially for the individuals involved, the seller and the buyer, that really consumer driven.

James Clark: Cause that's, that's what we're working with in the industry is bringing trust, integrity, transparency is really the cornerstone to revolutionizing. The home buying process.

KieAnn Brownell: And isn't it remarkable that it's not already in the [00:11:00] process?

James Clark: Yeah. It's just not. Okay. 

Kari Abt: Yeah, all of the regulatory agencies that are involved, from a national level to a state level to a local level. Your department of regulatory agency. There's so many authorities involved in the real estate industry, and yet it's an industry that certainly lacks, at least in these times, trust, transparency, and integrity.

Kari Abt: Mind blowing!

James Clark: Oh my gosh. Okay. in episode four we're going to be talking about the advantage of the transparent open bid platform and getting rid of the blind bid pig in the poke for the sellers. Cause oftentimes, the buyers had the great advantage of seeing what offers are on the table. And then it's okay, what's the advantage to the sellers?

James Clark: Please comment on this. If you trust the blind bid, residential real estate buying process, let us know. And if you don't give us one of your blind bid horror [00:12:00] stories and we'll feature it here on the podcast. Okay, everyone. Thanks for listening.

James Clark: And we'll catch you next time. 

James: Please, follow us on Apple Podcast.

James: You can also find us on YouTube if you search for @TruHomeValue, T-R-U-H-O-M-E Value. Leave a comment, or email us at hello @ truhomevalue dot com with questions comments or stories you want to share.