What NFL Free Agency and Buying a Home Have in Common
Denny Green, where are you? The NFL season may have crowned the Indianapolis Colts instead of the Chicago Bears, but there's still a lot of football to come as teams prep for the upcoming draft and bolster their rosters with free agents.
Looking past the TV commentators, salary cap, and beer commercials, there are actually a lot of similarities between what goes on during free agency and buying a home, particularly in Silicon Valley. And what they have in common can help turn the real estate process into something you already know like the back of your hand.
Everyone Has Their Own Needs to Fill: What Are Your Trade-Offs?
Every single one of the 32 NFL teams has needs they're trying to address. Sure, a lot of teams may need a quarterback, but some are looking for veteran leadership, others want that laser-rocket arm, and still others just need someone who won't lose the game for them. (A collect call for you Mr. Dilfer, from Chicago.)
The point is that you need to identify what your needs are, and what trade-offs you're willing to make, before you spend a lot of time shopping. Good schools? Short commute? Lots of activities and shopping? Quiet neighborhood? Prestige value? Low price?
I worked with a family that didn't realize how much they were willing to trade for really good schools until they saw their "dream house" in an area that had average API scores. We then worked to find the right place, to the same type of house with better public schools.
Everyone Swims in the Same Pool: How Far Are You Willing to Go?
There's no gag order preventing an NFL free agent from talking to any team they want. Nate Clements alone was connected with the Titans, Browns, both New York teams and New England before signing with the Santa Clara --- er, San Francisco 49ers, for the richest contract a defensive player has ever gotten.
Unlike the NFL, there's no spending cap or minimum outlay imposed by a collective bargaining agreement when buying a house. But in markets where there are a lot of people with six-figure incomes, like the micro-markets here in the Bay Area, it's good to have a set range to avoid getting caught up in an auction mentality. After all, you might be competing with a recent winner in the acquisition sweepstakes!
And any offer you put in will probably get shopped around to other suitors before a counteroffer comes back. You might not even get a counter back.
That's okay because when Nate talks with other teams, you're doing the same thing with other homes. But, if you've fallen in love with that special place and it's the one for you, then be prepared to --- if it comes to this, and only this, home --- tell the seller that it's the one for you in your offer and its terms. You know what I mean.
Selling Agents Puff Up Their Clients: What Are the Facts?
NFL teams in free agency need to navigate the Drew Rosenhauses of the world, the uber-agents who manage to get running backs, whose knees have recently been snapped in the wrong direction, drafted in the first round. (If you're asking yourself, "Whatchoo talkin' 'bout, Willis?" look no further.) I wasn't going to mention "The Player" in Dallas but our buddy Drew represents him too.
Drew is a hard-working guy who takes clients' phone calls from the shower and never says no to a camera. But most GMs in the league will bring a back pocket full of salt to grain over anything he says at the bargaining table. Nothing deflates an agent puffing about a client like a rational, fact-oriented, and --- most importantly --- needs-based approach to looking at a property.
(The word "puff" is a technical term in real estate meaning "to lie about through exaggeration.")
There's puffing and then there's what I call adjective hunting where selling agents try to spin everything positive about a house, providing the description for the reader in lieu of their own analysis.
Does adjective hunting work? Not according to Stephen J. Dubner and Steven D. Levitt, authors of Freakonomics, and owners of unmistakably excellent first names! They write:
A "fantastic" house is surely fantastic enough to warrant a high price, right? What about a "charming" and "spacious" home in a "great neighborhood!"? No, no, no, no, and no.
In fact, the terms that correlate with a higher sales price are physical descriptions of the home itself: granite, Corian, and maple. As information goes, such terms are specific and straightforward - and therefore pretty useful. If you like granite, you might like the house; but even if you don't, "granite" certainly doesn't connote a fixer-upper. Nor does "gourmet" or "state-of-the-art," both of which seem to tell a buyer that a house is, on some level, fantastic.
There's a fine line between bland and fact-based, but I'd much rather side with personal experience and the "numbers" over the hyperbole.
Money Talks But So Does the Quality of the Offer
Pro-bowl linebacker slash defensive end slash slot corner Adalius Thomas turned down an extremely generous contract with the 49ers to join the New England Patriots... for less money. Why? Because the Brady Bunch could offer him something the, um, Silicon Valley 49ers couldn't: an East Coast home stadium and a good chance at a Super Bowl next year.
You can put up a great offer on a house in terms of money --- it can even be more than the next guy's --- but what the seller really wants to know is how certain they can be that a deal with you will go past the finish line. Are you reliable? How much of a down payment are you planning on putting down? How long are your contingency periods? Are you willing to take the place "as is"?
Obviously the amount of the offer is the number one factor, but there are many ways of increasing the quality of the offer which might supersede a nominal price difference.
There Are Always Rookies, Most of the Time
Ah, the draft: two days in the omnipresent future that bring hope even to the most mediocre and embarrassing teams in the league. All the preparation, evaluation and inspiration that goes into tapping seven people on the shoulder and saying, "Kid, come make us better than we were before you got here." (Well, maybe three, but it sounds a lot better than "Hey you, that clipboard doesn't have its own legs, you know?!")
In any sport, free agents compete for dollars with veterans from other teams and new rookies coming into the league. The same applies to real estate: new inventory hits the market everyday, whether they're new or existing homes, and it replaces the ones that have found their new owners.
What happens if you're on the market for a cornerback, there aren't any veterans out there, and the draft class isn't as good as you'd hoped? Well, it depends on your needs and goals.
1/ You can throw money at the problem: invariably some trees will literally sling fruit at you if you're willing to shake hard enough.
2/ You can cross your fingers that the market become more advantageous for you: you know you'll lose a few games in the meantime, and you're betting you'll be able to find a steal --- but you also know that free agent and rookie contracts don't tend to decrease year-over-year.
3/ Or you can choose volition. You know your list of requirements, your "musts" and "shoulds" vs. your "coulds" and "won'ts". You know how much you're willing to pay in that given market and what you're willing to trade-off within your specified timeframe.
And, with that knowledge and confidence, you can be proactive (but patient) as you refine your search with each listing you look at and each house you visit. You learn more about yourself --- your needs and wants --- with every step through every home and every detail you take in.
There are no steps backwards when you work towards knowing yourself like players' agents know their veterans and rookies.
Can you can dance toe-to-toe with them as one who's gone through that self-assessment and is on the path to self-actualization?
The owner of a football team knows what he wants and calls the shots... but how many of the best ones choose not to have a general manager?
