Embrace Reality and Deal With It
ARTICLE BY: Maggie Clemens
Currently, I am reading the book that came highly recommended from a mastermind group that I am a part of. It is ‘Principles’ by Ray Dalio.
Ray Dalio is an investor, philanthropist and the founder of investment firm Bridgewater & Associates, one of the world’s largest hedge funds.
In the book, Life Principles – Lesson #1 is – Embrace Reality and Deal with it. “There is nothing more important than understanding how reality works and how to deal with it. The state of mind that you bring to the process makes all the difference.”
Over the next few days I realized how often people don’t really deal with reality, many times they don’t even realize it. That includes myself too.
For instance, I have been struggling to lose a few pounds since the holidays. They just don’t seem to want to go away. But, the reality is that to lose weight I simply have to use more calories than I take in – every day. It’s not rocket science, it just is. That is the reality of that situation.
In real estate, it can be difficult for buyers and sellers to embrace reality.
One particular seller comes to mind. They had a gorgeous home with beautiful views. There were a number of things that needed to be done to the home, but one thing that was always going to work against it was the location.
The home was located near the top of Dictionary Hill in Spring Valley.
For those not familiar with Dictionary Hill. The story is that a developer purchased the tract sight unseen and had subdivision plans approved for a basic grid of straight streets. The problem is that Dictionary Hill is very steep. Usually, roads on a hill that steep are drawn around the knobby terrain and are a curvier type that make getting to the top easier and create better accessibility. Not so with Dictionary Hill, they are some of the steepest in the county and can be very intimidating to those not familiar with them.
Instead of stopping and maybe re-thinking the subdivision he built homes anyway. When the views alone didn’t work, the developer threw in a set of Encyclopedias and a Dictionary. Hence the name Dictionary Hill.
Had the developer faced the reality of the situation at the time, they would have sold more homes at the time and those same homes on top of Dictionary Hill would have much higher values even today. It would be a very different situation.
When I spoke to these home sellers I had to remind them of this reality. They wanted a price that they felt a stunning view home would bring almost anywhere else in the county. But the reality was/is that driving up and down that hill is very intimidating. Many would-be buyers would not want to make that drive and the home would have to be priced at a point that enticed them enough to drive up and down it every day.
They could not see that reality. Which left me with a decision to make. I chose to walk away from the potential listing. I knew that it would be an “uphill battle” (I couldn’t resist that pun) and that it would not be a pleasant experience for them or for me. I wished them well and moved on.
In this time of low inventory, it is not an easy thing to walk away from a listing. Wanting to see what the home eventually sold for, I followed its progress. After hiring and firing 2 real estate agents, the 3rd did eventually sell the home for about $75,000 less than where the sellers had started.
Location is not something that can be changed when selling a home. The sad thing is that had they faced that reality and dealt with it they would have made more from the sale of their home. Had it been priced right from the beginning it would have sold faster and for more money. But they started very high, then had to battle buyers’ perception that there was something wrong with the house all the way down SEVENTY-FIVE THOUSAND DOLLARS.
It was hard to watch even from the sidelines. I was glad I had faced the reality of the location and walked away when the sellers were unwilling to face that reality.
Whether it be losing weight, building a subdivision or selling a home, embracing reality and dealing with it is a great lesson we all need to keep in mind.