🐔 The Game Of Chicken 🐔

Playground Pain?

Many of us will remember the ‘game of chicken’ played in the playground as kids. For those of you sensible enough not to have played, let me paint you the picture.

Two kids are lined up toward one another, a good distance apart, the game is to run at each other as fast as you can until one breaks away at the last second.

Neither kid knows which way the other will break, so even if one or both do eventually veer off, they can still often run into each other.

It’s the perfect game for little humans with undeveloped frontal cortexes! The bragging rights went to the one who more often than not valued ‘winning’ over their nose not bleeding or their collarbone not breaking.

Ultimately, it’s a game that’s ‘won’ by the kid who can tolerate discomfort the longest, knowing fine-well there may be consequences for waiting beyond where they should have.

I’m seeing a very similar dynamic unfold in the real estate market these days, as sellers’ expectations can vary wildly from buyers’ hopes.

Winning The Real Estate Game of Chicken

One of the words we use most often with our clients is ‘leverage’, over the last decade we’ve identified where we can find a disproportional advantage.

This advantage can come in the form of some inside information; noticing the market is distracted by another property; seasonal timing; discovering a degree of distress; or seeing an opportunity others have missed.

Most often though, the leverage is found through patience.

‘Patience’ is a word clients rarely want to hear but would do well to listen to. In a message from a client that purchased their dream home with us recently, the client shared, ‘what’s crazy is we initially saw this place when it was $1,925,000 and thought, “well, it’s out of our range.” Your advice of patience and knowledge paid off and it came within grasp.’

Those days, weeks, and sometimes months of patience are the real estate game of chicken, and it’s higher stakes than a bleeding nose.

We waited and waited, running headlong toward the seller- neither of us appearing to break, neither willing to give in to the discomfort… until, they broke and we won, securing the property for a fantastic price and being able to negotiate other favourable terms.

Time, in this scenario, is rarely neutral. It tends to work in the buyer’s favour. Showings taper off, the lookers who weren’t serious fall away, and days on market start doing what they always do, which is apply pressure. The majority of the time, patience gets rewarded, and the seller eventually meets the market rather than the other way around.

Risk In The Real Estate Game of Chicken

One thing we won’t do though is guarantee an outcome, because the fact is that no matter how confident we are in the game of chicken, we can still end up losing our leverage.

The biggest risk in the real estate game of chicken is another buyer, one who doesn’t care what the comps say, who isn’t interested in waiting, and who might offer more than you’re willing to pay.

We had that happen recently too, where we were waiting patiently for the seller’s expectations to fall in line with our own, and next thing we know… accepted offer… for another party.  

Even then though, with less leverage than before, we submitted a backup offer that bumped the current offer in place and we were able to secure the home. Did we pay more than we had previously hoped? Yes. Did we still secure the property? Yes.

Depending on how long we wait, losing leverage like that is the less likely outcome, but it’s a possibility, and we won’t pretend otherwise.

What The Game of Chicken Is Really About

As much as we talk about ‘leverage’, ‘strategy’, ‘comparables’, ‘market stats’, etc., that’s not what the game of chicken is really about.

Ultimately, the game of chicken is about what level of discomfort you can live with.

If losing this particular house to somebody else’s impatience or ignorance would genuinely keep you up at night, that’s worth knowing about yourself before an offer is submitted by someone else, not after.

If you can live with that risk in exchange for more leverage, holding the line is generally the best move, until the seller’s expectations fall in line with yours.

Honestly, this is a part of the job I both love and hate. With both clients above, we could only give them expected outcomes, not guarantees. With both clients above, the greatest comfort I could bring was ‘the things that are within our control and under control; and we need to be comfortable with the things outwith our control.’

‘People Over Property, Always.’ means that we’re often more counsellors than Realtors, and that’s a good thing. We constantly tailor our advice to clients’ risk tolerance and stress threshold. There are some clients for whom waiting another week to potentially secure a further $10,000 discount is simply not worth it; and there are others for whom it’s not just advisable but necessary.

If you’re reading this article, there’s a good chance you’re one of our clients considering entering the ‘Game of Chicken,’ we’re here to talk through all the risks and give you the best advice possible to help you achieve your goals.

Now… does anyone have a full face hockey helmet they’re looking to part ways with?! I’ve got to protect this pretty nose of mine!