No seller in the history of the world has ever given anything away. The act of giving something away defines the person who gave the gift as the giver, and a giver is not a seller just as a seller is rarely, if ever, a giver. Now that we have that cleared up, let’s talk about giving away a property. You wouldn’t think this happens all that much. But sellers routinely give their properties away to buyers. Again, calling these givers sellers is to confuse what they are, but if they are sellers at first who then give their property away, they must become givers. Sellers are givers and they give their properties away. This happens all the time.
Don’t believe me? Apparently then you haven’t been talking with many sellers. I hear it all the time, this concept of giving real estate away. If this real estate is to be given away, I think it’s sweet of the sellers to do this. It’s charitable, really. But in fact, with the utmost obviousness, no seller ever gives anything away. The store where you buy your shirts doesn’t give them to you, even if the clerk says “at this price, you’re stealing these from me“. You’re certainly not stealing them. And sellers of real estate who complain about giving their property away usually walk away from that giving event with a check in their hand and a mortgage satisfied.
If sellers did give their homes away, I’d have an absolute ton of them. If I heard of a seller who was giving away her property, I’d never let the open market see it. I’d write that giver a check for $500 and then turn them into a seller. It’s a win win. They didn’t have to give their property away, and I gave them some money to buy fish fry for the next 10 Fridays. In this, we all win. Except the fish. They lose.
What does it mean if a seller has a $20MM house and he sells it for $5MM. Well, it likely means that he wanted to sell it. It also means that a buyer wanted to buy it. It means that he probably sold for a reasonable market price- a price set indeed by the market and not solely the seller. It is, after all, the market that sets a price for anything, including the $1 menu at McDonalds. It means that someone must switch over the utilities, and that the man who cuts the grass on Thursdays needs to check with the new owner to see if he should still cut it on that day, or a different day, or maybe not at all. It means all of those things, but it never means that the seller gave her property away.
It couldn’t mean that. Because the definitions won’t let it. If she sold for $5MM, she sold at a perceived discount to her list price, but even a $15MM haircut doesn’t turn someone from a seller into a giver. A $280 haircut turned John Edwards from an attorney into an adultering politician, but that’s different. When the new owner of that home approaches the man who cuts the grass and tells him that she’ll only pay $100 weekly for his services instead of the $130 that he had charged the previous owner, the man will say that he can’t give his time away. But he isn’t giving it away either. There’s a lot of confusion lately about the cost of free.
So let’s make a pact, today. Let’s stop talking about giving stuff away when we don’t mean it. Sellers sell and buyers buy, and when the seller wins relative to the market this is fine, just as it is when the buyer wins. But these are the cases where someone actually wins, and in real estate more times than not neither side wins, but the market is served. If a market says your $950k home is only worth $600k, I’m sorry about that. Just please don’t confuse giving a deed in return for $600,000 as a gift. Because it isn’t.