Being that I am someone who reflects on his own actions (thanks Mom) it helps me to feel bad, quicker, but more so, make change much more rapidly happen. What could I have done to prevent future disappointment from a deal reaching fruition.  I have always recognized that real estate, economy, etc. are strong factors that affect people individually. Being that it is an individual journey, each person is affected and therefore approaches their circumstances from a different angle. Of course, there is a way to group circumstances into “most probable case scenarios”, but at the end of the day, this industry is a case-by-case adventure. This being said, I have realized that I need to make change to ensure the success of my clients, and that may include my professional guidance over their hopes (but in a structured manner). Let me explain:

  • Sellers: When selling a home there are many prevailing emotions involved when going through the process, but regardless of what they are in the interim, the end result is always 1: How much do I get from the sale?
  • Buyers: Many new, often exciting emotions circulate around this process, but the main 2 that buyers evaluate are: 1. Do I feel at home 2.How much will it cost me  (Caveat: #2 is always aligned to the comparables in the area serving as supporting evidence on how to negotiate. ) Being that Buyers are walking n and out of homes in a small -to-large geographic area, they begin to realize the shape, size, price, location of the home within the price range. When 1 homes is above the rest in all 4 categories, it becomes attractive and tempting, and feels like a good deal. When the homes are all in similar condition than it comes down to choosing which feels the best, subject to tough price negotiations. Finally, if priced toward the top with features toward the middle or the bottom – the natural response is “sellers aren’t realistic, lets more on”.
  • Realtors: We are placed in the middle to objectively anticipate what buyers will perceive your property to be “viewed at” within the 4 categories based on Closed, Under Contract, and Not Yet Sold Active homes. As a buyers and selling agent I personally am exposed to the emotions of both sides, and how they can clash or mash. So the question becomes this: A seller wants to list and the based on comparables the value of the home is (for example) $285,000. You add to room for negotiation and suggest a listing price of $299,000. Sellers says, great….but lets list at $319k because I need to walk away at $300k.   We now opened the door to the conflict moving forward.

If you have 10 cars on the lot, each a 2009 BMW XYZ, fully loaded, same color, same features, but 9 are priced at $19k and 1 is priced at $27k because the owner wants to walk away at $24k how will the car sale result?

At the end of the day, buyers do their research, through the use of Realtors, Internet, and direct exposure to the competition. I respect “the need” portion, but it doesn’t change the “what it is” as the market value of that property.

On the flip side, here are the potential outcomes you can anticipate that repeat in our market:

(example: Market Value $285k  assuming the property is marketed with a realistic description and price reflects shape, size, etc.)

If listed at $299k: Priced according to the comparable properties, should begin to see traffic and being priced properly means shorter market time and a more probable $285 outcome. To ensure the price outcome, and maybe even gain a better return, make necessary changes to highlight the home such as fresh pain, carpet, clean out, and put it in a best showing condition.

If Listed at $309k: Probability of buyers looking between $300 – $325 is greater, therefore being compared to $324k homes which may be more impressive making this home look worse. Buyers will quickly recognize that the home may need some work, or it isn’t as big as the other homes they are viewing. Eventually, this will lead to a price reduction. Upon reduction $305 buyers begin to feel similar thoughts, and market time reflects stagnancy. This property may still be at the bottom of the homes being viewed and having less features. Additionally, homes being viewed up to $300 may overlook this home, or it may be show with anticipation of significant improvements over a home listed at $294k, but it is not, therefore it becomes a disappointment.

If Listed at $320k: The same rules from the previous statement apply, but chances are that the home will not get viewed as the pictures, description and features of the home are visible on the MLS, and websites, and when you view a 3bed 2 bath ranch with medium updates and no basement at $320k next to a 3 bed 2 bath ranch with a full basement and a new kitchen at $324k, it says it all.