An interesting phenomenon often arises when one person or family decides to sell a property and purchase another one. The situation occurs because just about everyone wants to sell high and buy low. This idea is ingrained in the business thought process.
Realistically, however, objective measures bear out the fact your property is worth what the current comparables indicate. What are similar properties in your area selling for? That is the gold standard of professional pricing with adjustments being taken into account for the individual characteristics that may be present in a specific property.
I’ve worked with folks who insist their property is more valuable than the one across the street. For all kinds of reasons, the potential seller elevates his own property above the available comparable properties in an attempt to justify a higher pricing model.
On the other hand, when considering buying, the same seller downplays the property being evaluated in an attempt to justify making a low ball offer. This speaks to human nature and wishful thinking. I hear: “but this doesn’t have x, y, or z”. And—they bought this place 6 years ago, why should I give them so much now?”
When buyers choose a home based on purely financial considerations, it’s a business deal. When buyer’s purchase because the property calls to them emotionally, the decision is driven by more than what’s the lowest price of purchase.
Compromises on the buyer and seller side must be made if a real estate transaction is to be closed. A potential buyer should not expect to purchase a legitimately priced home for ½ the asking price. Comparables need to be considered in order to arrive at a reasonable first offer. Going over a laundry list of perceived negatives will simply drive the seller away from making a deal.
A good real estate agent will price a property appropriately. The negatives on a buyer’s list will already be known and accounted for in the listing price. In hot markets, a seller will not give a low ball offer the time of day. In slower markets, unless the owner is close to foreclosure, the buyer gets a very cold shoulder.
In order to maximize your chances of buying and selling successfully, use comparables for both your selling price and maximum purchase price. High balling the sales price and low balling your buying price is a formula sure to lengthen your selling and buying time line. Contact me today for realistic pricing opinion and realistic purchase pricing.