Part 3 of a 10-Part Series
Of course they don’t, but why should this matter?… Really, the value of a home is dictated by the market conditions, what buyer is willing to pay at that particular time, not the emotions/needs of the Seller. But, Sellers are aware that Buyers in this area are after low hanging fruit, so Sellers want to make it clear their fruit is not low hanging. So, the process often begins with Sellers already having their backs up, wary of the “lowballing” buyer. So, the focus comes off of making an agreement with a buyer/seller and on to making an argument with a buyer/seller…
Almost without fail, when I bring an offer to another agent for their listing, they pass on the message from their Seller, that, “They don’t need to sell.” This is to thwart any thought that a buyer may have that the Seller is “desperate” in any way. You don’t need to be desperate to be motivated. You can also be motivated and rational. A public MLS listing implies that a Seller wants to sell, and an offer from a Buyer implies they want to buy. So, let’s focus on the willing Buyer and Seller, not that both parties are not desperate for this transaction to happen. Can we?…
Relating back to part 2, where I discuss the lack of urgency from Buyers, there is a pricing gap between what Sellers ask for and what Buyers are willing to pay. This gap is made larger by pricing strategies of Sellers, who will inevitably have a higher perception of value than both Buyers and Market Value. Sellers will have feelings of value from memories, from the work they put into the home/cottage, from the money they spent, from their personal touches, and much more. This is inevitable. We love our homes/cottages. The important thing to realize is that these things are difficult to pass on to a Buyer who simply wants to avoid overpaying. It is sometimes a tough pill to swallow, but it is the reality. Perceived value is descending as follows; Seller, Realtor/Market, Buyer. And, sometimes an appraiser throws a wrench in there somewhere with a price even higher than the Sellers ever thought. We must always keep in mind that an appraiser does not sell homes. Further, the appraisal process limits their ability to take into consideration the market as a whole.
After we discuss perceptions and somewhat defensiveness of Sellers who want to be clear they are not desperate to sell and want to derail the buyer after low hanging fruit, we need to look at pricing as a whole. Because of the nature of the market during this hangover period, Sellers are cautious with pricing, and aim to make sure they leave “room for negotiating”. This leads to overpriced homes and low list-to-sale ratios, which perpetuates the desire to over price, in case they get a lowball offer. The vicious cycle continues. The truth is that the market doesn’t lie. You cant under price a home. If you do, you will get multiple offers and sell for over asking price. This has been proven many times. Get the advice of your Realtor (I know a good one…), look at the stats, have a discussion and make a pricing decision based on selling your home in the shortest amount of time, for the highest price. There is no crystal ball in this area, and comparable sales are never identical or close to that, but we need to make an educated decision and price it with the goal of Selling for the highest price in the shortest amount of time.
But, Sellers usually chose to price it hopefully, looking for that buyer from the city who doesn’t know better. They choose to “test” the market and lower the price as needed, looking for that extra amount of money. They worry about pricing it right and missing out on the buyer who would over pay. So, they price it a bit high, realize that the Buyer isn’t there, begin to lower their price, then eventually end up selling for less than they could have as their listing becomes stale and stigmatized. Remember, buyers are cautious around here, and everywhere for that matter. If your listing sits on the market, the question will be asked… “What is wrong with that place?” If nothing appears to be wrong, Buyers just assume it is well over priced, and now they offer even lower than they would have early in the listing. Keep in mind, Buyers aren’t living under a rock…they have access to information, they do their homework, and Sellers aren’t going to trick them into paying more than market value at that time.
So, we know that Buyers don’t need to buy and Sellers don’t need to sell, but we also know there is a healthy market up here and at the right price, homes sell quite quickly. (In fact, I know a Realtor that looks just like me, who sold a property last week after 8 days on market, for over asking. Yes, in Collingwood. Yes the highest sale of that model home yet. It was priced right.) Remember that the market doesn’t lie. You will get what the market is willing to pay for your home at any given time. The demand is here, but buyers won’t overpay. Most buyers have been watching MLS for a long time, and they know what homes begin to be reduced and what homes are priced well. Knowledge and information is very public now. So rather than emotional attachment or the wild-card high sale you’re hoping to get, let information and discussion with your Realtor be your guide when selling…even if you don’t really need to sell.