Believe it or not, there are a few home sellers out there that don’t want to play the game. Why is that? Could it be that some sellers have no idea what is going on right under their noses? Whose fault is that? Is it the responsibility of the sellers to figure it out on their own what is going on, or their Realtor?
Over the last couple of years, most sellers have come to the conclusion that this market isn’t the best market to be selling in. Most of these folks have decided on one of the two options available to them these days. Those options are these; sell now for a low price, or don’t sell at all. It really is that basic. Sell now for a low price, or don’t sell at all. Prices are down, people. That is why buyers are out in droves buying up deals. These buyers are buying the homes that are priced aggressively. Buyers are looking for deals, it is a buyer market and they are taking advantage of it. When I am working with a buyer, we go into the process with the notion that they are not going to make a full price offer unless the home is price right to begin with. I find the home the buyers want, run a Comparative Market Analysis, CMA, on it and decide how well the seller is priced at the time of negotiation. If the price is right, we offer near the asking price if not right at it. (But only if in competition with another buyer, no need to offer full price these days if no one else is bidding.)
On the other hand, if that CMA demonstrates that the price is too high, we offer substantially under what we believe the home should be priced at in order to get the ball rolling. Simple line of resoning, really. However, lately I have run across a few sellers in my negotiations that are unwilling to budge on price no matter what. Whether it is because they are upside down on the financing, or pride, or, most likely, it’s because they are not properly informed of the current market conditions right outside their front door. What ever the reason, these sellers are in denial when it comes to how much of a buyer’s market this truly is. The only factor that has any bearing in a negotiation is value. What the market will bear. Not the back story of the seller, as hardcore as that may seem.
If a seller is upside-down on the financing how much do you think that affects the buyer’s approach to their offer? Zilch! Let’s say the owner has a modicum of pride stored up in their home. Let’s say they built that home with their bare hands with tender loving care, blood, sweat and tears. How much does that weigh into the negotiation? Zero! Remember, this is a business deal, I need my buyers to buy right, especially in a buyer market. Let’s not forget that when it comes to investments of any kind, your money is made in the purchase not the sale. I would say that the worst mistake that a seller can make is not knowing the competition or not being unaware of the recent sales in the area. Knowing what is going on around you at all times is a powerful thing. That is why the good quarterbacks play with their head on a swivel. They had better know everything about what is going on out on that field or they will be crushed. So, why would a seller not want weekly updates on the recent sales, price reductions of the competition, feedback from recent showings, and market news? I don’t have an answer for that question, because I make sure that all of my sellers have all of that! It is what I am responsible for in my day to day business. It is the responsibility of the listing broker to provide this info to the sellers. Sellers can’t be expected to know where to gather this info, the real estate professional should do that. Once a seller is informed and realizes what type of market that they are playing in, the realize the gravity of proper pricing, and the home sells. No magic, just awareness.
The CMA is a valuable tool, and I rely on them everyday to run my business intelligently, and to provide my buyers and sellers with the most updated sales information possible. This kind of awareness is simple, yet powerful!
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