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Delusions of grandeur are the bane of "Motivated" Sellers

There's a Swine flu of sorts hitting "Motivated" Property owners these days.

My suspicion is that this particular strain is as dangerous to the successful completion of a sale as H1N1 is to an immunity deficient child.

When the entire market is over-priced, the ONLY way to win is with price . . . PERIOD!

A bit of research yesterday on Lots available in a section of my market shows @ 150 MONTHS of inventory.

HOLY SHIMOLI!

What's that . . . about 13 YEARS worth of inventory at todays' rate of sales?

So . . . not surprisingly, many of these properties are owned by banks and are listed on the market at "fair Market Value."

When questioned as to how they determined this "Fair Market value", the asset managers have replied that they have "Recent appraisals" that support these prices.

So I go back to my computer to see how this could be.

Ah Yes!

300 properties available - 3 Pendings - 21 closed in the past 12 months . . . The closed ones "support" the value.

This is delusional thinking if I've ever seen it.

Here's what wikipedia says about Delusions of grandeur.

"Megalomania denotes an obsession with having and/or obtaining, grandiosity and extravagance (especially in the form of great fame and popularity, material wealth, social influence or political power, or more than one or even all of the aforesaid). It may be a symptom of manic or paranoid disorders.^{[citation needed]} However it is not considered a distinct mental disorder of itself according to the Diagnostic and Statistical Manual of Mental Disorders.

Delusions of grandeur, commonly seen in psychosis, may be seen as distinct from megalomania: a megalomaniac's overwhelming and excessive preoccupation with his or her own importance, though it may be considered pathological, is not necessarily delusional. A delusion of grandeur, if it is a true delusion, must meet the psychiatric criteria for delusion."

It's a wee stretch, but their motivation to recoup their initial investment is pure denial.

It simply makes no rational sense whatsoever to imagine that in this sea of available properties, theirs will magically rise to the top of the 150 choice heap for Buyers.

Just had the same conversation with a Seller who was very adamant about what he NEEDS for his property,and that he not accept a penny less . . . and what he NEEDS is @ 8% more than the market has demonstrated a willingness to pay.

hmmm . . .

Guess what folks!

(and shame on you banks who don't "get" this - YOU should know better)

If you want it SOLD, you don't get to put on your blinders and/or hermetically seal yourself in your own little hallucinized fantasy world in which you can create your own market just because of what you think you NEED.

You cannot ignore the reality.

You have 2 choices . . . Find the price point that will actually get the attention of the Buyers . . . or hold on to your property and wait for better weather,

A little tough love this morning, eh?

I'm just sayin'

Best,

Barry Owen
Principal Real Estate Broker
Keller Williams Realty
30 Burton Hills Blvd Suite 175
Nashville, TN 37215 - Green Hills

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Posted by Barry Owen on 10/23/2009 07:25 AM

Comments (4)

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4 Comments on Delusions of grandeur are the bane of "Motivated" Sellers

OCT

Barry,

For some strange reason sellers seem to think that location trumps price all the time. Good post.

Brian

Barry - You hit it the bullseye with this one. I do believe that the rest of the story is that lots are not going to sell until builders see a need for more homes. The demand is gone. So the supply will not shrink until the demand returns. In this case, all of the new homes on the market need to sell before builders can build homes and make a profit.

Good post, Barry. I don't think we can go by 6-months comps anymore. We are delusional if we think this is the market. If the house doesn't sell in months and months at THE market price, then it is overpriced, period. It is distressing to know, but the market has changed. Wake up everybody.

Sarah in Nashville

I hear some gnashing of teeth from Bank Asset Managers who don't like this truth . . .

but SOMEBODY had to say it, Right?

Best,

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