Its Not A Buyer's Business If A Seller Makes A Profit On Their Home!

A little knowledge.. 

While working as a Buyer agent, I often came across young enthusiastic clients who thought they were being smart, thoughtful and well informed by asking about what the seller paid, what the seller owes etc. Politely answering the questions to the best of my ability based on publicly available information, I would always stress that it absolutely made no difference until....

The market slid into the toilet and my clients were determined to find a property that wasn't a short sale because they had heard the horror stories of waiting month after month only to never be able to close.

Even so, I educated them that a) not all short sales were horror stories and b) publicly available information is not the whole story so c) lets find the right house, make an offer and work on negotiating the terms without regard to the sellers financial situation. We will either get an accepted offer or we wont.

That said, I find buyers getting very invested during the offer negotiation process which is why they sometimes want to know all they can before proceeding. Managing their emotional roller coaster is enormously important.

Gab,

That agent has some explaining to do to their buyers about how real estate works. I'm surprised that they would use that as an excuse for a low offer.

Rich

Gabrielle,

That is some coo coo thinking on the part of the agent...Why is that person in the business of real estate.  A loaf of bread cost a lot less a few years ago than it does now.  Will the grocery store sell you that loaf at 2000 prices?  LOL A

Thanks for the laugh. I would have liked to ask have you ever thought about becoming an appraiser?

The only time that what the seller paid comes into play is if the seller bought the house as a foreclosure, puts in what appear to be cosmetics only and turns around to try to sell it at more than $50,000.  That is where most buyers have an issue and where the appraisal could be a concern as well.  I would never use what a seller paid 20 years ago to justify my buyer's price.  You are right.  The most important is the current condition of the property compared to others on the market and what a buyer is currently offering for a property with those features.  Great post.

Gabrielle, this is a good topic.  Many buyers actually believe that the seller's purchase price should factor into the offer.  They are generally the buyers who make unaccepted offer, after unaccepted offer, in this fast paced market.

how this comes into play i'll never know but agree it comes up all the time

Gabrielle: I too wish I had a home in Hawaii. The country is moving to socialism so making a profit is totally out ot the question unles it is the buyer who is complaining.

Great job on this post, I really enjoyed it.  Thanks for sharing.

I agree, it just doesn't matter what the seller paid for the property whether it be 2 months or 20 years ago. What is it worth today is the question?

And if the seller bought too high and paid way too much will a buyer feel bad and offer enough so the seller breaks even?

Gosh, I thought that ridiculous view was gone years ago. During the height of the market buyers were doing this based on what the seller paid for the house.  It's worth what it's worth today.

The bottom line is people in general hate it when someone makes money on them or because of them, but love it when the reverse takes place.

I agree with the comments - How crazy is that!  Thanks for sharing the story - I too, wish I had a home in Hawaii.  :)

Could not agree.  I hear this a lot, buyer's ask/or look up what the seller paid for it. Why does that matter?  If you wanted to buy this house at the value in 1995, that's when you should have made the offer.

Great post...buyers have come to think they can get a home for whatever they feel is fair or what they want to pay, not what the market value is.  I've seen all kinds of stories from buyers agents justifying why it's only worth this and the seller should take it.  I'm sure they don't want to keep showing the buyer more homes and making ridiculous offers so they hope one of the sellers will bite. 

You are absolutely right.  Sure would like to hear the buyer's response a few years down the road, when they decide to sell, and they receive an offer based on what they paid for it.  Especially if they bought the house during this market slump, and are now ready to make a tidy profit on their home.  I think it would be an entirely different tune they would be singing.

Dear Gabrielle,

Thank you for blogging on this topic.  I enjoyed reading it and got some helpful information from it.

Have a great FALL season.

My best,

Trisha Bush