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Extreme Market Conditions

By
Real Estate Agent with Regency Realty

It is so funny how extreme our American society can be. In the real estate market, for example, when it was a sellers market, homeowners were so arrogant and wouldn't even think of dropping their prices because they just knew that some sucker would come along and pay full or above list price for their property. And they would. And how dare they ask for repairs or anything extra? They should be happy I am selling them my house. They are lucky. "Take or leave it", they would say, "because if you don't buy it now, another better offer will come tomorrow!"

Now, that is is a buyer's market, consumers have gone the other way. It's almost venence on seller's now. And part of me agrees. I mean, I was a regular consumer, not a realtor, during the boom. I just became a realtor last year, when things were taking a downturn, and now buyers want their pie and I can't really blame them.

However, they are still so unrealistic. They want to ask sellers to sell for 20 - 30% below list price. Don't they understand that there is a psychology behind making an offer?  Someone who just put their house on the market 30 days ago at a price above market will not be ready to drop their price that low so soon. They need time to stew, time to be wait, time to feel the pain of not getting what they thought their home was worth and then they need to drop their price slowly over months before they finally give in and only get 20 - 30% below their original list price. 

"Giving in" doesn't happen overnight and this is what buyers just can't accept. No matter how many comps and how much reasoning you can give behind your low offer, sellers just aren't ready to accept that the party is over and buyers are not ready to accept that their party isn't in full swing yet!  I am not sure when it ever will be. I guess sellers got such an ego boost during the boom that they haven't quite come down off it yet.  And poor buyers, they are so angry. And realtors, well, we are in the middle of it all, just trying to make sense of yet again, the extreme nature of American society.

Let's just hope that soon enough, reality will begin to hit and sellers will lower their prices just enough for buyers to feel that they've gotten a deal.

Hope you all have a great week!

Jim Dvorovy
Cutler Real Estate - Canton, OH
REALTOR - Canton Ohio Real Estate
Hi Jill,  Very thought provoking post, so nicely worded and succinct. A lot of sellers are unable to lower their asking price, as they've not owned the property the needed period of time for price appreciation and inflation to cover their mortgage plus selling expenses. The American Dream of homeownership is taking on new meaning and is continually being redefined.
Mar 16, 2008 01:45 PM
Jerry LaRose - Orlando Fl Real Estate Expert
Orlando Realty Partners, Orlando Short Sale Specialists - Orlando, FL
Orlando Fl Real Estate Expert, Short Sale Expert
jill,

Great Post, Thanks for the information. I'll keep it all top of mind. Keep up the great blogs.

Mar 16, 2008 01:56 PM
LLoyd Nichols
Premier Florida Realty of SWFL - Fort Myers, FL
Southwest Florida Homes By The Sea

Great look into the psychology of the buyers and sellers.You are so right when you mention that often sellers will not lower their price ( "stew period" as you mention) until they start to be more objective. Of course if they really can wait 10 months, they may get closer to their asking price in Gainesville.But there is a reason they listed. They want to sell their home! Perhaps the honest thing to say to the sellers at the listing presentation is that their home is worth $20,000 less then it is now agreed to be listed out, but they will have to be willing to adjust and lower their price in the near future if the home is not getting the right feed backs or...offers!

Now..if they take 6 months to lower their price $15,000 and meanwhile they are paying a mortgage of $1,200 x 6 plus insurance and property taxes, you might be able to convince them off the bat to lower the price....of course its easy to say. It is after all their home. Than you for sharing these insights. What is new? They want it all. They want to buy low and sell high. In this market this will not happen. Sellers have to be reasonable. We are in the business of selling properties and we have to tell the truth to these sellers. The last thing we want is one of these listing staying 300 days on the market. That does not help the sellers either.  

Mar 16, 2008 02:03 PM
LLoyd Nichols
Premier Florida Realty of SWFL - Fort Myers, FL
Southwest Florida Homes By The Sea

Great look into the psychology of the buyers and sellers.You are so right when you mention that often sellers will not lower their price ( "stew period" as you mention) until they start to realise the facts of life. Hopefully that stew time is not to long. It is after all your time.   

Mar 16, 2008 02:03 PM