Don't you love it when you have a client that thinks unrealistically on both sides of the spectrum?  I mean, when they're a seller, they think they can get X amount for their house, but if they were buying that same house, they would only pay Y for it.

I have this great new listing that is priced very well.  It is about 2000 sqft, built in 1996, has a POOL, and is priced at only $219,500.  This is very competitive for this area.  I got a call from a neighbor this afternoon asking about the house.

Neighbor: How much is the house?
Me: $219,500
Neighbor: WHAT? That's way too high!  How much would it sell for without the pool?
Me: Probably about $207k, why?
Neighbor: I have the exact same floorplan, but I have 4 bedrooms, not 3 like your listing so you're priced too high.
Me: Do you have a Study?
Neighbor: No
Me: Then it's the exact same except I'm marketing it as a 3 bedroom plus a study.  What would you sell your house for today if you were selling it?
Neighbor: No less than $210k.
Me: If you would sell for no less than $210k WITHOUT a pool, why is $219,500 too much for your same house but with a gorgeous pool and perimeter fence?
Neighbor: It just is! 

This conversation continued, and it just AWE's me how differently people view their home if they were selling it verse if they were buying it.  It turns out that this neighbor is looking for an investment property for a rental and doesn't want  to spend more than $180k, but he's not going to find that in this area.  He lives right there, and even though he wants X for his house, he thinks his neighbors should only accept Y.

The thing he isn't considering is that if his neighbors all sold for Y, he would never get X because they would all bring down his value.

What are some of the ways you've tried to explain this situation to buyers and sellers?

 
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13 Comments on Price Perception as Buyer vs Seller

MAR
28
2008
199,817 Points Localism Sponsor Outside Blog
Donna - Comical post, but isn't it just so, so true?  I don't have much advice, but I have had the same conversation a hundred times, at least.
9:10pm • #1
1 Featured Post
Donna, I have found that when it comes to prices many people do not want to listen. They are so focused on what is best for them, that they do not understand what is best for them. As an inspector, I do not have much of this experience, but I have mentioned to clients that they have to look at how it benefits them.
9:12pm • #2
344,094 Points 5 Featured Posts Called Shot Master

Donna- so true. I run into similar conversation when neighbors stop by during open house. They try to justify what's the fair value or why the home is not selling.  But when they want to sell their home in the market they flip flop!
9:15pm • #3
1,206,644 Points 193 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I typically say that Sellers think their house is perceived as the "Mansion" while the Buyers look at the same house as if they are "shack" homes.........

 

 
9:21pm • #4
1 Featured Post

One word, Statistics. Whether or not they believe the statistics in another topic for a post.

Almost all buyers today think that they can low ball homes on the market. They think that sellers should just be happy that they are receiving offers on their home.

On the other hand, you have some sellers who believe that they can list a home for 2005 prices. And not matter what numbers or statistics you show them will convince them otherwise.

Unrealistic people, whether they be buyers or sellers are very hard to convince. Sometimes it takes for them to learn the hard way that what we were advising them do was correct.

Like a seller who sits on the market for month(s) without any activity on their home. Then they think it is their agents fault for not selling their overpriced home.

Buyers sometimes have to lose out on a home, or receive a counter offer over list price to learn that their offer was insulting.

Either way its a tough sell for those who are unrealistic and unreasonable.

Good Luck.
9:21pm • #5
1,306,515 Points 96 Featured Posts Outside Blog Hit Router Attended Rain Camp Called Shot Master

Lisa, Thanks.  I wish it wasn't comical, but I do have to laugh so I don't scream...

Frank, Thank you for your comments. It's all about ME ME ME ME!

Ritu, There are listings in my neighborhood that I laugh at the asking prices, but deep-down, I hope they get those prices so my value goes up.
9:21pm • #6
I see this often myself.  I lost a perspective client once who didn't like my market analysis.  He said, "I paid more than that for the house when I bought it."  What I wanted to say was I'm sorry that you overpaid, but this is what the market value is.  He was able to list his home for what he wanted, but with another firm.  The house is still on the market by the way.
9:38pm • #7
882,832 Points 50 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp
I always love that.  The buyers want a 50% discount, and then for the house they are selling, they want a "my house" surcharge. 
9:40pm • #8
I had a guy call me on a condo we had listed for $239,000.  He asked how much and I told him.  He said that is too much, there is one just like it down the street for $189,000.  I said perhaps you should purchase that condo since it is such a good deal.  (He stuttered around a bit).  What did he expect me to say?  OHHH we didn't know that well we will give you this one for $179,000.  Yeah that's it we will give it away.  Just hang on I'll get your info so I can mail you the deed.  They are free TODAY, JUST FOR YOU.
9:50pm • #9
It's really tough to work with those types of buyers/sellers.  But don't you think that generally, everyone is becoming more cognizant of market conditions?
9:54pm • #10
MAR
29
2008
1,306,515 Points 96 Featured Posts Outside Blog Hit Router Attended Rain Camp Called Shot Master

Loreena, Great analogy!

Ulises, I agree, thanks for your comments.

Laura, I've had that several times.  Even just yesterday, I had to tell a friend that they needed to start with fighting their tax assessment because their value was about $20k too hgh.  They thought they could sell it for that amount.

Lane, Exactly.  Where do people learn this?

Kathryn, I've actually said that to someone before also!!  Too funny!  Same with a buyer asking me to give a rebate.  Such and such agency gives rebates.  So go use such and such agent!  LOL

Diane, That might be true in other markets, but Dallas isn't following the national trend.  We're in a fairly strong market where most areas are selling at 97-98% of asking price.  You can get that $200k home for $196k, maybe... 
8:53am • #11
MAR
31
2008
873,941 Points 154 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master
Donna, Of course everyone thinks their house is best. Sounds like to handled it perfectly. Wonder if the potential buyer/investor will move forward since your home values are still strong?
6:52am • #13
1,306,515 Points 96 Featured Posts Outside Blog Hit Router Attended Rain Camp Called Shot Master
Missy, He probably won't.  He's 21 years old and wants to do things his way. Not that there is anything wrong with his age, but he should ask for help or be willing to accept help when offered.
8:18am • #14


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Donna Harris, REALTOR®, CDPE & ASP - Hill Country Austin Lakeway Homes

Austin, TX

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RE/MAX Austin Skyline

Address: 4611 Bee Caves Rd #200, Austin, TX, 78746

Office Phone: (512) 592-7127

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This blog is to help educate Buyers, Sellers and even other Realtors across the country.  Each market is different and the way Real Estate is done is different.  Austin Real Estate is completely different than Dallas, California and Florida and everywhere else in between.  Some times there will be other things besides real estate as I like to rant and rave as much as the next!!  Come back often!

Donna Harris, REALTOR® with RE/MAX
Donna Harris, REALTOR® with RE/MAX
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