It has been a tough week for me! I had a fantastic listing where I produced 3 offers in 4 days. The sale was well over asking. The Sellers are thrilled! I also had 2 buyers on 2 seperate properties where we clearly lost in not securing the purchase. We lost to other bidders.
It is very difficult to convince a purchaser on how to WIN a multiple offer. Don't get me wrong, I have WON my fair share but more often the buyer is not ready to buy and a day later they may regret it. THIS IS NOT TO SAY that I am forcing to raise the price but rather if you want to Win the offer process there is a winning strategy.
Here is an excerpt of an E-mail correspondence I had with a client. Note: We are still friends and still doing business together. The client in question is related and involved with the offer. Names have been removed.
Comment: As for thier case, regardless of what they think, I personally think that there are ‘illiterate' buyers out there that get manipulated by real estate agents to go crazy on the offer price without checking what the price on the street is. This has nothing to do with motivation. That street's case is completely different from the one you sold. Those ones are unique detached homes that are priced individually depending on the quality of the work done in them; while these ones (and other semis and town houses) are mass production and the $30K difference between one house and another similar in layout and finished spaces can't be justified, not even by motivation. The only word I find to qualify them is ‘uneducated buyers with manipulative agents'. Anyway, this is my opinion and I hope I did not offend you in anyway because I am sure you are not like that. I hope we don't give you a hard time when our turn comes to buy.
Response:
I'm glad you DON'T think of me that way! I know what you are saying BUT....when you want something that is better than the competition, you will be willing to pay for it. Let's not forget, I can buy a Condo corner unit for less money, put in laminate flooring, paint it and still pay less. But if I want that one and it is better than the competition, I will be willing to pay for it.
Let's say your unit is worth 259K. And we have a party that is interested in buying it, but NO way are they going to pay full price for it, but they want it. Depending on how much they want it or if there is pressure from another buyer that may TAKE it from them, this price or the offer is going to get better. This is Economics at its basic form - supply and demand. Housing, Oil, Hotel rooms/rates, sporting tickets, cars. I will only pay for those things I want - you will never see me pay $1000. for Toronto Maple Leaf Gold tickets, or $500. for a Gucci wallet. But people do! For the person that purchased the home, they got what they wanted - and paid for it. The people that bought the house I sold - CRAZY! But they wanted it. They are Crazy only because I would not have done it - but then, I don't have it. The people next door to me, now have a house/property worth over $700K. I would never have done that - but they did. Where they manipulated in doing so? Do you really think the buying agent manipulated or brain washed the winning client in getting the home? As in all business, it is a game. How much can we get for what. The Problem arises when you DON"T have an option. Ie: bank fees, taxes, war, gas prices, food prices. When Florida has a frost season, the price for Oranges goes up. Do you still buy them - I don't. When Air Canada is charging 3 times the rate of other Air lines do you pay it? I do, because I won't fly A.A. or don't want the hassle of connecting flights.
I agree, these cookie cutter homes are varying in price, and if what you say is, then both the purchaser and yourself should buy something of lower sale value, do the work and be one of these Sellers when the time comes. WE ARE ALL LIKE THAT- Me Too. However, I understand this technique because I see it everyday. However once in a while individuals DO NOT fit the typical buyer profile....guess who? And for you more effort is needed to find and secure the properties - I LOVE a challenge and am very HAPPY to be doing so. I also feel that if you were not confident in me to do the job, you would not have even dealt with me. I know, I know I'm right!
As I mentioned - NO MATTER what the asking price, or the perceived value of a property, his and your characters are that of DO NOT PAY ASKING PRICE! Yet, this is what you wanted - and soon to achieve with the condo!
It's all good my friend. I'm glad we can talk like this.
See you soon
paul
Response back:
I see where you are coming from; however, we don't see ourselves doing so for a house because we won't do it for other items even when we can afford it. I am not sure of this is cultural of psychological or both.
Anyway, I think this is part of ‘know your client' exercise thing and I am glad as well that we can talk this way because we feel that our relationship with you is one notch higher than agent/client.
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