A colleague had a conversation about some shared buyers who are experiencing "teachable moments" as they continue to lose out to higher offers.
My colleague said “Our message to them right now: If everyone really used comparables all the time as a guide for what to offer, prices would be the same today as they were 40 years ago.”
It's challenging to teach people anything unless they have a willingness to learn or listen.
FIRST TIME BUYER SKEPTICISM
I am experiencing a similar challenge, trying to provide guidance to first time buyers who rely purely on numbers and statistics, but are somewhat unbelieving when told that certain properties will likely sell for more than list price, or more than recent comps.
In any open market, supply and demand will dictate price. Right now, we have very low inventory of homes for sale and very many homebuyers. (For example, my recent open house had over 150 groups of people go through. We received nearly a dozen offers, with the winning offer at significantly over list price.)
WRITE OFFER OVER LIST PRICE
Some buyers are reluctant to listen to their realtors when they are being advised to write a higher offer.
There are numerous articles about, and actual cases where there are bidding wars among buyers. Several publications like Forbes write about “Bidding Wars Are Back: 10 Tips to Win The War for Your Dream Home”. And yet, some buyers actually still think they can get a property by writing an offer for less than list price.
We try to educate them to focus on actual cash outlay, not the list price.
We want buyers to win so that they can get the home they want. We provide guidance to enable them to write a strong and competitive offer that has a good chance of being accepted.
And then, there are some buyers also think that the realtor wants a higher price because they get a higher commission.
To this day, buyers still think that agents get a 6% commission on a sale. They don’t understand that the commission is split 4 ways: the listing agent side splits the commission between the agent and the broker; and the buyer agent side splits it the same way.
There is a need for consumer education. We just hope that clients trust their agents to provide that guidance.