It happened again this week. It seems to happen in our brokerage several times a year, and it's the same story over and over again. It's just different people and different houses, but the same story.
When buyers are looking for a house, the human nature is to look at everything. Most have a real estate agent, but they look on their own, too. The internet, weekly and monthly print publications, for sale signs, and even private for sales.
When they see a house they like, and in this particular scenario, the house is usually staged to its optimum, and decorated beautifully. The buyer finds this property on their own as a private for sale. They fall in love with the house, and make a quick emotional decision to buy the house, without consulting with an agent. The asking price is too high but that's OK because they really love the house. I truly think that, in some cases, they don't even think about the price. They just want the house. (We're all guilty of that, but in most cases, it would be on much smaller ticket items.)
So, as the story goes, two or three years pass and family circumstances change and they need to sell the house. They call over an agent and, it becomes apparent that the house is not worth what they think it is worth. Often it doesn't show as well as when they bought it because they don't quite have the flair for decorating as the previous owner. They now have two choices, list it at market value and take a hit or list it proportionately high to the mistake they made when they bought it.
More often than not, they take the higher route, because it is less painful. But, of course, the house never sells. So later they reduce and take the hit. When the market was good, it sometimes seemed less dramatic because prices were going up and the property caught up to the market. It seemed that way, but the mistake was really made when they made the purchase, not later.
This brings me to my point. Why would any buyer go out and make the biggest investment of their life without a professional to guide them? Especially, when their fee is being paid by the seller! It makes absolutely no sense! There are so many things to consider when looking at a house and drafting an agreement of sale. Most buyers don't even know what to look out for. Pricing , of course, is one of the biggest issues. A salesperson can show a buyer what comparable houses in the neighbourhood have sold for recently. Do you think the seller is going to show a buyer comparable sales that show his property is $ 25,000. higher than the last comparable sale?