John's Florida Real Estate Blog

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Buyers and Their Agents Must Distinguish Between Sane and Crazy Sellers

In today's real estate market there are two types of sellers that many agents and buyers will encounter. The first is the "crazy" seller. Not that he is really crazy, but his mind-set has not caught on to the reality of the home market as it is today. He thinks that prices are still increasing at a break-neck speed as in 2004 and prices his home accordingly. That is to say, way above what the market will bear. This seller often thinks his home is "special" and better than all of the other comparable homes on the market and prices it higher than all of the competition, even though his REALTOR may have strenuously advised him not to. There are many homes out there right now with high crazy prices because their sellers are not living in the real world.



The other seller is the "sane" seller. He has kept up with the news and listens to his agent. His home is priced reasonably, often just a little lower than the competition. This seller may have been a "crazy" a few months ago, but has learned that wanting a price and finding a buyer willing to pay it, are two very different things. He has "seen the light", so to speak.

Buyers, with the assistance of their agents, must identify which of these sellers they are dealing with. If you are dealing with a crazy seller who has over-priced his home considerably, it may be logical to offer much much less for the home based on what homes are actualy selling for in the same area. An offer that is $50,000 or $100,000 less than the asking price may be reasonable. The seller may not accept it, but then again he might. If he does not, you can move on to more correctly priced homes.

If you try the same thing with the sane seller who has priced his home much closer to its true market value, he could be so insulted to have such a low offer that he could refuse to negotiate anymore with you. I have seen that happen. I have received orders from sellers to never bring another offer from a buyer who made a ridiculously low offer. At the very least, the seller's attitude is going to change. And this is the seller that you have the best chance of getting a fair price from. So you do not want to insult him with a real low-ball offer. I have a seller right now that has always kept his price just below the competition and has nearly sold his home twice. Deals fell through due to bank incompetence. He is now at a very low price for his subdivision. If someone offers him a price way below his asking price, he is going to be very unhappy and insulted. He is a sane seller and is asking a very fair price for his home. It would be ill-adivsed for a buyer to mistake him for a crazy seller. They could end up losing a great opportunity.

Your agent should know what is and is not a crazy price. He or she should be able to advise you as to what a reasonable opening offer should be. You can certainly offer what you want to, but at least consider the advice of the agent that represents you.

Learn to distiguish which sellers are asking for the moon and those that are asking for a fair price for their homes. Knowing which is which will greatly help you as you work your way through the current real estate market.

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

I also invite you to visit my my website where I think you will find a lot of useful information. To get there just click on the following link: www.jelwell.century21bnr.com

John Elwell - REALTOR

CENTURY 21

Bill Nye Realty, Inc.

813-783-4444

Licensed in Florida

 

Comment balloon 6 commentsJohn Elwell • September 21 2007 08:48PM

Comments

John - Nice way for people to distinguish pricing differences - Thanks...
Posted by Eva Armstrong, Environmental Visions (Environmental Visions) over 11 years ago
Eva Thanks. I have another guy whose mobile home is at $69,000. That is his break-even point and is spot on with the comps in the area. Yet yesterday he got an offer of just $50,000. There are other mobiles in the subdivision that are priced $19,000 over what they should be, but the buyers cannot see the difference. As agents I think it is part of our job to help them see that difference and the consequences of ignoring it.
Posted by John Elwell, You Deserve a Full-Time Agent, Not Reduced Results (CENTURY 21 Bill Nye Realty, Inc.) over 11 years ago

Wow - who IS that on the top Left picture.

Looks like it hurts :)

Posted by Minnesota Home Staging Firm, Minnesota (Minnesota Home Staging Network~ MN's Top Home Staging Firm) over 11 years ago
Beth A seller who realized that his home did not appreciate 50% last year!
Posted by John Elwell, You Deserve a Full-Time Agent, Not Reduced Results (CENTURY 21 Bill Nye Realty, Inc.) over 11 years ago

John-

Great post!  I love the Seller that thinks his/her home is worth $1 million and a Buyer should pay full price.  However, when this same Seller is looking to buy another property, they think they should offer 25% off of list price and not a dime more!

Posted by Rick Tourgee, Provincetown and Cape Cod (Robert Paul Properties, Inc.) over 11 years ago
Exactly Rick! When the roles are reversed they see things very differently. Tough to get them to realize it though. They all think their own home is SPECIAL and the other guy's is just ordinary.
Posted by John Elwell, You Deserve a Full-Time Agent, Not Reduced Results (CENTURY 21 Bill Nye Realty, Inc.) over 11 years ago

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