So. . . the other day I presented a prospective seller with a comparative market analysis for her home – which she owns free and clear.
Let me back up a bit. I was having a conversation with a prospective seller the other day. She asked me if she could get a certain amount for her home. The amount about which she asked was very high- I knew this off the top of my head. Her home, I also knew, has no upgraded finishes or special features that would raise its value relative to other similar homes in her location. Immediately, I said no. I didn’t even hmm-hahh about it. I just said no. Then I hmm-hahhd and gave her a rough figure I thought was more accurate.
Her response was “well, we’d have to find a private buyer”.
Why do people always think they can find someone who will pay more for their house, just because it’s someone they know? In my experience, if you are a friend or relative of the person you’re buying something from, you usually expect to get a deal – not to pay more.
I explained to her that even if she could find someone who loved her house so much that they were willing to pay a price for which they could get a much larger, better appointed home in a better area, then the sale would fall through because the appraisal would come in low and the lender will only loan based on the appraised value of a home. This happens quite often.
“We could find a cash buyer”.
Cash buyers don’t pay more for something than it’s worth. In fact, they usually expect to get it for less, because they’re bringing cash to the table.
The truth is, as a seller you have to put yourself in the buyer’s shoes. Retailers do this every day. That’s why the meat and the milk are on opposite ends of the grocery store – because retailers know that shoppers will run in and grab what they need and run out. Unless you make them walk through the entire store to get what they need, passing each aisle with its tantalizing endcap display and putting extra items into their cart while they walk. Retailers think like a shopper, set up their stores accordingly, and succeed by this means in selling us all kinds of junk we don’t need.
We must also do this in real estate. Imagine yourself as a home buyer. You are looking at a certain price point. Let’s say $400,000. You look at the homes at this price, and they are all different, but are of a general quality, size, and maybe even located in a certain area or school district. Then there’s this house which is smaller, in a less desirable area, and is of average quality. It just doesn’t compare! There is no reason anyone would offer on this house when they can get something better for the same price! ESPECIALLY a cash buyer!
The best way to sell your house quickly and for maximum return is to price it fairly and get lots of viewings, and maybe even multiple offers. This is your best way to choose your terms and your price.
Conversely, if you overprice your home and it sits on the market for weeks, maybe even through a few price reductions, and you finally get a single offer (that’s low, to boot) your buyer is in a much better negotiating position than you are. He’s got you by the (insert whatever metaphor you like)!
So. . .long story short. . . I presented a prospective seller with a comparative market analysis for her home – which she owns free and clear. One of the homes I used as a comparison was the same model as hers and less than a block away, and sold for $70,000 less than the price she wanted for her home. I sympathize with my prospective seller. But this is the reality. For her, it means that she has reliable information upon which to make a decision about selling her home.
The decision she made was to not list her home at this time. For her, it’s the right decision and saved her weeks, maybe even months of frustration and angst. Because for her, the goal was a certain amount of money. She does not need to move right now and unless she was going to net a certain amount, it didn’t make sense for her to sell.
Now that’s a happy client, and I’m sure when she’s ready, we’ll do another CMA and make sure it’s right at that time. And someday it will be right, and I’ll have a happy client again!
If you’d like to find out if it’s the right time for you – give me a call and I’ll help you find the right information to make the best decision for your family!