“I can’t make this stuff up! We need to find a seller and not a dreamer.”
These were the words I wrote to my client after her offer was not accepted. Not only was her offer not accepted, but the seller decided to raise the price of the listing, which was already 5% higher than the comparable unit which had just sold. No amount of negotiation is going to make that owner sell his unit for market value. Why? Because this is a second home; the seller does not have to make any accommodations to show the unit; and the seller does not need to sell for financial reasons. He will sell that condo if a buyer falls in love with it and pays his magical number-a number he dreamed up, which is not based on market value.
Buyers have 3 choices.
- They can pay the magical price and hope the real estate market will appreciate enough to support that price in the future.
- They can wait and write another offer in a few months with the hope the seller will come to his senses.
- They can move on and find a seller, not a dreamer.
When representing a buyer, it is difficult for me to recommend options 1 and 2. I’ve seen the condos that people purchased for $700,000 listed for $499,000 and do not feel comfortable encouraging my clients to pay a premium price. I do not think waiting is a good idea either, because of the risks involved. The seller could find a buyer willing to overpay or the seller may change his mind and decide not to sell the property after all. By waiting, the buyer could be faced with higher prices and higher interest rates. From a buyer’s perspective, the best course of action is to move on and find a seller, not a dreamer.
Even with listing inventories continuing to decline and very little competition from other properties, sellers can still price themselves out of the market.
Have you been involved in a negotiation with someone who was completely unrealistic about the value of his or her property?