Client calls me and wants to buy a condo across from Microsoft in the value deficient complex (versus the higher inherent value complex).  They almost look like one complex, but are in fact two separate ones.

One bedroom condo (last summer) priced at $119,999.  They are looking at the crown molding, I'm crawling under the bed and pulling out the sofa trying to figure out what the seller did with the baseboard heaters that appear to be missing.  The client is looking at the crown molding, I'm looking at the kitchen cabinets and seeing originals from the seventies with new knobs and handles that make them "look updated".  Buyer starts catching on and saying, hey, why are the indents in the rug from the coffee table not where the coffee table now is?  They pick up the little area rug and see a huge red ink stain on the wall to wall carpet.  (seller's agent said that was "staging"...I said it was concealment of a defect.  Seller's agent said they were waiting for the home inspector to see it...I said home inspectors don't move furniture and area rugs, by and large, to find concealed defects.)

I take the buyer client over to the "better" complex to an almost identical unit priced at $101,000...that's  $19,000 less than the one the buyer had picked out from the internet because of the crown molding.  The doors are not painted white and the wood trim is not painted white and it has no crown molding, so doesn't "feel" as good to the buyer.  But I know that the HOA requires that the old and ugly sliding door they are looking at, be replaced with a brand new pretty white framed one before closing.  The HOA also requires that the seller replace that old window in the bedroom with a brand new white framed one before closing.  So "what you see is lesser than what you actually get on this one."

They buy this one for $100,000 vs. the other one, which did sell to someone else for $119,000.  While we were in escrow, another condo in the same complex and the same building as our $101,000, identical unit with about $1,500 worth of improvements, sold for $122,000! Yes, I'm still damned proud and excited about this one.  Not often you can get $20,000 of built in equity before closing...and roll out of bed distance to Microsoft to boot!  Sorry for crowing...one of my most favorite transactions.  No commission concessions on this one...clearly the buyer received "value" for the $3,000 I made on it :-)  And they are now great friends who call me before making a move in any real estate transaction.  Great people; happy clients for life.

When a property has been on the market for some time with no offers, the risk to the buyer is less. The entire marketplace has "noticed" that the asking price does not fit this house.  The marketplace may not be able to put their finger on exactly why that is,  the way I can.  But the public can inherently perceive, that the price the seller wants, does not seem to fit the "value".

The greatest risk to my buyer client is when there is a lot of attention on the property on day one.  Everyone running around looking at the "staging" of the house that is WOWing everyone in town and putting upward pressure on the pricing.  While the buyers are going from room to room "LIKEing" the place, which is great and their part of the job at hand, I am looking way past that.  This happens most often at an open house where five to ten sets of potential buyers are liking this house all at once.

Sometimes I am actually standing in the corner, scratching my head, saying don't all of these people see that those cabinets, while freshly painted with new handles and looking very nice, represent about fifty bucks worth of cost and that 1977 kitchen still needs a $20,000 remodel?  Don't they see that all of this light, bright and airy is "flip camouflage"?  Someone just popped off the doorhandle of the cheapo 1977 doors to the bedrooms, painted them white and stuck the same old handle back on.  Wa la!  Fifty cents worth of paint and now this condo is $5,000 higher than the one next door with the brown doors and brown baseboards? 

Perhaps every buyer would see what I am seeing, if they had the time.  But multiple offers on first day can push a buyer into a situation they haven't had time to evaluate thoroughly.  So my being able to see these things in a nano-second, is of value.  Not because I am "smarter" than my buyer client, or because my "buyer client" is stoopid...just because I do this day in and day out for 16 years and can spot things much more quickly as a result.