Had a very long talk with a fellow agent, one that I respect a lot, about her adventures in working with a family to help them find a home.
Sellers, listen up here. This is in no way atypical. This is today’s market.
The buyers are looking in two different communities that are miles apart – one outside the beltway and the other near Metro and close in to DC. Other than that, the communities are not tremendously different. Both feature older homes. Shopping is not within walking distance, so driving is unavoidable in each. Schools are not an issue, as the child is already enrolled in a private school. That’s not going to change, regardless of where they end up living.
So they’ve looked at lots and lots of homes. According to their agent, they’ve come to at least one conclusion – if the price is really good, the house needs lots of work. They’ve decided they don’t want lots of work. This eliminates a large part of the market – all the short sales and foreclosures are pretty much out of the picture.
The part that sellers need to listen to is this – the buyers found five – FIVE! – houses that met their needs. This was the narrowed down list. Two in one community and three in the other.
When you find five houses, any of which you’d be happy to live in, you can be pretty picky about your final choice. I mean, let’s face it, you have to eliminate four of them, right?
So the things that help the buyers decide which ones to eliminate are minor things. Because remember, all five houses were acceptable. If any one of them were the only house on the market, the buyers would be happy. So it comes down to comparisons. We like the kitchen in house A and house D. We like the colors in houses B, D and E. Houses C and D have lots of features we like, but we’d have to make more changes there to make them as good as A and B. Okay, let’s eliminate C and D. What about E? House is great. We really like E. Not such a great yard, though. Oh thank goodness we can eliminate one more. Now we’re down to just A and B. This is a much easier decision now.
But, the seller of E might ask – if they liked mine so much, why not ask me to make the changes that would suit them? I might be willing to make a few concessions. The answer is, why ask when you can get what you want without asking? Interestingly enough, price never entered into the conversation. The buyers know that in this market, they’re probably not offering full price anyway.
This is probably the biggest hardship in selling when there is lots of competition. It’s the one thing that changes the market and the market value every day. Yesterday you whipped the pants off the competition. Today a new house came on the market and it’s whipping you.
Sellers are usually surprised at how fast the market, and the value of their house, can change. Sellers look at the house down the street and say, but it sold for more than I’m selling for and mine is nicer! But the buyers aren’t comparing yours to the one that already sold. They’re comparing it to others that are available for sale.
I think I’m going to talk about CMAs next – Comparative Market Analysis – and what it does and doesn’t do for buyers and sellers.
(C) 2008 Susan Pruden.
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