The difference in perception between sellers and buyers truly can be amazing.
Sellers always believe their home is worth more than it is because, well, it’s their home and it’s always been nicer than the one down the block.
Buyers always know what a home is worth because they know what property values were when they last purchased a house and isn’t this a down market anyway?
This is why real estate agents refer back to the comps – sales of comparable homes – when trying to assist in determining a fair value for a house. On the selling side we’re also looking hard at the Active listings as those represent the competition. (Actives also are helpful in dispelling the “but they’re home is listed at $xxx” argument. It’s listed there. It won’t sell there.)
Last night I was showing a house to determinedly unrepresented buyers. They’d had an agent, the agent apparently didn’t relay their reason for rejecting a counter offer and so they fired the agent and have been calling off signs ever since.
Husband asks wife the list price. Wife responds. Husband says, “they must be on drugs!”
Well, no. Not according to comparable sales not just in that neighborhood but anywhere in the high school boundaries for Sandra Day O’Connor High School. Simply put the home’s fairly priced. As a buyer, you have the opportunity to offer whatever you choose but at least based on the recent sales, the seller isn’t on drugs.
What concerned me is the conclusion that the price was out of whack came without looking at a shred of objective evidence. It’s just a gut feeling that the price is too high. Which may be valid, as it’s too high for this particular buyer, but not necessarily accurate.
The market here is slow. Not as slow as it was a few months ago, but slow. But homes also are not being given away. Prices are not reverting back to 1974.
For those who want to buy … who truly want to buy … you owe it to yourself to at least look at the comps and do some research before weighing in on a home’s value. Unless you happen to be an appraiser or otherwise spend your days evaluating homes.
Gut feelings can be wrong as often or even more often than they’re right. And if you’re wrong enough, you’ll find yourself being an eternal renter.
[tags]Phoenix real estate[/tags]