Cake in One Hand, Eating it in the Other Hand - You Must Choose!
I have had some interesting and frustrating experiences with sellers in our market lately. It seems that clients just don't seem to "get it", sometimes. We are still in the slower winter season (at least it is slower here in Austin typically).
At any rate, it seems logical that if they are buying another home locally, they can get a lot of bang for the buck, right? Well, the quick answer is probably yes. However, the part that is always fun to explain is that this principle affects their home as well.
Here is a typical exchange with someone looking to both sell and buy within the Austin area:
CLIENT: I guess there are lots of homes to choose from now, right?
ME: Yes, the inventory levels are relatively high these days.
CLIENT: So, we should be able to get a good deal, huh?
ME: I hope so. It really depends on the home that you choose, how long it has been on the market, whether it has already been reduced, factors like that.
CLIENT: Well, we want to buy sometime pretty soon, but we are not in a hurry either. We want to buy right.
ME: Well, I feel sure that we can find the right place at the right price for your needs.
CLIENT: Now, with our home, we were thinking that it's probably worth about $400,000.
ME: Hmmm... (internally I am thinking of walking out the door) Well, based on the comparable properties here in your neighborhood, I think your home will probably sell for around $350,000 or thereabouts. Any higher than that, and it won't appraise, which means the buyer won't be able to get a loan. I have to look at your home from this perspective in order to make sure things go smoothly. Keep in mind, as you mentioned before, that we will have a lot of competition out there.
CLIENT: Well, those homes don't have the yard (or kitchen or upgrades or surround sound system or pool or robot servants) that we have. Ours should bring more than that.
At this point, our appointment is at a crossroads. If they are halfway reasonable people, I can generally convince them that I am right and that it will be a waste of time to overprice their property. If they are not, we will quickly part ways so that I don't spend any more of my time, money, and effort on this. I have been down this road before, and it is tiring.
I guess it is simply human nature to assume that your home will be unaffected by the market conditions, since yours is just so darn special. Conversely, any home that you are seeking to buy can be had for a song, because times are tough. How does this make any sense? Well, it doesn't, which was the entire point of this post.
More often than is comfortable, we proud few in real estate are the ones who have to present the option from the title. Mr. and Mrs. Potential Client, I understand that you would like to have cake. Who wouldn't? Oh, you wanted to eat it, too? I'm sorry, that simply isn't possible right now. I am trying to see things from your perspective, but perhaps we should talk about setting expectations now.