I watched a home in Alamo, California with an asking price of
$2.2 Million stay on the market for 13 months before a buyer met
the seller’s asking price. What is the learning message of this
picture? Our Real Estate market is, as they say, hot as a pistol.
I refer to the Pleasanton, San Ramon, Danville, Alamo, Walnut
Creek California "gold coast". The greatest weather, year long,
numerous world class wineries, 20 minutes light rail to San
Francisco, the world’s center of venture capital, super incomes
fueled by bio tech, silicon, and, info-tech. How is it, that in
this market of multiple offers, a high caliber home clutches on
to it’s for sale sign, like Queen Elizabeth to her hat? Like a
tiger to it’s spots? Therein starts our look at sellers who’s
pricing strategy is based on their feeling of entitlement, rather
than real world market forces that call for the agreement of at
least one qualified buyer, as well as a hard nosed lender.
I can’t delve into the mindset of this particular seller, I’m
just a Real Estate specialist. But, what if the property in
question had been shares of General Electric stock, instead of
bricks and mortar? We’ve all checked the up to the minute stock
price, and, then, sell, or, buy, instantly. Real Estate pricing
is a little more elastic, say, 3 percent, more elastic. That
three percent swing, either way, represents the typical
negotiating range. The Pleasanton, San Ramon, Danville, Alamo,
Walnut Creek California "gold coast" is a robust market place,
with many qualified buyers, and, savvy lenders. During the same
13 month time period in which the sellers wouldn’t sell, 35 other
owners of homes between $2 –4 million managed to sell their
homes within an average of 16 days from appearing on the market.
How much does it cost to hold on to a property for thirteen
months? I don’t know a homeowner who’s cost of money, taxes,
maintenance, and insurance doesn’t amount to 9% annually. Nine
percent of $2.2 Million is $190,000. After thirteen months the
sellers finally got their $2.2 Million price. My real world
numbers peg their carrying costs, for the thirteen months, at
$200,000. The market is boss. It is dollar smart to listen to the
market, not to fight it. The market punishes those who don’t
listen to it. Did I mention that I had brought a qualified
buyer/client at the start of that 13 month countdown with a
bonafide $2.1 million offer. The numbers: show that the sellers
would have been $100,000 ahead of the game had they accepted my
client’s "lower" offer.
These are the successful deal principles that I apply to all
clients whom I represent:
1) Emotions are the enemy of facts. The market consists of
facts. Command of hard data is market power. For every listing
client, there are potent tools that can boost the market value of
the property. That’s why sellers list with me.
2) I never inflate the target price of a property beyond its real
market value. Such listing technique is unethical, and, unfair,
to the seller, it chases away the most effective MLS Realtors, it
wastes my marketing dollars, and, it raises the seller’s carrying
costs, therefore, diminishes the seller’s net yield.
3) My listing seller is provided with a statistical snapshot of
up-to-date market prices, together with a custom strategy to
maximize the selling price within the up-to-date market niche.
4) My buyer client is provided with the identical statistical
snapshot of up-to-date market prices, together with a custom
bidding strategy that goes beyond a deal breaking, antagonizing,
low-ball offer. 99% of the time it is the buyer with the
strongest, most credible profile, who lands the deal on favorable
terms. My advice on choosing, and, evaluating the lender, can
save the buyer dollars that are greater than my Real Estate
commission.
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