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 that13 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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