Jim Valentine on Real Estate
It’s no secret that buyers want to pay as little as possible, and sellers want to get as much as possible when they sell their house. There is, however, a mystical thing called “market value.”
The definition of “market value” most commonly used is "the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.” Simply put, “what a willing buyer will pay and a willing seller will take,” with neither affected by undue stimulus.
The 2021 Northern Nevada market saw amazing prices paid resulting in many sellers listing at very ambitious prices. Unfortunately, when a buyer “prices forward” (translation – lists too high) they quickly embrace and fall in love with that price and believe their home is really worth the price they are asking. No matter how much preparation and perspective an agent gives them, over 90% of the sellers fall into this trap.
As prices drop, disappointment reigns and sellers forget the original orientation and perspective provided by their agent. When offers come in at the current realistic market value they are insulted and call it a low-ball offer. How can an offer be a low-ball offer if it is at market value?
It may be off the mark of the listed price, which broaches the question… why don’t we call over priced listings high-ball listings? We call them overpriced, but that doesn’t have the same negative connotation as a “low-ball” offer accusation. Somehow, it seems like a bit of an affront when someone is accused of making a low-ball offer, but one is never deemed to be out of line when overpricing. What about the sellers that list low to stimulate offer frenzy? Where is the scorn for that move?
There really should be no judgment of an offer regardless of where it comes in relative to the list price or market value. If a buyer steps up and makes an offer look at it seriously. They may be fishing, hoping you take the bait and counter in a favorable manner, or, better yet, take their offer.
They may reflect what is going on in the market from a buyer’s perspective while you are hoping against hope to hit the proverbial grand slam when they are serving up a triple. How does the market help you? Look long term and with a broad perspective so you can make a good decision, not an emotional decision based on unrealistic expectations.
There is enough emotion in real estate without adding an opinion of an offered price, whether list price or purchase offer price. Agents shouldn’t get involved with judging an offered price other than objective analysis of where it relates to the real market. This is especially true today when nobody can really say what market price is because buyers are so desperate and are offering unexpected prices … often but not always.
Do you have a property that will attract the “emotional tug on the wallet”? If you do, or are attracted to buy one, you will find yourself with a lot of uncertainty in pricing today. Understanding that, don’t be afraid to offer what you feel it is worth to you, or be offended by an offer presented. Cool heads will prevail, stay cool.
Markets can change on a dime, and the sooner you recognize it the better you will be able to make a good decision. People’s circumstances can also change quickly causing a radical adjustment in motivation, pro or con to your objectives. Submit your offer in good faith based on your information and perspective. Any offer made in good faith is a good offer, regardless of price.
Many people watch markets while others make them happen. If you are in the market you should choose to be a player and work the market to get the best deal you can given your current circumstances, those of the market and the other party.
As always, affirm your wants and needs and determine if an offered price allows you to achieve them, or if your expectations are realistic in today’s market. Work from a reality base, not fantasy.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. dpwtigers@hotmail.com
