Jim Valentine on Real Estate
Buyers and sellers look at a lot of things when contemplating buying and selling. One of the biggest is the value to be paid or received. Time is also an important component along with many other things. Pricing is usually made by comparing to other properties of similar size and amenities and the price they sold, or are being offered, for. If you’ve a tight pattern then likely you have a good comparison property, comp, but once in a while there is an anomaly.
One of the most important things to understand in pricing or timing is the motivation of the other party. If a buyer needs to move within two months then his motivation is time. If a seller needs to move in two months’ time is also a factor, but the price goes in the opposite direction. In the first instance the buyer would likely pay more for the convenience of moving within his schedule whereas the seller that needs to move in two months needs to entice a buyer with price to get the job done within his time parameter.
Timing is one of the most critical motivators of buyers and sellers. If a seller is behind on their payments and a notice of default has been filed, they must get sold in a timely manner or they could lose their equity. Unfortunately, one of the realities of that situation is that money is very critical to that seller because of its scarcity in their lives. As such, they often work to maximize every dollar pushing things out until they are crushed by the time and must make radical adjustments. If you are in a tight spot, work with your agent to understand what you can realistically get in a reasonable time. Don’t panic, make a plan and work it.
Buyers’ motivation for buying a particular property can vary. Location is the most common factor, but location can be more than the proximity to schools and shopping. If the home is near a family member or friend there is a greater desire to buy that home versus one that is a half a mile distant. Some want to be where they can walk to church, or the nearby sports bar. We’ve seen all of these factors come in to play during a buying decision.
The use of the property can certainly motivate a buyer. Horse properties speak for themselves, people need room for their hobby and that doesn’t require a 10-car garage, rather stalls and maybe a barn. The car folks, on the other hand, will be motivated by the extra-large garage or shop that enables them to have collectibles, projects, etc. For people motivated by such personal interest features the home often becomes secondary. The location can be important, is it near a public lands riding area, or on a dirt road, etc.
Sometimes people are motivated by uncommon ideas. We prevailed over serious competition negotiating on a pricey ranch one time because we wrote in a six-month escrow. The other, stronger buyers, wrote a short escrow all cash. Another success story saw our buyer able to beat out the competition by offering to name the subdivision that he was going to develop on the parcel using the Sellers’ family name. These Sellers were motivated by things other than the price. What does your Seller want?
Motivation is often taken for granted without a lot of thought. Don’t assume that you know what a seller is thinking without doing some probing. Interestingly enough, many sellers don’t really understand their situation, whether on purpose or by utilizing the ostrich technique of assessing their life, in which case the buyer will just get frustrated by knowing how he can help them only to have his offers rejected. Knowing motivation, or what motivation should be, doesn’t always make it so.
Motivation is the underlying key to real estate. Get yours figured out, work on figuring out that of the other side, and you’ll have an easier time realizing your wants and needs in a transaction.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, License No. BS-03481, RE/MAX Gold Carson Valley 775-781-3704. dpwtigers@hotmail.com.