April 29, 2008 – A Very Dead Mouse
The trap had caught the poor thing squarely across the head. The rest of the body was so unblemished, the mouse looked like it could be alive, except for the severely flattened skull, the result being that it was almost unrecognizable at all. I did have to look twice, but on the realization that I’m “it” and that noone would be back in the house save a potential buyer, I took up the charge to remove the offending rodent from the premesis.
Aaaahhhh! The things you do for love….or money. Here I am, at one of my listings, a very nice home, fully furnished, great views, all with a price tag approximately $100K over what it should be. I know it is overpriced, as do all of my collegues, whom by now have seen it and made the appropriate mental note (the kiss of death in this market). And while the owner has, on numerous occasions, been apprised of the fact that his home is too expensive, he is as yet unwilling to make any sort of “downward adjustment”.
“Consensus is that the home should be priced at about $900K.” I say, feeling apologetic, resigned and decidedly “flappable”.
Mr. Seller replies, sounding confident, cool and UN-flappable. ”Look, if someone likes the house, they’ll make an offer. I just can’t help feeling everyone’s playing games over there.”
Playing games?! Is he serious?! I think to myself. Wow, wouldn’t it be great if this was just a game and we could all call it a day and go home.
“As you wish. I will continue to market the home to the utmost of my ability. I’ll keep you posted.” I say and sign off.
He thinks this is a game. Wow. Every week, I hear a story about someone else going bankrupt as a result of our “market slowdown”. Big, established developers are giving fancy houses back to the bank, little-guy contractors are bidding jobs tens of thousands of dollars below cost just to “keep the wheels moving”, and real estate brokers are getting second jobs at Costco.
Sub-prime lending, looming recessions, and all other factors aside, one of the big culprits in our declining housing market is “SELLER OVERCONFIDENCE”. Mr. Seller has decided to go to market with his home yet, while he has heard all of the news about the market being “soft”, it hasn’t clicked that it means its “soft” for everyone, including him. He wants to market his home at a top-of-the-market price, even though that’s a ship that sailed two years ago. In fact, with things as uncertain as they are, many brokers tell clients to go to market at a price reflecting any further decrease the market may have in, say, 90 days.
Buyers today are shrewd at best and mercenary at worst, but they all know that they can afford to be picky. Some go so far as to pre-qualify most initial showings as I’ve detailed in previous entries. They have lots of inventory to choose from, including that of builders and developers who are undercutting the market by hundreds of thousands of dollars just to get out from under expired construction loans.
And now, Mr. Seller has created a stand-off between his unrealistic expectations and a buying public that feels taken advantage of. And I, like our poor little rodent friend, am stuck in the middle and will meet a similar fate because as sure as sure, at the end of our contract if not before, Mr. Seller will become frustrated with my efforts (or lack thereof in his mind) and list his home with Mrs. Busy-Broker…..for $100K less.
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