Mood of the Market
Mood of the Market
I love Tim Burton films. That a single director's filmography includes "Beetlejuice," "Edward Scissorhands," "The Nightmare Before Christmas" and the disturbingly delightful-looking "Alice in Wonderland" is absolutely amazing.
I crave to know what it looks like on the inside of Tim Burton's head. If what comes out of there is any indication, I suspect he lives in a totally different reality than the rest of us -- one of swirly, brilliantly colored gorgeous/grotesque beings that are certainly not of this planet -- among plants, buildings and even machines and buildings, that bear only a whiff of a resemblance to the material of the world in which you and I live.
While Tim Burton's creative genius might be unparalleled in the world of film, in the business of real estate he certainly has challengers for Best Resident of a Fantasy World: sellers.
Yep, sellers are Tim Burton.
Lest you think I've gone madder than Johnny Depp's Mad Hatter, allow me to explain. Some sellers resemble Tim Burton in one key respect: fantasy. They live in a magical fantasy world where anything is possible (like, their home appraising at 40 percent more than the identical home next door that sold 10 minutes ago).
It's a world populated by mythical creatures, like the well-qualified cash buyer who finds the cat pee stains on your hardwood floors to be a charming touch reflecting your love of animals, and is willing to pay you tens of thousands of dollars more than any comparable home in the area just to help fund the downpayment on the seller's next home.
I work with more buyers than sellers, so sellers' fantastical thinking is more apparent from the other side of the home-viewing-and-negotiating table where I sit. But buyers can be Burtonesque, too.
When they think, because they've heard it's a "buyer's market," that sellers will be greeting them at the doorway with offers of foot-washing and orchid leis, offering to sell them their homes for less than they (seller) paid and less than they (seller) owe, buyers are dwelling in Tim Burton-style fantasy.
When they totally ignore the recent comparables and sales data documenting what a home is worth, and make wildly lowball offers -- and expect a seller to take them? When they think that they have weeks to sit and get really comfortable with the idea of making an offer on the "perfect home at the perfect price," when comparables sell in a day or two? That is buyer Burton-ism at its best. I mean, worst.
Now, it's one thing to know what you can afford or want to pay and be firm, knowing that you may or may not get the property, and being totally comfortable taking that risk. But, to be righteously indignant that investor sellers should want to make a profit by selling a home at a well-supported fair market value, because you "don't like" the idea that they bought it so low (before investing thousands adding the touches you love, but could never afford to add)?
To be totally outraged and angry at your home's listing agent because the too-high price you set against their advice, combined with the too-cluttered and too-dated appearance of your home (also against the agent's advice), is getting no offers and bad buyer feedback?
While the Tim Burton analogy frames this conversation with a humorous, lighthearted cast, let's get serious here. These real estate fantasy lands are dangerous. For Tim Burton, fantasy pays -- in fact, it's his stock in trade.
For buyers and sellers in the real estate market, on the other hand, fantasy costs. It can cost you tens of thousands of dollars. It can cost you your dream home. It can certainly cost you your sanity and peace of mind in terms of creating regrets you deal with for many moons after your transaction is over.
The conventional wisdom among brokers and agents (which has been proven many times over) is that a property priced correctly out of the gate can generate multiple offers in almost any market climate.
Homes listed too high simply sit on the market, and while one price reduction strikes most buyers as an indication that a seller is willing to deal, obviously overpriced homes that fail to course-correct and lag on the market unsold cause buyers to speculate that something might be wrong with the home and/or the seller.
There is virtually no agent among my colleagues who hasn't experienced or witnessed a perfectly saleable home that ends up sold below its fair market value because it was overpriced for overlong. Attention sellers: Fantasy costs.
What's Your Home Worth?