Some of my peers asked me to write an article about buyer and seller expectations. I believe this topic has substance and merit, so here it is.
As the winter season approaches, buyer and seller expectations run high. Buyers want to buy for the lowest price possible, and sellers want to sell for the highest price possible. The fact of the matter is that the real estate market is what it is. To believe that a three-bedroom, two-bath home with a pool can be purchased for $50,000 is absurd. To believe that a 1,200 square foot, 30-year old house with limited water frontage will sell for $600,000 is another case of fantasyland.
At the moment, I can think of no other profession on earth that experiences such unrealistic expectations from consumers. Why is it that buyers and sellers alike have this notion that real estate agents aren't telling them the truth about the value of real estate, or believe the agents are leaving money on the table? Moreover, are consumers so informed by data from the Internet that they believe they know the market better than the agents that have been in this business for several years?
What's truly amazing is that real estate is a product like any other. It is a limited resource in that its price is determined by the principles of supply and demand. When a consumer walks into an electronics store and compares one wide-screen television to another, they make an educated decision to buy based on the television's benefits and features. Real estate is no different. Yet, the consumer doesn't have the luxury of offering half the retail or sale price on a television. The price is what it is, and there is typically a balance of supply and demand. You pay the price, or you don't purchase it.
However, when buying real estate, some consumers throw those basic principles out the window when they believe they can buy a perfectly priced $200,000 house for $100,000.
The same lofty ideals apply to some sellers of real property. They believe their home is the best in the county, and therefore also believe they can sell it for some ridiculous price that the market just cannot support. No matter how much time you take to explain comparison shopping, and how buyers weigh the benefits and features with competing homes, some sellers always believe their home will sell for more than then the agent is telling them no matter how compelling the facts are. We don't fabricate the numbers. Selling prices are a matter of public record, and recommending a fair asking price based on recent sales is part of the listing process.
Real estate is the only area of consumerism where buyers and sellers believe they are as much experts as the agents themselves. Would these same consumers go to a court of law and represent themselves - or better yet, perform their own appendectomy? It's not likely. It is incomprehensible that consumers trust lawyers, doctors, and financial planners, yet when it comes to one of the most expensive assets they will eventually buy or sell, there seems to be a lack of commitment and trust.
This brings me to the famous line by Jack Nicholson in "A Few Good Men." "You want the truth you can't handle the truth."
Mario D'Artagnan is a broker associate with Miloff Aubuchon Realty Group, Inc. Mario is a former investigator for the Florida Real Estate Commission. He is also a former real estate instructor. Mr. D'Artagnan is a published author and has been a keynote speaker on the subject of agency law. Mario is also a veteran of the U.S. Air Force. For questions or comments contact Mr. D'Artagnan at: firstname.lastname@example.org or call 239-565-4445.