These past several days were spent with buyers and sellers in negotiations of their respective real estate transactions. I will never fully understand how buyers and sellers believe they know exactly what a home is worth. The appraisal process is not an exact science. Even in new construction, there is a price per square footage amount that is normally used to establish a hard cost of the build-out. In years when the market has swung either up or down, we have found even the hard costs being severely discounted due to adverse market conditions.
I’ve had sellers who were determined that I didn’t know what I was talking about when attempting to establish fair market value. Months and sometimes years later they were proven wrong. On the flip side, I’ve had buyers who were so blinded by their belief that they were going to purchase a property at a deep discount that they simply walked away during negotiations. With that mindset, they actually missed out on purchasing homes that would have worked for them far better than what they found themselves purchasing at a “deep discount”. I’ve heard some of them admit years later their mistakes. It becomes even more uncomfortable when family members start calling me and attempting to convince me otherwise.
Yes, everyone wants the best for their families, but sometimes their skewed perceptions of the real estate market will create missed opportunities. I received a phone call from an agent several weeks ago informing me that I needed to counsel my sellers better so they will understand that her offer was a good offer. I was a gentleman and simply replied, “Remember, the sellers are always in the driver’s seat.” I took that comment with the grain of salt since that agent was working to get her buyer that home at the lowest possible price. I was happy to find these past two days productive as both of the homes I was working at bringing buyers and sellers together managed to become a reality.
No matter what anyone says, what creates current market value is what a ready, willing and able buyer is willing to pay and what a ready willing, and able seller is willing to take. These people are the real market makers.