Real Estate: The Myth of the 'Number' and 'Overpaying'

Buying or selling a home is not rocket science.

I mean, how hard can it be?

Buyers have a pretty good inventory to choose from, at least in San Clemente.

Sellers have a relatively robust market to sell into–escrows are closing at a decent pace.

In other words, the free market is working just fine.

Both parties have competent guidance easily available to them, such as real estate agents, escrow people, loan officers, home inspectors and other professionals. Even “short sellers” get to have attorneys at no charge to them.

So why is it that most prospective buyers fail to buy even after six months of looking, and most prospective sellers fail to sell within that same time period?

They're only hurting themselves.

Many buyers think they know what they want, but they really haven’t made up their minds.  They say they want four bedrooms close to good schools, but then find themselves falling in love with smaller homes with ocean views.  Agents have a saying for this: “Buyers are liars.”

But buyers aren’t really liars–they just often fail to really commit to solving their housing needs. Everyone would like a better home to live in, but very few make a solid commitment to do anything about it. The result: Lookie Loos.

And, rather than recognize the real reason why they fail to buy, many buyers blame the “high” prices of listed homes. They’re not about to “overpay”–even for that near-perfect home.

Most sellers, on the other hand, say they want to sell, but have a very difficult time visualizing their home as just another home in a large marketplace–as a commodity, so to speak. They fell in love with their home long ago, and don’t understand why anyone wouldn’t love it today.

Many sellers engage in wishful thinking that produces a “number” in their head.  They need to get that price, or net that amount, period. This number usually has nothing to do with the real market, but has more to do with what their home originally cost, or how much they owe, or how much they need for a down payment on their next house, or their estate planning goals, etc.

In short, sellers often refuse to look at their home from the prospective buyer’s point of view, which is the market’s point of view.

Well, the market is the market.  And both buyers and sellers would do well to recognize that fact, if they really want to buy or sell.

The real estate market is not hard to figure out.

Buyers do a pretty good job looking at the inventory, and market prices become apparent after reviewing a few recent sales and spending an afternoon looking at comparable listings.

If you need financing to buy a home, it would be difficult to overpay for a home these days, even if you wanted to. Believe me, lenders and their appraisers work hard to assure that you don’t overpay.

Sellers should do themselves a big favor and spend an afternoon touring their neighborhood competition. The market will become apparent to them too. But most sellers will not agree to look at the competition from a buyer’s point of view. They don’t want the facts of the market interfering with that number in their head.

For more of the latest market news and statistics on San Clemente real estate, visit my blog at MCotter.com