Reality Ranchette By: Paul Pastore
A house is only worth what a buyer is willing to pay, regardless of the seller's inflated expectation. The seller's role is to make any decisions, not tell the agent what to do, and what the property is worth.
Recently, I went on a listing appointment. The executor of the estate was a family friend. His mother had passed away and left a house on 5 acres. There were three separate parcel of land that could be split. The recent estate appraisal was around $600,000. The seller felt the property was worth 1.8 million!
The property was built in 1961 and had functional obsolescence. The seller felt it was "one of a kind". The property was on a dirt road. The seller felt "it was in the best part of town". The property had some views. The seller felt it was "comparable to a mountaintop lot that recently sold". The kitchen was dated. The seller felt it would give the buyer the opportunity to expand the house. The lot had horse privileges but no equestrian set-up. The seller felt the buyer could easily blade the sloping lot. There was a shingle roof. Most newer properties in the area had tile roofs. The seller felt all roofs were the same.
A family friend told the seller what he wanted to hear. A local 'hungry' Realtor confirmed the rumor. A banker told his client it was worth 1.5 million without supplying any 'comps'. A part-time, out of the area, real estate relative concurred with the banker's speculative assumption. And, a doctor told the seller if the property didn't sell at 1.8 million, he should increase the price! Welcome to realty ranchette.
Most people feel they are younger than their age. Many people feel they weigh less than their bathroom scale would indicate if they ever hopped on board. Why get a physical when you feel fine? It seems everybody is an expert on raising kids and rputting a price tag on their "reality ranchette".
Laarni's Take: I just had this type of clients last summer. I wanted to list the property at $475,000 but they wanted $550,000. Although I was armed with my currents sales and listings in the area, they insisted on their price. As a compromise, I agreed to list it at that price for 2 weeks and then lower it if there is no activity. I also asked them to clean the house and get rid of the clutter which they did. First open house, bammm, I got an offer for 450k and was so excited because that was my target price. They rejected it outright. I was flabbergasted! I can still hear her " If it is not closed to 550k, we do not want to see it". They only owed 160k and they bought the house for just 145k. I will admit that I lost my power of persuasion on them. The things I've learned from Zig Ziegler and Mike Ferry did not WORK! Furthermore, the cleaning part deteriorated. I did my best because that was my fiduciary duty to them but when they were asking me to renew my contract, I graciously turned it down. It was a waste of time for the both of Us. In today's market, they will be lucky to get 375k on their "ranchette".
A house is only worth what a buyer is willing to pay, regardless of the seller's inflated expectation. The seller's role is to make any decisions, not tell the agent what to do, and what the property is worth.
Recently, I went on a listing appointment. The executor of the estate was a family friend. His mother had passed away and left a house on 5 acres. There were three separate parcel of land that could be split. The recent estate appraisal was around $600,000. The seller felt the property was worth 1.8 million!
The property was built in 1961 and had functional obsolescence. The seller felt it was "one of a kind". The property was on a dirt road. The seller felt "it was in the best part of town". The property had some views. The seller felt it was "comparable to a mountaintop lot that recently sold". The kitchen was dated. The seller felt it would give the buyer the opportunity to expand the house. The lot had horse privileges but no equestrian set-up. The seller felt the buyer could easily blade the sloping lot. There was a shingle roof. Most newer properties in the area had tile roofs. The seller felt all roofs were the same.
A family friend told the seller what he wanted to hear. A local 'hungry' Realtor confirmed the rumor. A banker told his client it was worth 1.5 million without supplying any 'comps'. A part-time, out of the area, real estate relative concurred with the banker's speculative assumption. And, a doctor told the seller if the property didn't sell at 1.8 million, he should increase the price! Welcome to realty ranchette.
Most people feel they are younger than their age. Many people feel they weigh less than their bathroom scale would indicate if they ever hopped on board. Why get a physical when you feel fine? It seems everybody is an expert on raising kids and rputting a price tag on their "reality ranchette".
Laarni's Take: I just had this type of clients last summer. I wanted to list the property at $475,000 but they wanted $550,000. Although I was armed with my currents sales and listings in the area, they insisted on their price. As a compromise, I agreed to list it at that price for 2 weeks and then lower it if there is no activity. I also asked them to clean the house and get rid of the clutter which they did. First open house, bammm, I got an offer for 450k and was so excited because that was my target price. They rejected it outright. I was flabbergasted! I can still hear her " If it is not closed to 550k, we do not want to see it". They only owed 160k and they bought the house for just 145k. I will admit that I lost my power of persuasion on them. The things I've learned from Zig Ziegler and Mike Ferry did not WORK! Furthermore, the cleaning part deteriorated. I did my best because that was my fiduciary duty to them but when they were asking me to renew my contract, I graciously turned it down. It was a waste of time for the both of Us. In today's market, they will be lucky to get 375k on their "ranchette".
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