At least that has to be what a few sellers in Northern Virginia are thinking these days. Very few appraisals today in our area don't face the dreaded "declining market" flag when the appraiser arrives at the property to determine the value. So when buyers find a home that they like and which is clearly overpriced how do they get the seller to understand?
It happened this week with one of my buyers. The property was everything they had hoped to find but the list price was well above any comps that we found. We first made an offer that was rejected and then we tried a different approach. With the sellers permission we hired an appraiser to go to the property and do their magic. It was money well spent and something that I have suggested in other posts that seller should do.
In this case the appraisal came in, as we expected it would, $75,000 BELOW the listing price. The appraiser didn't have a contract in hand to give them any idea of what we had offered. All they had was the MLS listing to know what the current price was. The appraisal actually came in slightly above our offer price. Slightly above being $5000! Talk about pegging the neighborhood.
So what did the sellers do with this new found information? They still rejected our offer!
Of course I had to ask why and the answer didn't surprise me.
And so with that we moved on to another home. We wish the seller and their agent success in finding a buyer who is willing to pay the price for their home. It is a beautiful property but this is not the market where either the buyer or the lender will close a deal on an overpriced home.
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Great post. The sellers are in total denial in this market. Who is going to come by with the cash in a suitcase to buy your home? I watch the Northern Virginia market daily, and I have a VA broker license...it is a very interesting market, the solds tell the entire story. For the most part listing prices are holding, but sales prices are giving way to new lower levels, and the numbers of sales are still dropping. Prince WIlliam Country seems to be the only one that is starting to move upwards in sales, because they also had some of the largest drops in prices. That tells me buyers are still very skeptical of price, and value. You were right to move on. Buyers and sellers need to be less emotional, and more rational in their judgment.
Terrific post, Cindy. I recently had buyers write an offer on a home that we know is $30k overpriced. We submitted comps along with the offer to justify the offer price. The sellers countered by coming down $2,000, saying that they had just come on the market and weren't ready to negotiate. Now, these are folks that are being relocated within the next 6 weeks - how can they not be ready to negotiate? We'll just sit back and watch and wait and hopefully scoop it up later for a reasonable price.
Jim-I know you keep up with our local market and are on target with the "hot" market being PW County. Just lost a multiple offer deal on a foreclosure, go figure and still have two additional contracts pending on multiple offer properties. Meanwhile the overpriced listings are still sitting. If someone has a suitcase full of cash I would expect the law to be right behind them :-)
Lisa-not ready to negotiate must be nice to be in that position. I personally made an offer on a property last year and then watched it go down and down for 10 months. It eventually sold for less than I had offered. If your clients can wait it out then they may be in luck. Hope so!
Cindy, great post! Don't the sellers always think their home is special? Of course they do! I remember before I was a Realtor, and went to list my home, just how blind I was to reality. Good job! ;-)
Teri-But my brass faucets are only 20 years old. Any buyer would be thrilled to have them and the are still worth the $4.99 I paid for them then. I was the same way myself and thought my agent was crazy to make me paint the inside of my pantry but now I get it BIG TIME!
CINDY - What they should have done was put their home on Zillow with their pie-in-the-sky "make me move" price. At least people wouldn't be wasting time viewing this home then, and agents wouldn't be wasting time either. The listing agent is doing a terrible disservice to the homeowner, and to him/herself, because this home is NEVER going to sell. Even if the market starts to catch up with this price (which will take a long time), the home will be so stale on the market that it will be seen as a problem home.
Cindy, this is an ablsolutely brilliant title for this post!
Reading about properties overpriced by $50,000 and $30,000 makes me feel better about the one my clients want, which is 'only' about $10,000 overpriced. I'm waiting to hear what they have to say!