Throwing a Bone To the Seller

Can There Be Too Much Knowledge?

I have received several offers for a condo-hotel unit in Plaza Resort & Spa. This is the largest studio floor plan, priced reasonably at $103,500. Next comparable unit in the resort of similar set up and size is $159,000.

It would be easy to assume that I have the price wrong, based on the consistent uniformity of the offers, but I would stubbornly say “nay”. Why? Because I know… Because I work with investors, and run into it often enough…

With rare exception the offers are $62K and $67K. Interestingly, at the same time I have received offers on a smaller unit there for more money.

Anyway, when I get offers like this, I immediately look at who represents the buyer and I put them on my “bad” shelf. These for me are agents who do not deserve be taken seriously.

So, why is it happening?

It is too much knowledge. The agents check the county Property Appraiser site and see that the Seller has bought it recently at the auction and paid only $42K.

And instead of basing their advise to the Buyer based on today’s market, my fellow smart agents give their suggestion of the price based on what they think is fair to give to my Seller, knowing that he bought it recently for $42K. Some of them think that it is enough to give him $20K, and some think that $25K is OK. Hence the offers for $62K and $67K.

They are not in the “buying” mood when they do it, but in the “throwing a bone” to the Seller mood. Now they are thinking of how much profit is fair for the Seller instead of thinking what would be a fair price based on the market values.

These agents somehow are in the wrong business. They need to join our present Administration, which knows how much people should be making and what is fair.

Why not go to basics, and look at the market, evaluate it, and then advise your customers what the market value is, and avoid looking stupid, when there is no counter on a ridiculous offer. I would die to see how they would explain that they advised on a "smart" price, and the results are... no results...

Is it that too much knowledge is too much?

Can you outsmart yourself?

You bet…

Should you?

* Photo by Elsie esq. via Flickr.com