Just because you over spent on your home, doesn't mean someone else will over pay to purchase it!

Well here is a not so new scenario. I don't know why it surprises me so often when I run across it every now and again.

Last week I took some buyers out to see some homes. They were fairly new to the area, and a pleasure to work with, and will continue to be so going forward. Since they were new to the area, I spent some time showing them various homes at various price points in various areas.

So after a dozen or so homes we found the right one, only it was north of the upper end of their stated price range. I showed it to them as it fit the location they desired, and it appeared to be over priced for the neighborhood. Well, after a second visit, they put in an offer.

In the interim we had discussed comps, and related ratios to come up with a bidding strategy. In the end I was given a fairly attractive opening offer. An offer that warranted a good look on its own. Later that day, I met with the listing agent, who was the homeowner as well. I laid out the comps setting up my offer nicely. Well my offer, which was very much in line with were other homes in the area had sold on a price per square foot basis, didn't grab too much attention as it was 20% below the asking price.

The listing agent/owner and I then discussed all the work they did to their home, again. Now I know what work they did and I used it to sell their home. I was then reminded that they would lose money on the sale of the home because of all the work they did to the home. All of the work was done in the last 12 months as the seller only recently passed their one year anniversary in the home. So I asked, since she was a agent in the real estate business, could she please give me some comps to justify her offering price? (Of course I new there weren't any.) Again I was reminded of the substantial work done on the home.

In the end, the offer was for $305 per square foot, very much in line with sold homes of late. It was offered at $385 per square foot, and they countered back at $369, adamant that that was a fair price. The buyer then balked, and walked away, not feeling the seller was being realistic. Normally I try to keep everyone moving until a price can be agreed upon or we get to a stalemate. But in this case it was like trying to push to continents together, and it is just too hard to bridge the ocean.

So I ask, why do sellers feel like they can make a new high water mark in sales prices in this market, with all of the competition out there for a qualified buyer, simply because they over spent on their home? In this case my buyers knew the comps cold, and knew just where fair value should be in this market. With the technology today, buyers know their math. I think homeowners should do the same prior to pouring piles of money into their homes and overspending. In today's market, I simply don't see buyers overspending on your home, simply because you did.