Grand Canyon separates buyers and sellers in Montgomery County, Maryland

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The Grand Canyon can separate buyer and seller expectations

January 31st, 2009 Categories: Buying, Selling

Two very different perspectives

Buyer: The market hasn’t been this bad in 50 years – everything is totally overpriced

Seller: My house is special. My house is unique. My house has a high value. I’m not giving it away.

Right now in Montgomery County, the gap between buyers and sellers can be like the Grand Canyon. Who’s on the right side? The answer is somewhere in the middle.

Good News for Buyers – Our Market is Relatively Strong

How can a strong market be good for buyers? The lower the price the better, right?

Once you make a purchase, you’re no longer a buyer, but a homeowner. Paying more for a home that holds its value better is definitely a good thing. Still, I see many buyers who are uneducated about Montgomery County real estate and are overwhelmingly pessimistic about our market. They make low purchase offers based only on the home’s asking price without regard to recent sales activity. This isn’t a good strategy to be successful. Here’s what buyers should do in today’s market:

Markets are very different in Montgomery County; some are much stronger than others. Really get educated on your areas of interest.
See homes in person. Checking out virtual tours on the internet isn’t enough. You need to see, touch and experience homes in person. Even though there are many homes on the market, there’s only a few great ones. Know the great ones when you see them.
Know the sales prices of homes you’ve seen. Don’t just rely on sites like Zillow that attempt to estimate home values through computer algorithms.
Take your time and find the right home that meets your needs.

As you become a true market expert, you’ll be confident when moving forward with a purchase offer. If the seller’s list price is too high, you’ll have data to support a lower offer. If it’s too low, you’ll be ready to act quick.

Attention Sellers – It’s not 2005

It’s easy for sellers to assign a ‘mental value’ to their home and make plans for the proceeds based on this value. When it comes time to sell, their mental value rarely reconciles with a realistic market value. Most sellers we meet are fair and level-headed so we can have a rational discussion about home pricing. For others, their mental value is set in concrete which can’t be changed with any amount of data. No one wants to give their home away, but setting a realistic list price is essential to a successful sale. Here are a few good guidelines for Montgomery County home sellers:

Know that buyers will compare your home to others on the market. Your perceived value or plans for proceeds have absolutely nothing to do with a buyer’s perception of your home’s value.
Your list price should be based on recent sales of comparable homes. “Comparable” is the key word. These are homes of similar size, age, style, condition and area.
Price your home relative to your competition. Buyers will see your home with other similar homes in the area. For declining markets, you need to price below the competition. In stable and appreciating neighborhoods, you can price comparable or higher than other homes. Know they dynamics in your market and price accordingly.
Appraisals aren’t a cake walk. So even if you receive a higher offer, your home must appraise for the sales price or you’re renegotiating a lower price.

Bridge the Gap

Buyers and sellers come together by being educated about our market and setting realistic expectations. A great place to start is to setup Montgomery County email alerts for homes in your area and price range. Contact us anytime for a detailed analysis for your areas of interest.

This entry was posted on Saturday, January 31st, 2009 at 6:57 pm and is filed under Buying, Selling. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Hilary Shantz said at February 1st, 2009 at 6:38 am
This is so well said, and so absolutely true, it is what I have been living out the last week in my negotiations, the Grand Canyon of expectations!
Bruce Lemieux said at February 1st, 2009 at 7:14 am
When both parties have such different views, it’s rare to get them together. Good luck – I know it ain’t easy.
Judy Peterson said at February 12th, 2009 at 1:52 pm
Very sound advice for buyers and sellers in this market. Some winning points to remind us of the importance of realistic expectations.
Carnival of Real Estate #127 visits Central America | Real estate investing in Panama, Costa Rica, Nicaragua and Belize said at March 13th, 2009 at 5:59 pm
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