MY RANT CONTINUES...

How likely are you, as a consumer, going to spend more money for a product than it's worth on the open market? Unless it's the last one of it's kind to be found, not much in life is going to be sold for more than it's truly worth at the time. And in real estate, value is based on an appraisal, which is an historical prospective of similar home sales over a prescribed time frame. The appraisal doesn't depend upon what the seller originally paid for the property, how much money the seller has spent upgrading or maintaining the property, nor how much that seller needs or wants to net upon sale.


What makes some sellers think a buyer will pay more than the appraised price for a home? But they do. No matter how intelligent and informed they are, some sellers still think their home is so special that it just has to be valued at much more than others in the neighborhood.


The price of homes has dropped significantly over the last couple of years and appears to have leveled off now. Prices leveled. They didn't rise. They won't rise significantly for months and years to come.


Expectations of both buyers and sellers are just wildly different from the reality of this economy. Sellers who have been waiting out the housing market crash now seem to have amnesia when it comes to the realities of this housing market and their chance of selling at a higher price than in months or years past. And buyers are still bargain hunting and often terribly unrealistic because they think they can further discount list prices by 25% or more.


The market is a mess, with foreclosures and short sales in the mix and being used as the majority of the comparables for appraisals. It can't be helped because the short sales and foreclosures make up the majority of the homes being sold now. They are sold at what amounts to current fair market value for each one. Some look like better deals than others on paper and on the crazy websites that claim to give you an appraised price of all properties in the area. How in heck can they purport to know the real value of homes without knowing nuances of the neighborhoods or the property conditions?


They just serve to further confuse both buyers and sellers. And us, real estate professionals. What are we to do? Listing a property at well over the true value isn't legitimate. That inflates expectations and is just a downright lie told to the sellers to get the listing. Being too emotionally attached to a property and unprepared to take a beating on price now really means that the property shouldn't be on listed for sale in the first place. But there will always be an agent willing to list a home, land or condo at a significantly inflated price because they need to get their name on a sign and on the internet.


Don't mistake the person with the highest number of listings or the highest listing prices to be the highest quality agent. Agents inflating prices get a reputation among their peers and their tactics backfire. When I show one of their listings I'm more cautious than usual and make certain to tell the buyer prospects about the exagerated list price as a buffer to protect them and myself. While the listing agent is lying to the seller, the selling or buying agent would be lying to the buyer by not providing very accurate information of sales in that specific neighborhood.

No one wins here, except perhaps the listing agent who captures an audience through ads and gains clients for other properties, just not for that specific overpriced one.