Author Topic: I am really sick of seller listing properties at unrealistic prices  (Read 7570 times)

chesebert

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What's with sellers trying to pawn off properties they acquired during the bubble at the same or higher than price the price they bought at? I made an offer to a seller on a unit in a high rise for the same price as another recently sold unit with the same floor plan but 1 floor higher thinking that must be a fair price. Seller said no, then I look at when he/she bought the property and long behold property was purchased during the bubble for quite a bit more than what he/she is asking now. So in seller's mind I am already getting a "deal" at the asking price...

What's with this mentality. Did I mention the property has been on the market for 200+ days?

I see crap like this all over my searches and it frustrates me to no end.

This is in Chicago. What are other major cities like? 

Left

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #1 on: September 27, 2015, 11:18:38 PM »
if the owner is in no hirry to sell, why cant she price it like she wants? not much different than companies deciding what they want to pay people to get the type of people they want.

Argyle

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #2 on: September 27, 2015, 11:23:22 PM »
Sounds pretty clear why it's been on the market for 200+ days.

chesebert

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #3 on: September 27, 2015, 11:35:19 PM »
if the owner is in no hirry to sell, why cant she price it like she wants? not much different than companies deciding what they want to pay people to get the type of people they want.

Sure, I understand one particular seller may be irrational and price his/her property higher than comps but what's with this massive irrational pricing I am seeing in the market.

Did I mention some of these properties have been sitting empty for hundreds of days on the market and the costs for HOA and taxes alone often run into 20k+ per year.

Is Chicago experiencing a bubble right now? No, right, given there were comparable properties being sold at fair market value. But those bought at the height of the bubble appear to believe otherwise. I am guessing the reason these people are not willing to comprise on pricing is exactly the same reason why they bought at the top - greed and stupidity.



« Last Edit: September 27, 2015, 11:37:18 PM by chesebert »

Another Reader

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #4 on: September 28, 2015, 04:11:19 AM »
Motivated sellers are a subset of all sellers.  Don't waste your time with "recreational" sellers, the folks that list their properties with the idea that they will sell if they get their price.

chesebert

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #5 on: September 28, 2015, 04:45:03 AM »
That's a great term - "recreational seller" I have never thought those as such. I will keep my eyes open from now on to avoid dealing with these non-selling sellers :)

Motivated sellers are a subset of all sellers.  Don't waste your time with "recreational" sellers, the folks that list their properties with the idea that they will sell if they get their price.

NoNonsenseLandlord

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #6 on: September 28, 2015, 06:55:28 AM »
Do not buy it then.  Far too many RE investors are jumping at prices just to get to be a landlord.  it's not with it, if you are not making a bunch of money.

chesebert

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #7 on: September 28, 2015, 07:15:00 AM »
Right, except I'm not wearing my RE investor hat for this one. I'm buying my first primary residence. I have 2 investment properties, but this will be my first place. I guess I'm more willing to compromise on the price on my own place...but some sellers are really pissing me off with their non-selling seller attitude. 

Do not buy it then.  Far too many RE investors are jumping at prices just to get to be a landlord.  it's not with it, if you are not making a bunch of money.

robbyho

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #8 on: September 28, 2015, 08:57:31 AM »
Keep in mind that these people aren't business people. They are for the most part average 9-5ers who own a property and they are probably underwater. Realtors will take on listings and list at the price the clients wants, which for these overpriced properties  is probably their break even or even small profit point. Why list it at fair market value when fair market value is a loss to you? List for higher and see what happens. Worst case you take a lower offer at a loss or take a short sale. I wouldn't do it, you wouldn't do it, but from their perspective it doesn't hurt. The realtor will take on any listing because they'll get buyers from it and they might get a sale. The costs to list it are negligible for both parties. Just ignore them. That's why when you sell you have to price them right, otherwise people won't even go see it.

Kaspian

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #9 on: September 28, 2015, 09:57:59 AM »
Because loss avoidance is a stronger emotion than gains, that's why.  Casinos figured that out years ago.  It's not so much the prospect of winning that keeps them in business, it's people trying to make back what's already gone.  Some idiots in my city still try and sell their used 27" tube TVs on Kijiji for $100+ because they paid $500 for it 15 years ago.  It's emotion.  ...They missed the chance to sell at a decent price a long, long time ago and that money ain't never coming back. (But they're still hanging on.)

Ever been to a garage sale and somebody wants $20 for an item that there's no way in hell they'd ever pay $20 for?  Yeah, the item is special because they owned it? It somehow automatically inflates the value in their head.

cripzychiken

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #10 on: September 28, 2015, 10:22:27 AM »
Ever been to a garage sale and somebody wants $20 for an item that there's no way in hell they'd ever pay $20 for?  Yeah, the item is special because they owned it? It somehow automatically inflates the value in their head.

This weekend I saw the opposite happen - Buyer asked the price of some random widget - Seller said $5 (a fair price for the widget).  Buyer was offended b/c she bought something similar a few years ago and paid $15 for it.  I honestly started chuckling at that exchange.  Buyer was mad that the seller was going cheaper than she paid and told the Seller she didn't know how to run her garage sale - she must be losing money on this stuff.


alicet

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #11 on: September 28, 2015, 11:35:45 AM »
Its always safe to seek professional advice when selling home. You don't have to worry about a thing regarding pricing and other stuff.

Mr. Green

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #12 on: September 28, 2015, 12:32:11 PM »
Buyer was mad that the seller was going cheaper than she paid and told the Seller she didn't know how to run her garage sale - she must be losing money on this stuff.
That's a classic. Sounds like the buyer needs to read "How I Found Freedom In An Unfree World" by Harry Browne.

LiveLean

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #13 on: September 29, 2015, 01:52:30 PM »
It's in every market and every sector of the real estate business. There's the vacant land where weeds and brush have grown over the for sale signs, the beach rental properties that have been for sale for eight years, etc. Finding value is never easy.

I'm a red panda

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #14 on: September 29, 2015, 02:25:07 PM »
Right, except I'm not wearing my RE investor hat for this one. I'm buying my first primary residence. I have 2 investment properties, but this will be my first place. I guess I'm more willing to compromise on the price on my own place...but some sellers are really pissing me off with their non-selling seller attitude. 


Offer what you want to pay. It's up to them to accept it or not. You aren't entitled to buy their property for a low price any more than they are entitled to sell it for a high one.

If they aren't in a hurry to sell, they SHOULD list it for the price they want to get for it. Just as long as they have no problem hanging out and holding it in the meantime.  Maybe it doesn't matter to them it has been listed for 200+ days... maybe someday the right buyer will come along. You clearly aren't the right buyer for them, no matter how much you like the property at a lower price.

zephyr911

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #15 on: September 29, 2015, 08:08:42 PM »
It happens everywhere. I don't even live in a HCOL town, but our higher-end areas did fall off some after the bubble, and some of the sellers are uninterested in reality.

It's annoying, but there's not much you can do. Move on to one with a slightly less delusional seller.

MayDay

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #16 on: September 30, 2015, 11:50:12 AM »
We had one that made me really mad (I clearly took it way too personally!).  It was a perfect house for us, cheap but still about 15K overpriced, especially considering it needed a new roof, stat.  They wouldn't budge on price, and we stupidly ended up buying a larger more expensive house that was a good deal (for what it was.  But what it was, was not what we really wanted!).

Anyway, about a month after we bought a different house, something must have changed in the seller's circumstances, because suddenly it was listed with a different agent for 15K less, and sold promptly.  Oh that makes me so mad!  I wanted that house, dang it!  (For reference we had already hunted patiently for a year and finally decided we were the unreasonable ones..... oops). 

Kaspian

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #17 on: September 30, 2015, 12:18:55 PM »
...something must have changed in the seller's circumstances, because suddenly it was listed with a different agent for 15K less, and sold promptly.

They finally got a reality check?  After a few months of no offers at all over what you were willing to give they regretted not selling?

Shane

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #18 on: September 30, 2015, 12:37:33 PM »
What's with sellers trying to pawn off properties they acquired during the bubble at the same or higher than price the price they bought at? I made an offer to a seller on a unit in a high rise for the same price as another recently sold unit with the same floor plan but 1 floor higher thinking that must be a fair price. Seller said no, then I look at when he/she bought the property and long behold property was purchased during the bubble for quite a bit more than what he/she is asking now. So in seller's mind I am already getting a "deal" at the asking price...

What's with this mentality. Did I mention the property has been on the market for 200+ days?

I see crap like this all over my searches and it frustrates me to no end.

This is in Chicago. What are other major cities like?

Sunk cost fallacy? We see the same thing in our area as well. It's not just Chicago.

Drifterrider

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #19 on: October 05, 2015, 05:15:24 AM »
What's with sellers trying to pawn off properties they acquired during the bubble at the same or higher than price the price they bought at? This is in Chicago. What are other major cities like?

Isn't American great?  I get to ask whatever I want for my property (free market).  You get to accept, decline or bargain (free choice).  You are under no obligation to buy and I'm under no obligation to sell. 

Let's hope we keep it that way.

BlueHouse

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #20 on: October 05, 2015, 06:29:34 AM »
If they're underwater, they may not be able to afford to sell it for less. They may not have the cash to pay off the bank the difference between a lower sales price and what they owe on the mortgage. Therefor, it is your responsibility to make up the difference and pay the higher price. Ha, JK.

In DC, we see the opposite problem. People list their homes under market value and then a bidding war ensues. I don't really understand this philosophy and why it is advantageous other than it gets people excited about opportunity and gets them to pay more than they would otherwise. But it must also turn off a significant number of buyers as well? 

justajane

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #21 on: October 05, 2015, 06:57:08 AM »
My neighbor is about to list her home for about 10K more than the realtor told her to list it at. I'm not sure what her reasoning is, other than that they are financially struggling and she wants more. She also is attached to the house and probably sees things as assets that would drive up the cost, like a nice backyard. The reality is that buyers usually don't pay for those things. They might like them, but they aren't going to pay demonstrably more for them.

What about a new roof? They are getting a free one from insurance.  Since this is a "starter home" of sorts, I could see how this would definitely sweeten the deal.

I also think people don't understand how mortgages work and overall are ignorant financially. Originally she thought she could just price the home as high as she wanted. I explained to her that, unless the house is a cash sale, the mortgage would likely fall through for the buyer, since the house wouldn't appraise for the agreed upon amount. So, yeah, you might find a buyer who was swayed by your higher price, but the bank won't cooperate.

Bearded Man

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #22 on: October 09, 2015, 11:48:53 AM »
Best strategy is to list below market and let competing bids drive up the price. Pricing too high will just hurt the price in the end as it sits on the market for months on end, and more buyers start to wonder what's wrong with the house just sitting there with no offers. If your house doesn't sell within a month, it is priced too high.

The house I live in currently the people I bought from lost big time. They bought the house for 300K and sold it to me for 300K with a 4K credit. Factor in they put in AC, tiled the bathroom, new stainless appliances, new carpet, closing costs buying and transaction costs selling, they easily lost 60K after 5 years. You can tell they wanted to avoid this because they originally listed the house at 360K and it sat there for months on end.

Frankly, between realtor fees and excise tax, I see where they are coming from, but that's why you must be prepared to hold for long periods of time so that you actually make a profit. Heck, even then there are no guarantees. Owning a house for 10 years is a long time but if you bought at the peak and are still not recovered, transaction costs will basically make it a losing deal for the most part.

MgoSam

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #23 on: October 13, 2015, 01:27:31 PM »
My neighbor currently has the same problem. He originally listed his townhouse for $239,900 like a year ago. As a result, the couple that owned my place listed their place at the same price even though it's about 200 sq ft less. Fast forward 10 months, I bought it for significantly less (they had dropped their price 6 times by this point) than what they were asking for and totally had my way when it came to negotiations. Essentially they became motivated sellers because they were paying two mortgages and hadn't been able to rent out my unit (or rather did, but had a bad experience). My neighbor just got a new listing agent, and has dropped his price to $219,900, and another neighbor told me that he only did so because the listing agent wouldn't work for him without it. Even so, it's still overpriced as I barely see anyone coming by to take a look at it.


clarkfan1979

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #24 on: October 16, 2015, 07:17:32 PM »
Don't waste your energy getting upset. Use that energy to buy a property from a willing seller.

I have my eye on a condo complex with 2/2 units selling for around 180K - 210K. Many of these sold for over 300K at the peak. Someone is trying to sell their unit for 325K because it has granite countertops. I just smile and say I will buy that unit for 200K after it becomes a foreclosure.

SirFrugal

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #25 on: October 17, 2015, 03:00:26 AM »
Don't waste your energy getting upset. Use that energy to buy a property from a willing seller.

I have my eye on a condo complex with 2/2 units selling for around 180K - 210K. Many of these sold for over 300K at the peak. Someone is trying to sell their unit for 325K because it has granite countertops. I just smile and say I will buy that unit for 200K after it becomes a foreclosure.

That's my attitude as well.  I've been casually looking for some land in my area for the last year as I'd like to build a house at some point in the next year or two.  I'm in not in a massive rush...I just know at some point I'd like a little more privacy than a condo offers, a yard, and a shorter commute to work.  A few months ago I put an offer in on a lot that had been on and off the market for several years and the guy wouldn't budge.  I can't help but wonder how much money he lost out on by not even being able to drop his price 10k...he probably is paying about 2k a year in taxes plus lost opportunity costs of having money wrapped up in land in a real estate market that has been rather flat the last several years.

sammybiker

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Re: I am really sick of seller listing properties at unrealistic prices
« Reply #26 on: October 17, 2015, 04:44:51 AM »
A lot of credit for this practice also goes to idiot listing agents that a) don't know the market  or b) don't care about their clients...or both.  There are idiots in every field but I'm convinced RE agents run well above average in that department.

Sound advice by Clarkfan & others.  Keep looking for that motivated seller and have a strong offer ready.