Now that all the froth and bubble has died down and the Vancouver market has normalized I'm encouraging my buyer clients to start discussions on any listed homes that appeal to them and suit their needs...regardless of the list price.
The number one reason why an otherwise attractive home does not sell is price. Homes that are grossly overpriced often never sell at all.
Why Don't Home Buyers Make Offers on Overpriced Listings?
- They don't want to offend the seller. It goes against human nature to offer substantially less than asking price to a seller. It's insulting to the seller and embarrassing for the buyer.
- Buyers erroneously believe that the seller knows the home is overpriced. They believe that if a seller would be willing to sell for less, the seller would simply lower her price.
- Buyers also assume that the seller must have turned down low-ball offers from other buyers because surely someone, somewhere along the line, had offered a reasonable price to the seller. But many times, there are no offers at all.
How Do You Find an Overpriced Listing?
The easiest way is to ask your Realtor about the average days on market (DOM) for your area. Multiple listing systems are designed so it's fairly easy to compute the DOM.
Then ask your Realtor to sort through the listings and give you a print-out of every home that has been on the market longer than the average DOM.
If your Realtor is a neighborhood specialist, it is likely she has toured these homes and has intimate knowledge of condition and layout of these homes. Ask her to share this information with you.
You can also ask your Realtor which of the homes she thinks are overpriced as well. You will be amazed to learn that often Buyer Realtors don't tell Listing Realtors whether their listings are overpriced because agents don't want to offend anyone either! Listing Agents aren't infallible and,
ultimately, it is always the seller's responsibility to select the sales price.
Why Would a Seller Lower the Price?
Now, not every home that is overpriced will ultimately sell for less than market value. But many homes that are listed at unrealistic prices are owned by sellers who are motivated and who are willing to listen to reasons why they should sell at a reduced price to you. If you find out that a seller has turned down multiple offers for less money, it might mean that it's just a matter of timing. Eventually the light bulb will go on and a seller will say yes.
There are overpriced gems hiding among the current inventory of homes for sale.
If you are interested in getting into the market but have been frustrated by losing out in multiple offer situations now is your time.