THE PRICE IS RIGHT
The Cloud of Ownership Bias
BREAKING NEWS!!!! Sellers think their property is worth more than it really is. Call it false hope, money already spent, or just plain gorilla math but make no mistake, it lives and breathes. Not exactly a revelation in Real Estate but it does present obvious challenges. What’s more, for every owner out there asking too much, there is a line of agents looking to spin the wheel and gamble on their behalf. In real estate brokerage, this is typically the upheld norm that is needed to make a living. Can’t win if you don’t play. Especially if you’re playing with someone else’s money. For agents, this is normally a fool’s errand and a fast track to making eight dollars an hour, once the commission on the reduced sales price is divided by the excessive number of hours spent chasing the price down to a reasonable level. It also explains why agents often reference how “busy” they are. Busy tripping over the dollars to pick up the pennies. For sellers, they usually squander their window of opportunity to recognize what the market is telling them. They lack the perspective needed get out of their own way and close the deal before time runs out on them. Factor in the carrying costs of holding out long term to get their price, an agent worth their salt will illustrate to sellers how much they’re spending in time, money, and resources to achieve the same results they could have gotten in a fraction of the time.
However, under current market conditions that present dramatically reduced levels of supply, the thought of asking too much is not as unreasonable as it was, just a short time ago. Couple this with the irrational exuberance of aggressive buyers, and the impossible can seem like the inevitable. IF the timing is right and the stars align. So long as sellers understand what’s at stake and are open to adjustments moving forward, the calculated risk here is justifiable. For sellers looking to double down and press their bets, this may present a potential opportunity to run the table and cash out handsomely within a reasonable timeframe.
In the same breath, holding out indefinitely is a pure risk/reward proposition that hinges largely upon luck, and luck is not a strategy. At some point, we all require a “come to Jesus” moment to acknowledge the reality of our situation. At specific moments in our “process” or experience, we’re granted opportunities to pivot back to reality and relinquish unrealistic expectations that have now made the perfect the enemy of the good. Most any other path is spitefully an act of denial and will likely be reflected in the results, or lack thereof. If you find yourself in a hole, stop digging.
The point here is largely philosophical but one that defines an individual, an agent, a methodology, a reputation, and all they bring to the table, rather than home to roost. Ironically, time is money. This explains why I refuse to chase money. When forced to choose, I’ll take my time, thank you.