The negotiating abilities of buyers and sellers and the overall market environment greatly impact the profits from real estate. Sellers almost universally believe their properties are worth more than the market will bear. People become emotionally attached to their houses, and because it is very valuable to them, they assume it is just as valuable to a person who is not attached to the property.
Sellers always hope to find the buyer who will appreciate their home as much as they do and thereby pay top dollar for it. The vast majority of homeowners have unrealistic expectations of appreciation. The combination of emotional attachment and unrealistic appreciation expectations cause sellers to believe their house is more valuable than it is, and when it comes time to sell, they price it accordingly.
Sellers usually are forced to discount a property from their perceived value in order to sell it, except in raging bull markets, sellers can sometimes get more than their asking price. In bear markets, they may have to discount the property significantly in order to sell it. Bear markets are the most difficult because sellers have difficulty lowering their prices, particularly if they must sell at a loss. Sometimes the difficulty in lowering price is caused by the amount of debt on the property, and sometimes it is caused by seller's emotional issues. No matter the cause, seller's aversion to lowering asking price often results in a failure to sell the property.
Any seller who does not feel comfortable negotiating price, particularly for such a valuable asset should consult a realtor. This is their training, and a good one can more than pay for their commissions in added sales revenue.
Lawrence Roberts is the author of The Great Housing Bubble: Why Did House Prices Fall?
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Negotiating Skills Make a Big Difference in Home Sale Profits.
