Today, in order to shed light on this matter, we are glad to analyze with you the so many convictions exposed by different vendors when deciding to sell a property. We are going to do it from another point of view: trying to make become objective those subjective convictions that can be seen in the Real Estate, especially when talking about the vendors, and that the real estate web has completely changed. All of this with a precise aim: achieving a higher level of awareness so as to be able to make the best decision possible.
Let’s analyze, one by one, the vendors’ most used sentences, starting from the most recurring:
– I WANT TO SELL BUT I DON’T WANT TO SELL OUT
This is perhaps the most often said sentence of a vendor. It is very important to analyze it because it can lead to very serious consequences. As you will read in the remainder of this article, each of us always tends to overestimate our own things: we all have the best children, the most beautiful children, the most amazing holidays, and the best cars!
Subjectively it is all true because it represents the perception that each of us has of our own things, which we rightly give a higher value to than what they have in reality because they are our own and contain so many of our experiences and feelings. Everyone’s point of view is very different and we always see what we like to see.
This is also true for real estate: statistically, we overestimate the value of our property by between +50 and +100%. Therefore, when a professional presents us with an objective estimate of our property, the first feeling we get is always that, from our point of view, we are SELLING our property OUT.
However, the professional is in fact providing us with important advice so that we do not run the risks that you will read below.
– MY PROPERTY IS UNIQUE! I WOULDN’T WANT THE OTHERS EVEN IF THEY WERE GIVEN TO ME AS GIFTS.
This is one of the most common sentences used by vendors and it has a great truth: for you, the owner, your home is truly unique because it is yours, because you have lived in it for many years of your life, because you have seen your children grow up there or many life projects, because you have “felt” it strongly every time you woke up or had lunch alone or with friends, because you have experienced very strong emotions in your home and… for another 1,000 reasons.
However… it is and it will remain unique for you!
It is really important that you understand it completely, it is one of the hardest concepts to make a vendor understand.
Open your mind: no buyer will have lived the same sensations and experiences you did in your charming place. For this reason, that unicity is something deeply subjective, it is about yourself only.
If you want to be the buyer of your own house, so this is perfect. We could give it a +20-30% value as well.
But if you are not willing to purchase your home back, you have to make the effort of thinking with the mind of another buyer: a mind which is free of all those feelings you have and which are connected to your home because, obviously, those clients did not experience them.
So, you should always remember that: your home is unique for you, but it is just one among the many options every buyer has.
–NO ONE HAS A TERRACE AS MINE… MY VIEW IS THE BEST ONE IN THE WHOLE AREA… IN MY CONDO THERE ARE MANY VIPS… THE RENOVATION I DID IS THE BEST… MY HOME HAS THE BEST LOCATION POSSIBLE… I HAVE SEEN SO MANY HOUSES, BUT NO ONE IS LIKE MINE… (AND OTHER 100,000 POTENTIAL VARIABLES).
This is another subjective conviction that, in 90% of cases, puts the vendor into a rigid position based on some completely wrong convictions.
Let’s analyse now the eventual answers to those affirmations.
“NONE HAS A TERRACE LIKE MINE”
It is possible that very few properties will have a terrace like yours but… do you remember the proverb “never say never”? Maybe, in this case too, the most correct statement could be another.
Indeed, if we make a verification on a portal looking, for example, for how many properties in a specific area have a terrace, we will probably discover that some have a very important terrace too.
So, some of the other properties present on the market will have a terrace like yours. Just through simple online research, you will have the possibility to understand that there are other properties with the same features of yours.
There you go! It took you two minutes to overcome a conviction!
This is what can do and does the buyers’ market and that, probably, you did too when you were looking for a property to purchase.
But…in addition to this, you should ask yourself: “The market wants a terrace like mine, or is it just me that I wanted a terrace like the one I purchased?”
Often, we are convinced that what we like has to like to the others and, in general, to the market. We also think that the market will estimate what we love like us: but in real life, it does not work so.
“THE VIEW FROM MY PROPERTY IS THE BEST ONE IN THE AREA”
I can understand that, having you spent so many years observing that view, this has become the greatest of the area. It is a normal mechanism of our brain, but it is not so:
There are so many properties owing a view similar to yours, sometimes even a little better, but in 98% of cases other properties have a similar view to yours.
“IN MY CONDO THERE ARE SOME VIPS NEIGHBOURS”
You are absolutely right! However, there are also other condos with VIPs living in. So, this is basically a feature common to other situations.
“THE RENOVATION I DID IS THE BEST”
This is one of the hardest convictions to overcome. Indeed, the value that everyone of us give to what we realize and invest in brings to an overestimation.
Renovations and buildings follow some guidelines. If you are not GUCCI, PRADA, or BULGARI, your renovation will be similar to many others.
“THE POSITION OF MY HOME IS SIMPLY UNIQUE”
Here goes as for the view: after some years during which enjoyed that location, it has turned to be the most beautiful in the area for you. It is normal for us, but it is not true.
Indeed, there are many properties with a similar position to yours, sometimes even a little better, but in 98% of cases other properties have a similar view too.
“I HAVE SEEN SO MANY HOUSES, BUT NO ONE IS LIKE MINE… (AND OTHER 100,000 POTENTIAL VARIABLES)”
I hope that all the motivations I proposed you could have allowed you to open your mind and understand that, whatever you think is unique, in 99% of cases, it is unique for you and not for the market. Try to understand that your home is charming for you and that it is surely a beautiful solution for others too but, while it is UNIQUE FOR YOU BECAUSE IT IS YOURS, it remains just an option for the rest of the market. So, remember that what you consider UNIQUE is, for the market, JUST ONE OF THE OPTIONS.
If you will be able to achieve this awareness, you will also be able to open your mind and make the best decision possible.
Let’s move now to another of the most important and wrong convictions of the vendors.
–MY PROPERTY IS € 500,000 WORTH. WELL, LET’S ASK A HIGHER PRICE FOR IT, THE BUYER WILL SURELY NEGOTIATE.
This is one of the most rooted and ancient convictions of the real estate and it makes you risk to take very wrong decisions.
All the convictions that we analysed have completely changed with the arrival of the real estate web because are some really subjective aspects of the matter.
The one we are going to face now is, instead, an aspect that has been totally changed by the real estate web. Let’s discover it together.
Let’s start with an important analysis. We said that your property is € 500,000.
We as Great Estate created a very innovative system in order to establish with precision the real value of every property. In 90% of cases, the vendors position that value at about a 10% higher level than the real one. So, the asking price will be higher than € 550,000: let’s consider € 600,000.
What will happen at this point? Which will be its consequences?
Today, it is statistically proved that the majority of the sales start with online researches (more than 80%). And what do the clients do when searching on the internet? Through many websites and portals, they will make a first research on the properties between € 450,000 and € 550,000. What will happen then?
That your charming property will not be seen by the potential buyers, the ones who could really be interested in it. And this just because you said: “WELL, LET’S ASK FOR A HIGHER PRICE, THE BUYER WILL SURELY NEGOTIATE”.
“Let’s ask for a higher price, maybe a +20%, so that the buyer will make an offer a € 550,000 and, from there, we will start the negotiation”.
Even in the case, the buyer will do a research between € 500,00 and € 600,000, he/she will find tons of results (by clicking here you can see that, for a farmhouse between € 500,00 and € 600,000 in Umbria, we find something like 125 results).
So, what do you think is going to happen?
The buyer will find about 10-15 properties with a better quality/price relationship than your home and… in your opinion, which ones will catch his/her attention the most? You are right: those 10-15 properties. Your property will make the others been seen as a GREAT REAL ESTATE INVESTMENT even if, in reality, those properties are not an investment, they simply have a fair asking price.
Well. In this case too, your property will not be seen by the concrete potential buyers. So “WELL, LET’S ASK FOR A HIGHER PRICE, THE BUYER WILL SURELY NEGOTIATE”.
Let’s suppose that a buyer will fall in love with your property despite its price, that his/her heart brings him/her to consider your home too.
“Thanks” to hypothesis a) and b) we have already eliminated the market, while you will probably keep blaming the agency or the market to be not able to understand the beauty of your property. But finally, you have a client who does.
Let us explain you what happens in 90% of cases:
After an initial love, very important to start a negotiation, the buyer, his wife, children, friends will start to objectively think, so the client will end by saying:
“starting a negotiation for this home is not even worthy because, even if I really like it, the same happened to my wife and children for those other 10-15 properties with a price in line with the market”.
So, rationality wins on love and, once again, the buyer will be focused on those other 10-15 properties. This situation occurs in 99% of cases when the few clients that would have visited your home and who were in love with it end with DISAPPEARING.
They are not disappeared but focused on something else because rationality, when you have to invest your own money, wins on emotions. Keep always in mind that your property, even if beautiful, is just one of the many: this, even if hard to accept, is the reality.
Well, in this case, your charming home will be seen by a few. However, after an initial love and by comparing its price and features with the ones of the others, clients will focus themselves on the ones with the best quality/price relationship. And this is because you keep saying to yourself: “WELL, LET’S ASK FOR A HIGHER PRICE, THE BUYER WILL SURELY NEGOTIATE”.
Again, let’s suppose that the buyer will be in love with your home, that despite the fact that considers the quality/price relationship of the other properties fairer than yours, he/she still wants to present an offer for your home. Which do you think will be his/her approach to the negotiation? Let us tell you this.
His/her approach will be perfectly in line with your though. Considering that you asked for a value which is really high if compared to the real market one, he/she will think to have the right of presenting you a lower offer because you were the first that tried to “joke” with the buyers’ market. How would you behave if your counterparty would have started a negotiation with the aim of joking you? You would have done the same. So, be ready for a € 400,000 offer.
Whichever negotiation will start with a war declaration by both the parties and… how will negotiations like that start? In 90% of cases very badly, in the 10% badly. Once again, “WELL, LET’S ASK FOR A HIGHER PRICE, THE BUYER WILL SURELY NEGOTIATE”.
So, summing it up, this is what, in succession, will happen in case the price you will request for your property will be a 10% higher than its real market value:
- There will not be clients who will be interested in your property, so there will be a few visits only.
- The majority of the clients who will do the visits will affirm that the house is beautiful, but a few of them will present you an offer.
- If someone will finally present you an offer, that offer will be directly proportional to your fairness toward the market: so, be ready for a downward offer.
- In 99% of cases, you will not be able to sell your property so, little by little, you will convince yourself that you must adequate the requested price to its real value.
But this is not all: unfortunately, bad news is not finished.
First, your property – even if charming – will be completely depreciated by the market. This is because it saw it many and many times, as well as because none wants to purchase a property that has never been really considered purchasable.
So, that famous € 500,000 are now devaluated, both because of the time passing (since 2010, a property is used to lose about a 5%/year of its value; the only exception in Milan, where values have increased, but in some other areas the depreciation has been even worst) and because your charming property has lost that concept of “news” that the buyers love.
Those two elements together will bring you, after one or two years, to a value loss of about 10-20%.
What will you do with the time passing?
You will change the agency, you will blame the market, you will try to find the problem in many things… different by the requested price. But in your mind, you will know that you are asking for a price that you would be the first person not willing to pay for a property.
So, little by little, you will adequate the requested price to the estimate and, in that precise moment, you will send a strong message to the market: your “opening” to negotiate.
If, by one side, this may encourage the buyer to interest him/herself in your home, by the other – unless you position your property at a fair price – results will remain the same.
So, at this point, the best solution, the most innovative and performing, will be the one of REMOVING YOUR PROPERTY BY THE MARKET AND PRESENT IT BACK AFTER A MONTH as if it was a new one, with a right asking price and just an agency in order to make your proposal more “exclusive” and with a “perfect” presentation with professional photos and videos done after a Home Staging intervention.
Read the following four articles: you will discover how to make the right decision to reach the best result possible by overcoming old convictions and opening your mind to innovative methods.