" THE LAST BID"
(Am I seeing my property the way the market sees my property)?
The wonderful property that is truly one of a kind and has no comparables in the area can be a marketing dilemma for the ownership. Why? Because it is One Of A Kind! (OOAK). Often the first approach to selling the OOAK by a well-intended owner is to take the same approach that may have been used to sell more conventional property or to offer the property the same way it was purchased. Perhaps transactions in the past on less expensive real estate or more "mainstream" property concluded successfully with the "price and wait" strategy.
Usually price tagging OOAK either leads to a "too fast a sale" with a lot of money left on the table or the downward price-tagging spiral begins because all price tags are just really… guesses. (Guess too low/sell too fast. Guess too high/wait).
Once a seller realizes that they have created, assembled, or purchased/inherited a now unconventional property (unconventional is not bad at all), the same strategy that was comfortable in the past on other subjects, may lead to an uncomfortable pairing and the seller may spend too much time learning the hard way that "pricing does not create demand, demand creates the price". Without demand (buyers) offering purchase funds, just exactly where is the value? Unfortunately the appraisals; tax and otherwise, offer no purchase funds.
If the property is now unconventional compared to other properties in the area due to:
then the "price and wait" method can leave a lot to be desired in obtaining results.
Here's why. The market determines the value. Simple. Yet, if there is not a "waiting in existence" market that is ready, willing and able to purchase, there is no value because there is no transaction. One of the most common mistakes that a seller, who has never been in this type situation (offering unconventional property), will make is to make the assumption that "price creates demand".
Price does not create demand; Demand Creates Price…. Without demand there is no price and ….much demand creates the best price.
The golden rule of any business transaction is "he who brings the gold will makes the rules. In other words, the demand side determines the price.
Sometimes the affluent or savvy buyers know this axiom perhaps better than some sellers. Should the previous seller have used a price and wait strategy, then all able buyers now know that there is typically only downward negotiation because the seller was encapsulated by his own ceiling of value. The seller is placed in the position of not knowing when or what the final price will be. The seller may be guilty of selling too fast (money left on the table) because the strategy to create a competitive bidding environment was not employed. Usually, the scenario is to price too high and then start lowing the price in hopes of creating demand. What a shame!
"Price tagging" OOAK can lead to market resistance. Why?
A seller may get a number of inquires about price because that's the first question the market usually asks. Often the market does not want to rush out and agree with the seller's opinion due to the fact there may be few, if any, comparables for them to study.
Unfortunately, many sellers are not skilled to know that on an OOAK, price is the last term of sale discussed.
When price tagging is placed on an OOAK, usually a stalemate occurs before the downward negotiation begins which is typically led by the seller's lowering of price.
What's the answer? Eliminate price tags. Affluent market "ready to buy" purchasers are driven by their own greed, ego and the fear that someone else might get there first.
Assembling these buyers at one time under the terms the seller has set is the most positive situation a seller can have. It's called an auction and it is upward negotiation! Placing buyers' egos and testosterone in a competitive environment is a seller's dream.
Buyers will bring you their money if they believe they are coming to purchase (reverse psychology). It's greed. Competitive bidding under the seller's terms, from this crowd of ready, willing and able bidders, is a dynamic situation.
That's why the savviest of sellers such as Sotheby's, Christie's, the banking industry, even
Please read the cover page to the Reference Letter package. You'll like it.