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Is this a good tactic or just weird?

Posted by weedyacres (My Page) on
Mon, Apr 22, 13 at 14:15

All right, psychological gut-check time, if you're not tired of my home-selling sagas. :-)

We had a showing a few days ago, potential buyers came back with several detailed questions that indicate serious interest. As you know, we're considering a price nudge. What's the psychology of dropping $10-15K while they're still gathering info?

Our agent also suggested something else that he said worked on him once. His proposal: call the buyer's agent and "let it slip" that in a couple days we'd be reducing the price. That might spur them to get an offer in quickly, the idea being that the price drop might get someone else off the fence so they needed to move quickly.

I am SOOOO not a gimmicky person, and wish the world was just rational. But, recognizing that most of the world is not as left-brained as I am, I'm wondering if there is any value at all to taking that extra step with the advance warning thing.


Follow-Up Postings:

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RE: Is this a good tactic or just weird?

Personally, as the potential buyer?
I would wait for the price drop. No sense paying more for a property that has little movement....


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RE: Is this a good tactic or just weird?

Agree with LuAnn. I'd wait for you to drop the price to get the lower cost of the house. Your agent has dopey ideas. NancyLouise


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RE: Is this a good tactic or just weird?

I'm with the others. If I knew they were about to drop the price, I'd wait for the price drop--esp if it has sat for ages.
Drop it today, and have your agent call them today.


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RE: Is this a good tactic or just weird?

And if I were the seller, I wouldn't want them to know I was even thinking of dropping the price!


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RE: Is this a good tactic or just weird

And if I were the seller, I wouldn't want them to know I was even thinking of dropping the price!


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RE: Is this a good tactic or just weird?

Same here--as a buyer I would wait until the price drop, if I received that call.

If you do decide to adjust the price, your agent should call them as soon as she/he gets the paperwork or whatever.


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RE: Is this a good tactic or just weird?

As a buyer, a price drop on a house that I was interested in might make me more likely to make an offer, but it wouldn't change the offer that I would make if I felt the home were overpriced. If the home were listed for 500K, and I felt it were worth 400K, and the owner only dropped it to 490K, then I might actually make that 400K offer. If the price didn't drop, I probably wouldn't bother because I'd see the homeowner as being unreasonably attached to the home and unwilling to actually sell. The price drop would let me know that the owner might be able to be reached with my idea of comps and why I think it's so overpriced.


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RE: Is this a good tactic or just weird?

If you can live with a 15k drop to get a sale, that is what I would do. I would want to make my best offer, before they lose interest. If they are on the fence, it could bring in a real offer. You can wait and see if they actually make an offer at the current price, but once they are gone, they are gone.

If you really want to move on, I would price it at the price you are willing to accept. No games.


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RE: Is this a good tactic or just weird?

If your potential buyers came back with detailed questions while gathering information, it shows that they are not the "all right brain" type. Tell your realtor comes up with a less silly idea.


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RE: Is this a good tactic or just weird?

OK, sounds like everyone's with me on nixing the goofy "accidental slip-up" ploy.

What about dropping the price a tad now, while they're considering the answers to our questions, vs. waiting for them to make an offer?


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RE: Is this a good tactic or just weird?

Drop it today. Call the today.


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RE: Is this a good tactic or just weird?

I vote for weird. If I were the buyer, and I "heard" the price was going to drop, I would wait for the price to drop. It sounds like the prospective buyers are interested. Give them a few days to give an offer.


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RE: Is this a good tactic or just weird?

Give them a week or so, and save your dropping the price for a counter offer if necessary, and tell your realtor to be quiet!!!


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RE: Is this a good tactic or just weird?

Hope the prospective buyers haven't put two and two together with the pictures of the house/MLS number/your user name and now your price strategy detailed for all to read.

I know I would certainly do a Google search on any property I would be thinking of buying.

The "let-it-slip" thing is absurd and manipulative. I'd wait a few days and see if an offer comes in. Then use what you might have dropped in any price negotiations.

If these guys don't offer, just go ahead make a serious price drop and re-contact them (and any previous serious lookers that haven't already bought something else) and see if the new price brings 'em back to the table.

Good luck!
L.


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RE: Is this a good tactic or just weird?

Personally, I think it's "weird" to let an interested buyer swim around the home without tempting them. Your behavior doesn't sound rational to me at all. Quite the opposite.

Let me add caps for effect.

YOU'VE GOT AN INTERESTED BUYER COMPARING YOUR PROPERTY TO THEIR BUDGET, THEIR WANTS/NEEDS, ANOTHER PROPERTY OR ALL THE ABOVE.

Get it?

NOW is the time to act. Not later after their emotional/psychological momentum has shifted FROM you to someplace else.

My suggestions.....

1) have your agent contact theirs and suggest openly that you are a MOTIVATED seller and that you'd accept a REASONABLE offer. Be transparent, but don't give a value. That alone may get you an offer (this has worked for me 80+% of the time as a seller). If they don't offer, they've already decided on something else.....including waiting if they aren't motivated themselves.

2) If they don't budge, wait 48 hours and drop your price just a little. 2% is more than enough. It resets the search engines and you'll pop to the top, especially if someone has marked you as a favorite. This sets the tone that #1 above was a serious overture. Be authentic.....don't dangle a carrot you aren't willing to let someone eventually catch.

Or do nothing, roll the dice and gamble. Irrational people gamble a lot. Rational people understand and know how to work human psychology 101.


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RE: Is this a good tactic or just weird?

Option 1) Drop the price TODAY. Have your agent enter the price drop in the MLS. Then your agent should call the agent of these buyers and tell them of the new price drop that just occurred.

No game playing needed.

You might stir up unterest from other parties with the price drop. Wouldn't it be awesome if you got 2 offers. You never know.

A price drop might be what's needed to get these folks off the fence. If you delay by 1 or 2 weeks, then these folks might pick another home. You want their minds focused on YOUR home. A price drop will keep their minds on your home. Do this before they make a decision to focus elsehwere. There is only a short time while they are deciding on your home. Once they remove it from their list, it might be gone forever. Get that price drop in asap.


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RE: Is this a good tactic or just weird?

Live Wire Oak and Tony 2 Toes have it right.
This buyer is one of those ones that enter your buyer pool every 2.5 months or so. If they do not purchase your home, be mentally prepared for possibly another 5 month wait. It is simple math and stats.
We all just spent 40 posts telling you to drop the price, and now we are here a few days later answering again if you should do a price drop. If you do nothing with these buyers, there is a good chance that your home will be "second place" again.
Weedy, have you figured out what timeframe you want to sell in? If it is days or weeks then you HAVE to drop the price. If you can wait for possibly 5 more months, then you can affard to wait for the market to catch up with your current price.
You need to figure your timing out.


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RE: Is this a good tactic or just weird?

You can wait. You will probably lose the buyer, but you can wait.

When we purchased our home, we found a home we "loved" and made an offer about 7% under list. The sellers were insulted, came back full price, and we moved on. Within a week, we had found "the house". First day on the market, we made an offer and had a deal.

The agent from the first house called us a few days later and encouraged us to try another offer.

Too late!


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RE: Is this a good tactic or just weird?

Lirio: I've never posted links to the MLS or even been specific about where I live, to maintain anonymity.

Tony: What behavior of mine do you read as weird? Listening to my agent and his odd ideas? :-) I have a love-hate relationship with the real estate industry (can't live with 'em, can't live without 'em), and am trying to rationally evaluate recommendations. My inclination is actually to do what you suggest: have my agent tell them we're motivated, but wait a day or two to do the price drop, since they may be motivated sellers that love the home as well, and you don't want to leave money on the table unnecessarily.

NC: Sorry if my posts are grating on you. :-/ This one is because there's a twist in the strategy: a potentially interested buyer, just as we were looking at a price drop. Do we stay or do we go?

And a reminder: we haven't come in 2nd place a bunch of times. Only one of the buyers that was seriously considering us has bought something else.

And your recommendation was to listen to LWO and Tony, but LWO (and kirkhall, 3 times) said drop it now and Tony said wait a couple days. That's the decision we're looking at right now. Which strategy would you recommend to your buyer in this case?

I'm not quite following your logic of "figure out what time frame you want to sell." Honest question here, not an argument. Of course we'd like to sell today. But pricing isn't such a science that I know absolutely that price X will sell it today and price Y will sell it 5 months from now. That would make it easy to do the math and pick a price. I wish it were so simple....

Oh, and one more question for all of you: To me, when realtors speak of "motivated sellers," I read it as desperate. That's not the image I want to convey (because it's not true). Am I mis-interpreting how everyone else views these words?


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RE: Is this a good tactic or just weird?

A "motivated" seller gives themselves a time frame, be it 3 months or a year, and has a strategy to sell within that time. Usually below market price, so that they can ensure a sale. And yes, it involves price drops if it hasn't sold by a certain time, and it also involves pricing aggressively on the front end. Not pricing it "over" market price so you can then have negotiating room. Getting the sale is more important than wringing out every last cent from the house. They want to move on to other things, not deal with an albatross holding them back. They'll take a loss if they have to, to be able to move forward instead of holding still.

You are clearly an "unmotivated" seller. You keep looking for gimmics or "tactics" and don't really care when you sell, if at all. You're happy to hold on to the property for years until you get a certain dollar figure. You'll wait it out until the market comes to you, rather than adjusting to the market.

That, at least, is the image you portray in your posts here. I'm sure the realtors in your community have developed a similar view of you.


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RE: Is this a good tactic or just weird?

When were these buyers last AT your home? More than a couple days? You've already passed Tony's wait and see timeline.


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RE: Is this a good tactic or just weird?

You ask me what I would do if this was my buyer?...
I would have done a market valuation before any offer submitted. We would have then commented back and forth that the subject home seems a bit overpriced, now that we truly start looking at the details. Then, sometimes they will write an offer at or near the market value, or, more often than not, they find some other property that offers more value.
But if the eventual offer is gonna come in at a certain price no matter what your asking price is, then why not just save the time waiting and reflect that in your pricing and marketing?
I actually enjoy following your posts / threads especially, Weedy. I can not see how the Spring market can't lift you a bit. It has been really bsy here the last few months. It may come to your city too.


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RE: Is this a good tactic or just weird?

FWIW, I don't see motivated seller as being desperate. I see it as being, well, motivated. I recently sold a piece of land. I was a motivated seller. I wasn't desperate. I owed no money on the land and it's value (due to location) was going nowhere but up. However, I had made the decision to sell and I preferred to do it now rather than wait around a year by pricing it high and then slowly moving it down (as I saw some people doing in the same area). I talked to my agent who gave me a price for what they thought I should list at if I wanted to sell within a year (which was people typically do in that area) and a rock bottom amount to sell more quickly. I picked something between the two, closer to the rock bottom. I had 2 written offers within a week, my agent had several people making oral offers (which of course are worthless) and accepted a full price offer with no contingencies and closed very quickly. I was a motivated seller. Maybe, I could have gotten a little more if I messed around with it for a year, but I was ready to be done with the property and not spend my time on it.


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RE: Is this a good tactic or just weird?

I think Weedy acres IS a motivated seller. It's just that she is not a desperate seller. If she wasn't motivated, she wouldn't be doing everything she has been doing (asking for opinions, landscaping and doing her homework!)
I can understand that she wants to get a fair price for her home. Obviously, she could cut her house price by 7% today and then again in two weeks and again until it sold. Some people have to do that!
I think I would also let the sellers know you are motivated and then give them a couple days and then drop the price.
--signed,
just on the market (motivated, not desperate)


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RE: Is this a good tactic or just weird?

Motivated Seller = Someone who demonstrates they want to sell the house. Not impassive, but rather active, in making the first move to potential buyers. Could be by demonstrating a price drop, a follow-up from their agent with a "make me a reasonable offer" or both. Just throwing the home onto the MLS and wishing upon a star does not make for a motivated seller.

Desperate Seller = Someone who drops their price every month for months on end until it ends up bought or in fire sale territory.

Huge, huge difference.

Look, some sellers aren't motivated. From my reading of your posts, I'd say you aren't. But I don't know you, or your market, so that's just one guys (irregularly formed) opinion. I certainly don't think you desperate.

Its sort of like fishing. If all you really want to do is take a nap on a sunny day, throw your line into the water unbaited. If you really want to fish, put bait on the hook, cast and re-cast as necessary and once you've got a bite SET THE DANG HOOK.

Every once in awhile I've caught a stupid fish on an empty hook. True story. But that was dumb luck and and an even dumber fish.

The behavior I see of yours as weird is that I think you are waiting for a fish to jump on your empty hook. Even with that tactic....you need a lot of luck, not strategy.

Counting on luck = irrational.

BTW, just to clarify my recommendation:

1) Have your agent ping them with a "make my client a reasonable offer" statement.
2) If that doesn't work, I'd suggest a minor price drop. MINOR. No 'desperate' reduction. 2% on your home's value is plenty to signal "I'm motivated."

As you've already recognized, this is an art, not a science. Put on your dancing shoes, have some fun with it. Over-thinking art is like trying to figure out what Mona Lisa was grinning about...who really cares, its the grin that makes her HER.

This post was edited by Tony2Toes on Tue, Apr 23, 13 at 13:59


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RE: Is this a good tactic or just weird?

Personally, I'd wait a few days and see what happens. Having just bought a home 7 months ago (took a year to find it) I didn't see 'motivated seller' as desperate if the owner still lived in the house. When a house was empty, I did see the 'motivated seller' as desperate.

You are still in the home. It is spring and the beginning of the busy buying season.

We listed our house late, June but had tons of activity in July and accepted an offer in August.

I don't think I'd be too quick to drop price much at this point. I'd give it more time.

Jane


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RE: Is this a good tactic or just weird?

"I think Weedy acres IS a motivated seller. It's just that she is not a desperate seller. If she wasn't motivated, she wouldn't be doing everything she has been doing (asking for opinions, landscaping and doing her homework!)
I can understand that she wants to get a fair price for her home."

I suppose everyone has his/her own view. I see someone who keeps rationalizing what she thinks the situation should be, rather than looking dispassionately at what it *is*. Which is that she's been sitting at the same price point with not a single offer for a year now including the FSBO period.

And I don't see the OP wanting a fair price, she wants her price. Clearly it isn't a fair one because not a single potential buyer has cared to even start negotiating.



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RE: Is this a good tactic or just weird?

I agree with GreenDesigns ----

"You are clearly an "unmotivated" seller. You keep looking for gimmics or "tactics" and don't really care when you sell, if at all. You're happy to hold on to the property for years until you get a certain dollar figure. You'll wait it out until the market comes to you, rather than adjusting to the market. "


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RE: Is this a good tactic or just weird?

If you wait long enough, you can sell any house at a particular price. Perseverance has some merit. If I bought a house in 2007 for $350k, sunk a ton of upgrades into it, and tried to resell it for $525k, I might find a buyer if all other market conditions are right. It's just a waiting game to find the right buyer and/or waiting for market conditions to lift surrounding values enough to make your home look market priced.

Wait all you want, it's your home. Or do something with the price to change its market positioning. Passive or active....totally your choice.

This post was edited by Tony2Toes on Wed, Apr 24, 13 at 20:43


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RE: Is this a good tactic or just weird?

How about a raffle? I'd buy a ticket!


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RE: Is this a good tactic or just weird?

I'm guessing it is moot now. Either they are in contract talks, or have moved on.
What is the update, weedy?


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RE: Is this a good tactic or just weird?

I'm with Tony. Your agent should tell the other buyer's agent that you are motivated and to make an offer. Then you can adjust your price during negotiations.
If no offer is coming, do a slight price reduction.


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