Buying or selling a home is one of the most important transactions in a person’s life. And sometimes it is also the most stressful, not least because the perceptions of the seller are often very different from those of the buyer. It is important that each party tries to see both sides of the coin, so that all parties are realistic on the path to successful negotiations and ultimately a deal.
After representing clients for over 15 years, I have observed some industry truths that will help us better understand the process of selling a home, whether it’s a multi-million dollar mansion dollars or a modest family home for a first-time buyer. Over the years, I have made a few observations about buyers and sellers and their great differences in outlook as we work to finalize a sale. Whichever side of the transaction you find yourself in, it helps to have a full understanding of the big picture.
1. Sellers always think they can get the highest bid for a home, while buyers always believe they can pay the lowest price. With that in mind, it is essential that sellers properly appraise their home from day one, do their due diligence, and do not overvalue their home. In fact, I often recommend undervaluing the property as this will certainly adjust during the selling process, and more often than not the seller will get multiple offers and ultimately receive above their asking price.
2. Buyers tend to take a more critical approach when buying a home, while sellers will always take a more optimistic approach. A buyer will examine the property very critically before making their offer, asking for concessions even for minor issues. A seller doesn’t always want to see potential problems with their home that might justify asking for a price reduction.
3. Try to objectively examine the buying and selling process. The second you decide on the home for you or make the decision to sell, it is imperative that you step away from the situation and let your real estate professional take the reins. This process is always difficult, and the more you get involved, the more it can negatively affect your life. This is why it is so important to choose the right real estate agent. This person is responsible for keeping your best interests in mind during a transaction.
4. When looking at comparable sales, costs can go either way. Markets tend to change quickly, especially in a luxury market like Los Angeles. in which the pricing is rather subjective. There is no real mathematical equation for selling a house, and that is why we see such a wide variety of prices in the market. Based on this, buyers and sellers tend to have very different views on the mathematics of a composition, and it is often difficult to balance the two. While it starts with the math of cost, everything else – from the street to the style to the location – it all becomes subjective.
5. Whether they represent the seller or the buyer dictates the real estate agent’s representation of the same home. It’s the salesperson’s job to get as much money as possible, and so agents will analyze the data to get the most out of their client’s home. And vice versa for the buyer, who looks at the data to get the best value for the property.
Ultimately, the key to a successful sale is for buyers and sellers to agree with each other. Much of the stress can be relieved if we try to understand the perspectives of both parties.