Buying or selling a home is one of the most important transactions in a person’s life. And at times it is also the most stressful, particularly because the seller’s perceptions often differ greatly from those of the buyer. It is important for each party to try to see both sides of the coin, so that all of the parties are realistic on their path to successful negotiations and, ultimately, a deal.
After representing clients for more than 15 years, I have observed some industry truths that will help us better understand the process of selling a home, whether it’s a multimillion-dollar mansion or a modest family home for a first-time buyer. Over the years I’ve made a few observations of both buyers and sellers and their vast differences in perspectives as we work toward finalizing a sale. Whichever side of the transaction you’re on, it helps to have a full understanding of the big picture.
1. Sellers always think that they can get the highest offer for a home, while buyers always believe that they can pay the lowest price. With this in mind, it is critical for sellers to price their home correctly from the first day, do their due diligence and not overvalue their home. In fact, I often recommend to underprice the property, as this is sure to adjust during the selling process, and more often than not, the seller will obtain multiple offers and ultimately receive above their asking price.
2. Buyers tend to take a more critical approach to buying a home, while sellers will always take a more optimistic approach. A buyer will look very critically at the property before making their offer, requesting concessions for even minor issues. A seller does not always want to see the potential problems with his/her home that could call for a request for a price reduction.
3. Try to look at the selling and buying process objectively. The second you decide on the home for you or make the decision to sell, it is imperative that you remove yourself from the situation and allow your real estate professional to take the reins. This process is consistently difficult, and the more involved you become, the more it can affect your life negatively. This is why it is so important to choose your real estate agent so carefully. This individual is responsible for keeping your best interests in mind during a transaction.
4. When you are looking at sales comparables, costs can go either way. Markets tend to change quickly, especially in a luxury market like Los Angeles. in which pricing is rather subjective. There’s no real mathematical equation for selling a home, and that’s why we see such a wide variety of price points throughout the marketplace. Based on this, buyers and sellers tend to have very different perspectives on the mathematics of a comp, and balancing the two is often difficult. While it begins with the mathematics of cost, everything else — from street to style to location — all becomes subjective.
5. Whether they’re representing the seller or the buyer dictates the real estate agent’s representation of the exact same house. It is the seller’s job to get as much money as possible, and thus, agents will analyze the data to get the most money out of their client’s house. And vice versa for the buyer, who is looking at the data from a perspective of getting the best value in the property.
When all is said and done, the key to a successful sale is for the buyers and sellers to be in tune with one another. Much of the stress can be relieved if we try to understand both parties’ viewpoints.
Original content Forbes