Part II – The 3 Worst Things About Over Priced Listings – They Hurt the Seller, the Buyer and the Agent
Hoboken Condo Buyers
There are a lot of different types of buyers. Some of them clearly haven’t made the commitment to buy. These “buyers” could have the deal of the century fall into their lap and they still wouldn’t make a move. Other buyers think they can outsmart the market. They show up with spread sheets full of numbers showing break even points and comps. They won’t buy anything unless thy find a property they love and it is being offered at ‘below market value’. These buyers may spend too much time looking for that perfect deal and miss out on some beautiful, well-priced properties because none ever meet their magical criteria. Then there is the rare buyer who wants only the most luxurious, most expensive properties – the $4 million penthouse at The Shipyard, the lofts at Garden Street Lofts, the brownstones on Hudson Street or Castle Point Terrace or the huge unit at Maxwell Place with 2 balconies and the dead-on city view. It often seems that spending the most money possible is their main goal. These are the extreme cases. Most buyers are simply looking for a place they would like to call home at a price that they believe represents good value.
Buyers Can Figure Out What a Hoboken Condo is Worth
When buyers have shopped around a bit and have looked at a bunch of Hoboken condos, they start to get a pretty good sense of value. Potential sellers might do just that when deciding how to price their property. Go out and pretend you are buying a unit in the price range of the one you wish to sell. Examining the competition is one of the best ways to gauge how your own property stacks up. A savvy buyer will have looked at recent past sales to know what the unit across the hall sold for last year. A good realtor will supply that info to a buyer, along with the price the sellers paid and how long ago and comps for similar properties on the market. Tax records are public and once it is recorded, anyone can look up what a condo sold for in Hoboken. Smart buyers can often evaluate the price of a Hoboken property better than the seller.
Why Overpriced Properties Hurt Buyers
When a buyer walks into an obviously overpriced property it often engenders a bad reaction. It’s like dining in a restaurant where the portions are small, the service so-so and then the bill leaves you with sticker-shock. You leave feeling like you’ve been taken. When sellers haven’t done their homework and overprice their condos, especially in a dense city like Hoboken where it is very easy to comparison shop, buyers get a bad feeling and may be driven out of the market altogether. Should a buyer actually purchase the overpriced unit, it may come to light later, when comparing real estate stories with neighbors and friends. This can often be upsetting news. It becomes even worse when the buyer decides to, or has to sell in a few years only to learn that they paid too much when they bought and they may to have to take a hit when they sell. Consumer confidence drives markets.
Why do Sellers Overprice?
The short answer may simply be greed. Overpricing often backfires. These properties don’t sell – they just become stale. Ignorance may be the other common cause for overpricing. Perhaps sellers should read this blog or do some research. For example, there is a Hoboken condo for sale by the owners who bought it at the height of the market. They lived in it with their small children (and sticky fingers), did no renovations or significant work, and had their view obstructed by construction which still has years to go. They are asking for more than they paid and more than other units of the same size in the same building recently sold – almost $100,000 more – that is not a typo. Why would a buyer pay that kind of premium for a property that, if anything, has decreased in value? Smart buyers know what the seller paid and the sales price of the other condo units. This property happens to be for sale by the owners. Overpricing, however, is not limited to FSBOs. I showed a Hoboken condo a few nights ago listed on the MLS and the listing agent was also the owner. It was listed for $80,000 more than the last sale in the same building 2 years ago. The sold unit was more updated, a floor lower, showed better and it still took over 3 months for the seller to get an offer. How does this agent/seller justifies that jump in price in a market where prices have been steady since ’06? The potential buyer walked away fast.
Sellers Beware – Buyer Beware – You Both Need to Do Your Homework
The bottom line is that overpriced properties seldom sell. The seller is going to go through a lot of time and effort trying to market a property whether on his own or with an agent (see part III). Buyers, if they have shopped around, done the research and have the information will know when there is value and when there is not. If the property for sale does not reflect value for the buyer and make him or her feel comfortable about paying the price, the sale does not happen.