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VOL. 42 | NO. 41 | Friday, October 12, 2018

Desperately seeking sanity in the pricing of houses

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“I don’t want to appear desperate” is how sellers often respond when their listing agent tells them their house is not selling because the price is too high.

Here’s what buyers really think: “The price is too high, and I’m not looking at overpriced houses.”

When a seller reduces the price, buyers think the seller is reasonable or perhaps becoming aware of the reality of the market. They don’t think “desperation.”

If a seller offers a $1 million property for $500,000, buyers would not think the seller is desperate. The buyers would think they should buy the house.

There is rarely an evaluation of a degree of desperation on a price reduction.

Another thing sellers think is that buyers stake out houses and have properties under surveillance. Any reduction of price is quickly observed, thereby sending signals of the seller’s weakness and fear. Not so.

Buyers look at homes they can afford, with most spending as much money as they can muster in order to live the American dream.

When buyers tour a property that is at the top of their financial limit and it does not suit their needs, they pass. When a home that was priced higher out of their range has a reduction and consequently falls into their range, they will take a look.

Price reductions work in that fashion. They introduce the property to a different set of buyers. They do not lure former prospects back into the property.

Shoppers who visit houses and find they do not suit their needs still think the houses do not suit their needs. They have not been monitoring it hoping the sellers will blink. On rare occasions, the reduction could allow the previous lookers the ability to pour some money into the property to make it work, but the fact is they have moved on to other properties.

Sellers like Realtors to chase buyers and buyers’ agents. “Remember the people who saw the house three weeks ago?” they ask.

“Oh yes, I remember those people,” the agent responds. “They needed four bedrooms and you only have three and wanted three bathrooms and you have two, so they bought another house.”

“Well maybe you should find their agent and let them know that we are considering a price reduction,” they suggest. “Tell them we have another offer and we wanted to give them a chance.”

That always works. Telling a person who does not want something that someone else wants the thing they do not want always makes the original person want to buy the thing they did not want to buy in the first place.

Sale of the Week

Larger home sales continue to sell well in the Nashville market, with 21 homes selling for more than $3 million this year, according to Realtracs. There were 17 sales of $3 million or more during the same period last year.

The home at 1019 Stonewall entered the market at $4 million last May and closed last week for $3,810,000. With 10,985 square feet of living space in the main dwelling, the house sold for $401 per square foot.

Jane McCracken, long known for her representation of upper-end listings, was the listing agent. McCracken had the prescience to be one of the original owners of the Nashville Keller Williams empire.

Certainly no stranger to luxury homes, McCracken’s experience was valuable in that she required proof of funds from prospective buyers before she would allow them into the house. Many agents are being duped by imposters posing as buyers in this internationally famous real estate market.

Some of the less-experienced agents are thrilled to be working with upper-end buyers and do not want to burst their own bubble by vetting the persons, lest they lose a million-dollar dream to phony buyers. Some of them are quite good, masters of disguise, and able to convince the agents of their credibility with tales of boardrooms and travel.

With their proof of funds in hand, buyers were treated to a place McCracken described as “Resort living at its finest” with ceilings ranging from 12 to 20 feet with five masonry fireplaces, a workout room and a “spacious kitchen with Viking appliances and gorgeous marble.”

Additionally, McCracken noted there is a newly constructed outdoor kitchen, a humidor and that a “beverage fridge overlooks the guinite pool, infinity hot tub, with a fireplace and pit.”

The house was built in 2012 in the Oak Hill neighborhood, hence it had to meet the stringent building code. It inhabits a 1.72-acre lot.

Rick French, the king of luxury home sales, although not the King of French-King Fine Properties, delivered the buyer, all vetted and with $3,810,000 available for the purchase of the home.

Richard Courtney is a licensed real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at richard@richardcourtney.com.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0