Market Insights: A little ‘wiggle room’ is a good thing
Ryan Summerlin February 16, 2013
Realtors hear these sorts of statements from sellers all day long:
“Buyers want to feel they are getting a deal.”
“We have to leave lots of room in our price for negotiations.”
“We are willing to lower the price; however, let’s start at an extra-high price.”
Heck, if you have sold before, I’ll bet you have even said something similar. We, the Realtors, agree these statements contain a little logic.
Merriam-Webster dictionary defines “wiggle room” as leeway, latitude, “a contract with wiggle room for further negotiations.” I like it. The question is: What is the right amount of wiggle room?
Let’s imagine three photocopier salespeople come to your office. The first two offer you prices that are very similar and very close to what you think the machine is worth. The third salesperson tells you about five extra buzzers/whistles that you will never use and asks 20 percent more than the other two for basically the same machine. What would you do? How about I answer with what I have done. I have chosen to do business with one of the first two. Isn’t that what you would do?
Real estate and photocopiers have a lot in common. When you boil it down, all photocopiers provide the same basic function, yet each model and each brand is different. Some of those differences are worth paying more for, others are not.
When it comes to real estate, studio condos in the Liftside complex in Breckenridge illustrate this point. The floor plans are the same. What varies are the views and the renovations. There is a condo in the complex that has been on the market for 601 days. It is priced at 23.64 percent higher than the last sale. Unmistakably too much wiggle room.
The right amount of wiggle room is a little or just enough not to scare away buyers. The asking price needs to display value and show you are someone with whom the buyer wants to do business – think of that third photocopier salesperson.
To determine the right amount of wiggle room, all you need to know is the market value of the property and how buyers are behaving in the current market. The people with the answers are Realtors and appraisers who are day-in and day-out involved in transactions. In other words, work with a full-time and experienced Realtor whom you trust.
OK, you still want a magic number, an exact percentage. The answer is the sale of 506 Forest Hills Drive, Breckenridge, shown in these photos. The asking price was $699,000, there were no price reductions and it sold in less than a month for $675,000. Like the photos? There are more great properties out there, just ask.
Love life, Daniel
Reach Daniel Webster Johnson at (970) 393-3300 or him drop him a line at Daniel@Your
MountainBroker.com. He is a very active, full-time Realtor in Breckenridge, who has earned the national Quality Service Certified Platinum award, recognition of 100 percent client satisfaction. He is one of the team at Resort Brokers Real Estate located at 100 S. Main St., Breckenridge.