Why do buyers lowball?

Hello welcome to Todd Miller TV. The question for today is: Is your Perception, Belief or Expectation interfering your ability to buy Real Estates; Successfully buy something here in Las Vegas or anywhere. Okay? You probably/If you buy something today, are probably doing it under the old model or whatever your culture says that how should you purchase something. So you you pricing/let me talk about it, it’s very simple. Let’s say, you grow up in a culture where when you go on the street to buy something, everything is over priced. Meaning, everything is intentionally priced above market value. And in order to make you feel good about your purchase, retailers overprice things and you have to go in and haggle the price. “You said I wanna pay, I wanna pay this” you negotiate the price down and you buy the item. So you feel good you got it for less than the price. Now, believe it or not, in Vegas, we have people who come here and they will under no circumstance, pay the less price. Even if we show them lease price is under market value, they won’t pay it. They believe if it’s a less price. That it’s price, they have to negotiate. So, going back to the like regular market, Imagine your sitting down with you Real Estate agent, to sell you house, Real Estate agent says your house is worth $325,000 and you still came “well we want list it for 335,000” and you would say “Well, you know it’s only worth 325,000, all the other houses sold for 325,000″ Well we wanna list it for 335,000, So we have a negotiating room, that’s what they call it” So what that means to the sellers is they believe that people are gonna want to feel good about the purchase, get it for less than the price. We as Real Estate professionals know all that’s gonna do is discourage people from looking at the house. And the only way to sell something is to help encourage people to come look at it. So what they’re afraid of is that if they offer less price then someone will not want to pay that. That’s how they operate, they don’t wanna pay full price. So, a very recent example, this actually happened, as you know we have some on a very very bottom end, not in the greatest areas in town, some really really cheap condos, under 30,000. So we had a client who was looking at a condo worth 28,000. So well just say “it’s worth this amount here” it was listed though for 20,000, so there’s $8,000 difference which is percentage is huge. Then they said “we wanna offer 18,000” then we said “but it’s worth 28,000, it listed for 20,000 and it’s a shortsale so it’s probably not gonna get approved at 18,000.” “Well we need to get it at 18,000, we need to get it here, and not here because the market’s gonna fall, we know the market’s gonna fall 20%, So we need to buy it so that when the market falls/’cause the shoe is gonna drop, the other shoe is gonna drop, we were told this by somebody, in the first half of next year.” Other shoe’s gonna drop, Ofcourse we’ve been hearing that now for 3 years straight. It’s always the next quarter or 6 months from now, it’s always a reason for wanting for a big discount. Shoe’s gonna drop, prices are gonna crumble, and were not gonna/so what happened is they made a super super low offer got thrown out. And then they complained. That no one wants to sell Real Estate. Well people don’t want to sell their Real Estate. Well, that’s not true, they wanna sell but they wanna get market value. So, the/what the thing to do is remember this, Real Estate is a/it’s a pretty precise market believe it or not, people sell, whether they’re bank, or shortsales, whatever, in about market value. People buy about market value. So you need to just, whatever market value is, that’s what you need to offer the property. These games of offering less than what’s listed for, even if there’s/you know, if it’s listed $10,000 under market value and there’s multiple offers and you’re still insisting you’re gonna offer less, because if you believe if you pay more than that price you’re overpaying. It’s stuffs like that makes the price ranges of properties all over the
place. And I can’t imagine what would it be like if Real Estate agents weren’t involved. Like if your just/home sellers pick prices themselves, I mean it’d be crazy. ’cause you know, I just can’t imagine how bad that would be so. There needs to be a buffer in there. Unfortunately, the Real Estate agent is that person. So anyway, please please please, 2 things you have to remember: 1 is, all the whatever you’ve heard about the 1st quarter, 2nd quarter, ’cause actually what we have going around here locally is the opposite. The inventory’s gonna be gonna because the State has made it hard for banks to foreclose, prices are gonna sky rocket in the 1st half of next year because the inventory’s gonna disappear, which is also a myth, right? And I’ve talked about that so, you can’t just sort of, pick the worst case scenario and use that for planning. When you buy Real Estate, just assume prices are gonna stay the same. It’s the best way to do it. The 2nd thing, look at market value, forget the list price, it doesn’t mean anything, it doesn’t mean anything! It’s not a/there’s no obligation for them to sell a less price. Okay? All that list price is an invitation to make an offer. Sometimes they do it low to/’cause they have a short time frame, shortsales or something like that. They just need to get offers in. And then you know, they’re just trying to invite more people to write offers. Prices/That’s priced low, it’ll tend still to sell market value. So anyway, that was my update. Hope it was informative and hope to see you on another video. Thanks!