August 20, 2005

Selling your house?

You need to know the magic words.

9 comments:

Robert said...

It is interesting the way individual psychology plays into economic decisionmaking. This drives the older school of economists nuts, but gives the younglings a bevy of thesis topics; we've lost sight of the fact that the original economists were very interested in the psychology of the individual.

It's true that anyone selling a house is "motivated", in the sense that they are open to the transaction. However, someone who is open to a transaction is someone who may have to be given incentives to participate, compared to someone who is yearning for a transaction. The words "motivated seller" in an ad tells the prospective buyer that the person they are dealing with does not have to be cajoled (whether with interpersonal sweet nothings or with money). They're ready to deal. That lowers the cost of the transaction to the seller, and means they will not have to engage in a lot of timewasting on the front end of the deal.

Wave Maker said...

I think "water view" works better.

crallspace said...
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Rick Lee said...

Freakonomics has an interesting chapter about words used in real-estate ads.

downtownlad said...

I don't buy this at all. I love my condo and want to live here for the rest of my life. But I just saw that the apartment above me sold for four times the price I paid for mine just three years ago.

So I'm not motivated at all. But I very reluctantly e-mailed a broker today to get a quote.

My hunch is that I won't sell, but if the price is right, how could I not?

Bruce Hayden said...

I found this interesting. I haven't managed to get the Freakonomics book from the library yet, but did read the section on real estate in the book store.

What I found really interesting was that if you are selling (or buying) your interests are somewhat adverse from those of your realtor. She wants to sell (or buy) as fast as she can, even if it means, as it often does, taking less than if the house sat on the market for awhile longer.

In a stable market, it may make sense. But I sold my house in Phoenix last year, and moved too fast. We put the price up $10k above what we thought it would bring, then took an offer shortly thereafter for $5k less. Within two days, I had two full price backup offers, and probably could have asked even more.

What the book didn't get into was the psychology of a house sitting on the market too long. You often see "price reduced" in those cases - which I suspect is akin to the motivated seller thing.

The thing is that that $5k was about three months costs of staying in the house. So, if I had had to wait another month, I would have been ahead the equivalent of the other two months costs. This is the economics that realtors don't want you to know - that in many cases the discount they talk you into is often worth 6 months or so of costs. So, if you sat on it for a couple of months, you would be ahead.

jeff said...

I got blessed (luck? no such thing) in the house that my wife and I moved into this weekend. It had been listed through two different realtors, the first one had it at too high a price, the second one wasn't very motivated herself...she'd schedule open houses and not show up.

Finally after dropping the asking price by $6k (and we got it for $2k under that), they did a FSBO... right when I had the means to pay for it.

sam said...
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nadia said...

Thirty years ago I had a vision - to create the finest real estate company in the world. What motivated me was the excitement of shaping an organisation that excels at every level. That still drives me today. abbotsbury