As you know we have been trying to purchase a home. We found one, made an offer, didn’t hear back, and then one week later the seller’s agent called and said they may like to accept the offer and they were hoping we would resubmit.
We did, and three days later we received yet another call: The seller had another potential buyer who would pay more than us. Bye, house.
The following day, yet another call: The other buyer fell through. Would we still be interested?
Fast forward to now: We discovered during an inspection some major foundation cracks that will continue to worsen unless we rip up all of the house’s surrounding concrete, lay new drainage, tear up some of the driveway in the process and then put the concrete back, tilted away from the home. I won’t tell you how much this can cost to do, but let’s say at least ten thousand, and perhaps even twice this much.
As we explained that we could not put this money into fixing the foundation when other things, such as a new roof, needed to be done on the home prior to moving in, we were told this by our real estate agent: “You’re lucky the seller came down this much in price. It’s such a great deal. I don’t think he will contribute to fixing this problem.”
Let me say, my brakes screeched to a halt, as did my husband’s.
Someone forgot to tell the agent this rule of thumb: Your product or service is only worth what someone is willing to pay.
I can tell you that my web designs are worth a million a pop, but if you don’t have that kind of money, and if others don’t, and if no one is buying, is my web design really worth that?
They could put a listing price on this home of $900,000, but if no one makes an offer or follows through, who cares?
I think at times that business people forget that in order to sell they have to have a product that is priced right for their potential audience.
If you are pricing your products or services too high, you aren’t going to sell your products or services, and then who cares what price tag you put on it?
Your product and service is only worth what the consumers are willing to pay. Price too high and you may as well save your time and investment money and not go into business at all.
As for us, we know what we can afford, and that doesn’t include a new drainage system around the house. And if that is the way it is going to be, then that is the way it is going to be. Like all consumers, we can only afford X amount for a home, and if the home costs X times 12, well then, we’ll gladly let it go on to the next potential buyer who can afford to put in the new concrete and the new roof (and the paint, and the flooring, and the, well, you get the idea!).