Irresistible Force vs. Immovable Object

Remember the following paradox no doubt posed to you at one time or another:

What happens when an irresistible force meets an immovable object?

One of the answers proffered by many philosophers and scientists is that there is no answer as the two concepts cannot coexist.

I pose a similar question to you with respect to the current real estate market:

What happens when a seller brings a property to market based subjectively on desired return and buyers believe any price is too high as this is, after all, a "buyer's market"?

The answer is simple: the two cannot coexist.

My point is that while it is unfortunate for sellers that we are in one of the most depressed real estate markets on record, a property must be priced objectively based on current market conditions. Of course, there comes a point where a party simply cannot afford to sell a property. However, more often than not, the selling party simply desires a greater return (or, in a worse scenario, desires less of a loss) than the market will bear. The irony is that, in overpricing a property, you reduce the likelihood of a maximum selling price. The most activity a property will see - either on the internet, or in person - will occur in the first few weeks it is on the market. After those first few weeks, the traffic falls off dramatically. While price reductions will help, many potential buyers will no longer have the property on their radar and/or will become skeptical as to its value. Buyers start to ask, "Why has no one bought this property? It must be overpriced or have serious issues." This will almost always result in a lower selling price than if the property was priced reasonably from the beginning.

With the above said, be wary of real estate professionals who agree to list your property at the price you suggest (or even higher) unless they support your price with objective analysis. This objective analysis should be contained in a comparative market analysis (CMA) and will include similar properties to the one being sold.

Conversely, while it is a "buyer's market", some properties are actually priced reasonably from the start and, in any event, there is always a price at which a property is a good deal. You cannot assume that an asking price is too high and that there is a dollar amount reduction, or percentage off the asking price, at which you are going to purchase the subject property. As is true for the seller, a buyer should rely on comparable properties to base an opinion of value. With that said, a property may be slightly out of your price range, or may only be worth a certain amount to you, at which point there is no harm in making a low offer. However, if you truly want the property and it is worth the price, you should make a reasonable offer. If you play the game too long, you may give the seller the impression you are not a serious buyer, or you may lose the property to another buyer. (I have actually seen some properties sell at or above asking price in recent weeks!)

In short, sellers want to sell and buyers want to buy. More often than not, there is a middle ground at which the two can strike a reasonable bargain.