Following up on my recent entry “Stop Whining!” I thought it would be helpful to point out some of the vitality in the greater economy. Of course, you’re not going to find this in too many news outlets: Even my favorite newspaper, the Wall Street Journal, put it in Section C way in the back:
Visa’s Debut Pops 28%. Record U.S. IPO Nabs $19,65 Billion; Lots left on Table.
That’s right, folks. Almost $20 BILLION from investors today, with much more to come. In fact, the bid UP the price – from about $44 to start to around $55 at the close. But don’t tell the Fed, because that will undermine the general desire on the part of politicos everywhere to cast the investor as a stupid, unsophisticated spendthrift who is just plain mean because he won’t invest in undervalued, overrated, unsecured, high-risk mortgage instruments. Of course, Super Smart Uncle Sam will, because, well, if he loses his shirt, it’s not his money anyway. He can always just tax the citizenry more, anyway.
How can REALTORS take advantage of this great news by Visa? Tell their buyers about it – to underscore the strength of American economic fundamentals. And point it out to their sellers, to underscore the concept that buyers are willing to pay a lot for value, but not more than something is actually worth. This should help with the “but we think it’s worth $50,000 more than your market analysis says!” argument from sellers who insist on overpricing their homes. Show them the Visa article and remind them that buyers set the price of their home, not sellers. If they percieve the value as less than your offering price, you’re going to have an IPO with no investors. When the value is good – just like Visa – they might even pay more than you’re asking.
In fact, next time you do a Comparative Market Analysis, or a listing presentation, log into the internet and show a few real-time data points; Where is the market today? What’s the trend curve for mortgages in the last 30/60/90 days? Display the current inflation index. Show these market forces, on screen, to sellers, so they’ll understand that their homes’ values are subject to much greater forces than their personal emotions and pricing whims. Use your laptop to call up the prices of a stock they currently own; then ask them what their stock broker would say if they tried to get the broker to sell their shares at 25% above currently selling levels. If their stock broker would laugh at them, why do they think their real estate broker wouldn’t laugh at them either? If they insist on still overpricing it, leave as soon as politely possible. You can always find the buyer and come back after another agent has tried to sell it for months and is desperate for any bid just to lose the expense albatross.
Thanks, Visa! You’re teaching the real estate industry how to price homes!