Price declines being consumed by higher interest rates?
Interesting tidbit in the Seattle Times today that brought to mind an interesting question:
http://seattletimes.nwsource.com/html/r ... es150.html
I wanted to focus on one comment from the president of the Washington Realtors though:
Now this has been discussed before on the blog:
http://seattlebubble.com/blog/2008/07/1 ... #more-2153
It seems if I were in the Realtor position at the moment (and I'm not a Realtor obviously) and representing the seller, that the logical way to move more sales volume - and maximize my compensation - in the face of increasing interest rates and increasing inventory available for sale, it would be the best strategy to convince sellers to price their properties appropriately and if interest rates go higher, ask the seller to make further pricing cutbacks. However, instead it seems the person who represents the Washington Realtor Association advocates a different view, she seems to think it is better to scare the potential buyers with the interest rates are rising argument and cost savings due to price cuts won't be realized by the buyer anyway.
So my question - does this sales approach make any business sense in today's prevailing environment? If so why? If this sales approach doesn't make any business sense, why do we continue to see these sales tactics being pursued instead of replaced with more effective ones?
Thanks for reading,
Lanny
http://seattletimes.nwsource.com/html/r ... es150.html
I wanted to focus on one comment from the president of the Washington Realtors though:
Declining prices don't necessarily help many buyers, said Jan Ellingson, of Burlington, Skagit County, who is president of Washington Realtors.
"Much of the savings in prices was consumed by higher interest rates, leaving buyers frustrated that they are not benefiting from price declines as they expected," she said.
Now this has been discussed before on the blog:
http://seattlebubble.com/blog/2008/07/1 ... #more-2153
It seems if I were in the Realtor position at the moment (and I'm not a Realtor obviously) and representing the seller, that the logical way to move more sales volume - and maximize my compensation - in the face of increasing interest rates and increasing inventory available for sale, it would be the best strategy to convince sellers to price their properties appropriately and if interest rates go higher, ask the seller to make further pricing cutbacks. However, instead it seems the person who represents the Washington Realtor Association advocates a different view, she seems to think it is better to scare the potential buyers with the interest rates are rising argument and cost savings due to price cuts won't be realized by the buyer anyway.
So my question - does this sales approach make any business sense in today's prevailing environment? If so why? If this sales approach doesn't make any business sense, why do we continue to see these sales tactics being pursued instead of replaced with more effective ones?
Thanks for reading,
Lanny
Comments
Now, I'm in on the deal but I know the place is overpriced; it won't sell. What do I do? I could go work real hard to find buyers, and slowly convince the seller to be realistic. But maybe it's easier to scare buyers into spending first and thinking later. I mean, it worked for the last 4 years it's certain to work this time right? RIGHT?