Seller’s Price Perceptions Cause National Uproar
In today’s real estate market, the refrain from Realtors is the same: “These sellers are living in La La Land (or Neverland). Everyone is thinking their home is worth much more than it is. We can’t get them to see the truth!” Alas, the “truth” is that this is an age-old problem that is not necessarily intrinsic to any particular market, but may be a little worse than normal in 2006-07. The history books are replete with examples dating as far back as the paleolithic period of neanderthal men and women chasing Realtors from their caves with raised clubs over a price dispute. This euphoric optimism of the common home seller has been studied by the American Medical Dissociation, and it has coined a neologism: Schitzo Prospectus Actualis Capitalis. (Editor’s Note: a break with reality concerning the expectation of material gain.)
The acronym, SPAC (pronounced “Space”), has entered modern parlance to speak of sellers with the disease. “Spacers,” as these unfortunates have become known, appear to be causing Realtors apoplectic frustration. But what is this disease, and how has it reached epic proportions?
One of the contributing factors of the disease appears to be neighborhood gossip. It is not uncommon for homeowners in a given community to keep each other apprised of the going rate for homes through the neighborhood grapevine. Our reporter asked a local homeowner to give her opinion of her home’s value:
WUSA Reporter: “What do you think your home is worth today, Mrs. Bon-Mot?
Mrs. Bon-Mot: “Well, the Pastiche’s place down on Maple Drive is very similar to ours, and his sold about a month ago for $525,000. It took him a couple of months to sell, the market being what it is, but it did sell. Now, our home has Teflon wallpaper, which his didn’t. Also, we have an above-ground pool that the kids just love. Oh, we also got a new air conditioner about, oh. . .ten years ago? Yeah. All these things add up! So, I would expect that we could get about $550,000, maybe $560,000.
Our intrepid reporter, after researching county records and the local MLS data, found the truth about the Pastiche’s sale:
1. The Pastiche’s home was 1357 square feet bigger that the Bon-Mot’s.
2. The Pastiche’s home was on the market with 4 different Realtors for a total of 296 days.
3. The Pastiche’s home was originally listed for $495,000, and eventually sold for $421,000.
4. According to MLS data, the Pastiche’s home had been extensively remodeled in 2002 including new floors, paint, pebble-tech play pool, and a new kitchen.
So, how does this information get passed along and corrupted? According to local specialist Johnson Smack of Swindle & Crouch Realty, homeowners hear what they want to hear: “It’s an ongoing problem. So and so tells so and so, and the story gets twisted until the guy down the street who sold a year ago had a dilapidated hut that sold for way more than it should have. We see it all the time. These ‘Spacers’ really need to get with reality.” How does Mr. Smack deal with these idiosyncrasies?
“I just show them the comps,” says Smack, “and let them see the truth. That guy down the road from you had a nicer house, and it didn’t sell for as much as you think it did.”
However, this revelation can sometimes lead to volatility, as our erstwhile reporter discovered. When revealing our own research concerning the sale of the Pastiche’s property to Mrs. Bon-Mot, she at first demurred. “No, that’s not right. Maybe you’ve got the wrong home. The Pastiche’s didn’t have all that stuff,” she said. When confronted with pictures of Mr. & Mrs. Pastiche holding a sold sign in their front yard that our reporters found posted on their former Realtor’s Website, Mrs. Bon-Mot became indignant and semi-politely asked our reporter to leave.
SPAC disease is challenging medical researchers across the US to find a cure that will enable the sluggish economy to regain its footing in the coming years. The housing sector is a major driver of the aggregate economy, and while home seller’s suffer from SPAC, things look grim. Biological chemists, psychologists, and even holistic specialists have been facing the challenge head on. “We have begun looking at different forms of hallucinogenic drugs to combat the problem,” says Dr. Mustapha Obslooke, a spokesman for I.G. Farben, “The initial trials have been giving our people an optomistic outlook. We expect that, after FDA testing this fall, we will be able to get help where it is needed most.”
According to department staff at the University of Tulsa’s Jung Research Center, electo-shock therapy and traditional prefrontal lobotomy do not seem to be the answer. One student researcher, on condition of anonymity, reported that “sellers just do not respond to this approach. After we get them cleaned up and wipe the saliva from their faces, their responses to our inquiries is just not adequate to suggest a significant change.” Researchers are now involved in removing parts of the hypocampus of sellers in an effort to combat the disease. The first trials of this new procedure have proven inconclusive, but there are reports of unexpected side benefits, notably an ease of irritable bowel syndrome.
Holistic specialists have had limited results in their treatments. According to Radiant Moonbeam, an independent practitioner of holistic medicine, her patients are having some success. “We really had hoped for better results, “she says, “but, until now, our healing herbs, along with a regiment of progressive muscle relaxation and sunshine colon-cleanse (patent pending) have only gotten a few thousand dollars relief.”
Specialists are still working on the problem, and may have new reports out this summer. Until then, the disease will have to run its course. There is some hope among researchers that the body’s own immune system will begin to fight back, giving new hope to the US homeowner, economist, and Realtor. We’ll keep you posted.
reprinted by permission of The Daily Bender