Human nature is funny. How you feel about things depends on how you look at them. Attitude is everything.

There’s a saying in real estate circles that goes something like this: “You know it’s a fair deal when the buyers think they paid too much and the sellers think they got too little.” In other words, if everyone’s unhappy, chances are it was a fair deal. This is based on the premise that it’s not uncommon for buyers to think homes are overpriced and sellers to think their homes are worth more than they’re really worth. But sometimes one person’s happy and the other isn’t. And sometimes it’s not who you’d think!

In a balanced market, it’s not that difficult to estimate fair market value so it’s easier for buyers and sellers to know if they got a good deal or not. But in today’s market, when prices can be all over the place (see Pricing Madness), it can be difficult for buyers and sellers to tell if they got a good deal.

Take this situation for example: Before listing their home, the sellers asked a group of 5 agents for their opinions about their home’s fair market value. After looking at the home and discussing its pros and cons, the agents told the sellers that they thought their home would sell in the $1,650,000 to $1,700,000 range. The sellers, being the proud homeowners that they were, thought their home was worth a lot more and decided to list it for $1,850,000. After all, it was their home and they were entitled to list it for whatever price they wanted.

A couple weeks after their home went on the market, some buyers came along and offered the sellers $1,750,000. The sellers were unhappy with this price because they thought their home was worth a lot more, but they wanted to sell so they accepted it. The buyers, on the other hand, were happy because they were able to negotiate $100,000 off the list price.

Can you see how ridiculous this is? Instead of the sellers being unhappy and the buyers being happy, the sellers should have been the happy ones because the price was significantly above fair market value and the buyers should have been unhappy to have paid more than fair market value for the home! But it’s all about perspective.

To make sure YOU keep things in perspective, it’s vital to understand prices, especially in a market like this. It’s the only way to determine the best list price when you’re selling and the right amount to pay when you’re buying. If you haven’t already, do yourself a favour and read Understanding Prices – Master Class and Pricing Options. That way, you’ll know when to celebrate because you struck a GOOD deal and you’ll know that being unhappy with your deal likely means that it’s a FAIR deal and not something about which you should be upset.

As always, if you know of anyone who’s looking for an honest realtor who really knows his  stuff and won’t pressure them, Please Don’t Keep Me a Secret. I really appreciate your referrals. Thanks for reading and don’t be shy if you have any questions or comments!