A few days ago, I noticed that my realtor who was somehow close to me put up pictures of houses and properties he sells, just like he always and I discovered that these were the same houses he has been marketing for almost a year now and nobody was buying it.
Just a few years back, he sold houses like crazy and closed deals easily, but it has increasingly become very difficult to sell these houses especially the ones that were a bit pricey.
He was actually established and doing well financially, but he has to keep closing these deals to keep making money, and while I don't really know how much deals he closes daily, I don't think it's been that that bad for houses to be on the market for so long and no one is trying to buy it.
So here's what's generally happening.
These guys decide or determine the value of a properly simply by using the structural value and location, while ignoring demand. I mean, price should plummet if demand is low, except my economics knowledge is bad, or this isn't the same for every commodity.
Secondly the properties are overpriced, and lastly the owners are greedy.
Real estate was the hottest prospect and should supposedly continue to print money for realtors, but this will continue to be true of the cost of running businesses are modest for the people who are supposed to be buying these properties.
Even the people who are buying these properties and using them for housing, their business are not going as good, it all revolves around the fact that cost is extremely difficult and people are not making money as well as they should, so affordability becomes a huge issue.
So basically the purchasing power of a potential client is always underrated or poorly considered by realtors and this is simply because they think their valuation is final, and even when the properties spends a lot of time without being sold, that reduce maybe 0.2% of the initial cost after a few years and the property didn't sell.
So affordability, demand and purchasing power are often not considered and this makes properties stay for years without it selling.
This wasn't the case a few years ago. In a functional economy cost is not a problem, the purchasing power of people is the most important thing. For example you can easily make money selling stuffs in an area where everyone is not bothered about cost but value.
There are people who do not care how much a Product or service is, if it basically meets the "value" requirement they have, they're going to buy it because they understand that it brings potentials that can yield crazy dividends.
But if a realtor for example is selling a property and they're not selling it because of its proposition of value then it's simply difficult to get anyone to buy it at an unbelievable price. I do believe this is the biggest mistake of real estate business in my side of the world.
You cannot convince people to pay if they have and are already willing to pay, you cannot sell market a product that doesn't bring crazy value, not just resell but potential value. When this is not possible then these guys prefer to have no functional businesses for years simply because they are not weighing their properties for the right value.
I believe whatever is not in demand has the potential to lose monetary value, but these guys thinks tome can fix it. They Believe a buyer will eventually come for the overpriced commodity, even though they know the price is not equal with the value requirement, and this is something time cannot fix.
When you're selling by just letting your emotions help you set prices, I think this means that making sales becomes absolutely difficult or impossible. It's a great market and I understand that land because of how it's always in need will always sell, but it has to deliver a value.
I think this is why audience targeting is also something very important. There are realtors that targets only millionaires and billionaires, and that's because they call themselves A-list realtors and sell properties for wealthy folks alone. Guys like this are the ones that makes infinite glitch money because their target audience can afford to pay.
I think if I have money I can pay any amount for whatever serves me real value, and I think anyone else would, and affordability is what actually ensures this.
