We’re in a market where the only people trying to buy houses are crazy debtors counting on their parents to provide the down payments, if our experience as sellers is anything to go by…
Yeah. We looked at some houses last summer that were clearly overpriced, one of which I liked very much, and the location was exactly what I wanted, but we couldn’t buy it at the price. After several months of looking, we found another house that didn’t have the great location, but it was otherwise nicer, and the price was right, so we bought.
The first house is on my route to church, so I see it every week. It has now been on the market for a year and a half…
We’ve been using that as our big negotiating point: “Here’s an offer at the low end of the market analysis, but we’re pre-approved for a standard mortgage, 20% down, and we’re ready to go right now.”
We’ve gone back to the overpriced house and told them if they can meet our price, we can close this month. The price we’ve given them is the maximum we can afford, so the seller is left with a guaranteed easy sale at a lower price, or gambling on a few thousand more turning up by waiting later. If the house was on the market 3 weeks, he should obviously wait, but at 8 months, he’s probably getting sick of it.
My gut says “yes,” but that could have no basis in reality. If they were real estate lawyers, I would be even more inclined to say “yes.” What you could be seeing is a professional spill-over effect; they’re professionals in one area, and think it makes them experts in all areas, which prevents them from taking a realistic offer.
Or not; I dunno. 
I think you’re on the right track with the overpriced house; if, after eight months, they’re still not willing to deal, then it isn’t the right house for you.
I thik this is simply a crazy market, in which no one knows exactly what any house is “worth” until it is sold. And sellers can have so many different situations/motivations, I think it is silly to get upset at any individual’s pricing strategy. Just either keep negotiating, or keep looking.
My daily dog walks take me past many houses that have been on the market for months. They seem to fall into two categories.
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The fixer-upper. Maybe that’s being too harsh, but these houses definitely have less curb appeal, so it’s likely they don’t look that good on the inside, either.
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The upper middle-class. These are houses that, while not out of character for the neighborhood, are at the higher end of it. They might be a five-bedroom colonial instead of a three-bedroom ranch, or have a larger lot, or something else that strikes me as making them higher priced. The really high-end houses seem to take care of themselves.
Based on this totally aribtrary analysis, I’d say that buyers are being more picky and less willing to buy more house than they really need, and that sellers who don’t put an effort into getting their property into top shape will have a hard time selling, even at a lower price.
I think that buyers tend to look at the top, or slightly above, their price range because they want to get the most bang for their buck. A lot of people put every dime they have into the down payment and monthly mortgage, leaving no money to fix up the place. So fixer-uppers only appeal to people who have money socked away and who don’t look at the top of their budget.
And, of course, at the other end of the spectrum are people who believe that a house with good bones should command top dollar, even though the kitchen and bathrooms were in style 25 years ago.