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Low fat milk and overpriced homes. What on earth do they have in common?

March 3, 2010

Low fat milk and overpriced homes. What on earth do they have in common?

Milk adI pulled into a gas station this morning and saw this sign. The more I looked at it the more confusing it appeared to be. The math just doesn’t add up, 1% milk has 69% less fat than whole milk? So why not call it what it really is? (If you really want to be confused, google low fat milk.)

So what does the price of milk have to with it anything anyway? Bear with me here, poetic license and I can’t pass up using milk for anything!

Yesterday a listing came on the market. I admit I laughed when I saw it. I had visited the home a few months back with another agent who wanted my price opinion. The home owners had done a tremendous amount of work but there was no way I could come up with a price that could recoup their funds. Surprise, surprise, the listing came on with a different agent at more than $100,000 over what I am sure it is worth.

1% milkSo how did this happen? Someone made the home owner think that he was sitting on something he was not. They were astute, picked up on the fact that the owner wanted and needed more money than the house was worth. Now it is being marketed as whole milk, when it is not that at all. (Not only is the price wrong, but the house has grown in size too!) If a potential buyer can be enticed to look at it, they, like me sitting in front of the milk sign, will be scratching their heads and moving on. And the home owner will be disgruntled in the end. Then there is always the appraisal issue, but I am not even talking about that reality here.

Reality is, believe it or not, that some companies promote the philosophy to take the listing at any price, then tell the home owner some sob story about the market tanking … excuse me?

So you see, low fat milk and overpriced homes DO have something in common! I for one like my milk raw and unadulterated, and that is exactly the way I do my market analysis too!

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