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How To Deal with Sticker Shock933

Belew private msg quote post Address this user
Why does everything always feel like it costs more than it should?

My wife got a new job that she thinks she will settle into very long term.

To ease the commute we thought we might look into moving.




Not happening. Turns out that her office is right smack dab in the middle of the hunt for ALL Stanford University and Stanford Hospital employees.

Add to that ... ALL of Facebook employees ... as that company grows and more and more people are looking to settle in the same area.

Add to that ... the Chinese who will buy properties sight unseen, all cash, no contingencies.

We can't compete with the sticker prices. We can't even get on the same field.

How to deal with some serious sticker shock.

Run! Run! Is all I can think of, unless you have a better idea.

Do you?
Post 1 • IP   flag post
dono2081 private msg quote post Address this user
The first purchase is the hardest. After that, you're in that micro-economy and a rising tide lifts all boats.

-D
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Belew private msg quote post Address this user
@dono2081

We could make a killing on our house. But it's not enough for us to compete with the buyer market in our target area.

We could see our house for a hefty profit...but then we'd have to move to Indiana. Then I'd be in Indiana!

Still...we have a home. And are grateful for that.
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dono2081 private msg quote post Address this user
First, lets assume you have the means to do this, then ...

Sell your house
Add some cash on top to the proceeds
Buy in Palo Alto
Ride the wave of appreciation over the next 10 years.

Do that analysis and see if your rate of return makes it worth the extra cash on top investment, or not.
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Belew private msg quote post Address this user
@dono2081

Indeed those are the number crunching we have been / are doing.

The more basic question I intended to ask here is, "Why do thinks always/usually seem to cost more than they are really worth?"

Are they (insert item or service) really worth more than I am willing to pay?

Is the cost too high? Or do I think too cheaply?

We marketers face the same conundrum. What we charge is often in conflict with what people want to pay.

What's the best strategy or mindset to bridge the gap between what to charge/what I am being charged and what people want to pay/what I want to pay?
Post 5 • IP   flag post
dono2081 private msg quote post Address this user
1) Because you have lived long enough to experience inflation.

What was 25 cents* is now $25. It's the way a market economy works. Everything creeps in price b/c greed.

2) Bridge the gap -- craft the value proposition that says "this is worth more than the $." Costco is lauded for being "cheap," when in fact most items there are $10 and up. The value is in the large quantity, "I get this much for this price? Wow."

Plus the free samples. Always good to have free samples.

-D

*Shave and a haircut, two bits.
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PatS private msg quote post Address this user
Consider that if we don't get some rain soon, all of our properties could be worth next to nothing. The prices in the Bay Area are tragically inflated, which creates a feeding frenzy. But I am concerned that we are living in a bubble that could pop at any moment. If your house is paid for, it may be worth staying. At least you'd have a place to live, even if you have no water...

But then, the commute will only get worse too. If it weren't for the weather, it simply wouldn't be worth living here. But there is the weather. (Our possible move is to Houston to be near the grands. Ugh!!)

Blessings as you evaluate...
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Belew private msg quote post Address this user
@PatS Thanks for the encouragement and perspective.

A more general question that I was trying (unsuccessfully) to ask and was using housing prices as an example ...

Why is there a disconnect between what people want to pay for something and what people want to sell it for?
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PatS private msg quote post Address this user
Well, we always want a good deal... And we want to buy the intrinsic value, not the market value.
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Rev private msg quote post Address this user
@Belew

(see also my post in the other thread about negotiating)

I think that vendors are most often the cause of this disparity. They expect to have to negotiate down so they set their price high. Purchasers come to expect this and figure any price is artificially high as a result. They negotiate down. Rinse and repeat.

It's a mind set. When you don't get into that game, when you don't negotiate, when you become known for delivering value at a fair price, when you believe in, espouse, indeed practice, win-win, then it all goes much more smoothly.

The problem is, of course, when you are the first one adopting this practice in an established, and rising, market, it is all but impossible to succeed. You need to abandon the idea and pay the price, or hold out longer.
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Belew private msg quote post Address this user
@Rev

I don't know how many times people have finally ended up talking to me AFTER their money has been spent on people who in the end didn't deliver.

"I really need this, but I don't have a budget."

Arghh...
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Rev private msg quote post Address this user
@Belew

I get that from time to time, too. My stock answer, "Keep me in mind when you do have the budget again. I would love to make this work for you."

It's surprising how many suddenly find the budget they thought they didn't have.
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@Rev

I have come to using the phrase very early on in my talks, "Do you have a budget for this?"

I don't know how much time I wasted learning this lesson ... or how much time I have saved since I started using this question. 8-)
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