Home Buying in Brisbane>Question Details

William Ng, Home Buyer in San Francisco, CA

Why the difference in price between these two homes?

Asked by William Ng, San Francisco, CA Fri Mar 9, 2012

A. http://www.trulia.com/homes/California/Brisbane/sold/841000-…
This home is listed for 440K, 2500 sq 2 units.

B. http://www.trulia.com/property/3057796259-212-San-Bruno-Ave-…

While this home is listed for 640k, 1770sq 1 unit.

They are across the street from each other. Why is the bigger house going for less than the smaller house? What am I missing? What should I be looking out for in the future if I see properties like this?

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Answers

3
Ron Thomas’ answer
This would be the place to start:

LISTING PRICE
Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.

Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”

Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)

Different Banks have different philosophies about pricing their properties: You cannot draw any conclusions without a good analysis.

Have your Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. It is the surest way to determine the Market Value of the property.
1 vote Thank Flag Link Fri Mar 9, 2012
1. Compare actual sales not asking prices.
2. Compare features that drive price. The homes have many differences you can see.
3. As the realtors noted: listing prices are intended to gain attention.
0 votes Thank Flag Link Fri Jan 22, 2016
Ron is absolutely correct. Listing price is meant to attract offers. Value is not determined itself by listing price alone but the market sales comparables in the area. In short I have seen listings start at $290k and sell for $500k because that was the value in today's market.
0 votes Thank Flag Link Sat Mar 10, 2012
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