Home Selling in 95128>Question Details

Ron Nagahaara, Home Buyer in windsurf

How do I set the sales price of my house?

Asked by Ron Nagahaara, windsurf Thu Dec 18, 2008

One realtor who has 20 years experience, says to price it low, and let buyers bid it up. I am under no obligation to sell. I am curious about opinions on this strategy.

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Answers

17
Andrea Wince ~ Lic. 01439761’s answer
HI Ron, if you haven't sold already, I recommend that you have me run a sold comparable report for your neighborhood. This will tell you what other homes have recently sold for. Home prices in the Bay Area are on the rise so now is a great time to sell. I recommend pricing your home a tad lower than today's fair market value based on recent (last 3 mos.) closed sales. Inventory is low and you will likely receive multiple offers which could drive your price up even higher. I see your zip code of 95128 central San Jose. If you happen to be anywhere near Santana Row you are already at an advantage. Kind regards ~ Andrea Wince ~ RE eBroker Inc. ~ Lic. 01439761
0 votes Thank Flag Link Wed Mar 13, 2013
You are correct. there is a strategy.

If you want to get an idea for yourself, you can personally research the sales of property in your neighborhood using online resources like mlslistings.com and get a general idea. Factors such as inventory, schools, etc. will affect the price as well.

Your realtor can provide you a guestimate of what you would net after all the costs depending on your list price so you can have all the information you need to make a decision as to how much to sell your home for if you do want to sell it.

Your realtor can do all this research for you and should be your advocate through the process.

Feel free to call me if you have any additional questions.

Have a great day.
Web Reference: http://www.bahiafear.com
0 votes Thank Flag Link Thu Jan 30, 2014
The market conditions have changed since the time you originally posted this question. Nowadays you don't really have to price it too low. Just price it slightly low and you will get a massive rush of buyers jammed into your open house and stacks of offers early the following week.
0 votes Thank Flag Link Wed Mar 6, 2013
Hi Ron

Prudent to work with a Realtor who understands the market and trends.

You can also consider a Professional Appraisal.

Best regards
Perry
Web Reference: http://www.ruthandperry.com
0 votes Thank Flag Link Sat Feb 23, 2013
It depends on the situation, but yes, one good strategy is to set the price low to encourage lots of buyers to stop by and take a look. If multiple buyers like your property, they will bid it up. If 1-2 buyers put offers, then the listing was reasonably priced.

It is correct that you are under no obligation to sell.
0 votes Thank Flag Link Fri Jul 6, 2012
I read all these postings and agree with agents. I do things a little different. All my argument is based on data and I do not interject feelings into it. This works in an area where most home owners are techies.

During interview, I ask reasons for selling, commission etc. Unlike other agents who compile a recent CMA
and use past data to assume the future, I have a regression chart going back to 1998 and extrapolate in dotted lines for future. It comes with a formula. Most people will accept the analysis and expect there is
further trouble ahead. The future may be much worse than the past as job loss can be staggering. This is another way to suggest a realistic price (works same as chase the market).

Currently, we are in a steep declining market, assuming it takes 114 days to sell a typical I project the price to 114 days later. Now that is the price it might get. I also show the number of depressed homes competing with the so-called next listing and how long they have been on the market.

By showing the following data, I ask the client where he/she wants to be:
Sine Dec 1 we have the following:
New Listings 1561
Price Increase 93
Expired 878
Price Decrease 2066

If the seller still wants a certain price based on other reasons. (e.g. They like a 1.5 mil home and count on the equity as down payment etc.) They need to price it the way analysis suggests and have homes look to its utmost attractive condition. If the sellers are not interested in your suggestions, may be it is time to excuse you and let others take a pot shot.
0 votes Thank Flag Link Sat Dec 20, 2008
Hi Ron,
There are 3 different ways to go in listing your home:
1) list below market and let the buyers bid it up, you would have to be substancially lower for this to be effective in this market at this time.( your best bet is wait until the interst rates go to 4.5 percent, or after the year end say the end of Jan, begining of Feb as most buyers are waitng for Obama to get in and are looking after the first of the year).
2) Price it as comparable to other properties, this works if you have a very fixed up home with good schools and a good neighborhood, other wise you risk sitting on the market and if it over 30 days you rarely get a full priced offer as buyers are looking for a deal and you will receive low ball offers if any.
3) Over price your home and have it sit on the market for months and months with no action, in which case you have to keep lowering the price and if you do get any offers the will be "low ball" offers and you either take what you can get or your listing expires and have no sale.
Those are your choices, I have had sellers who still think we are in a sellers market and price it high only to have it sit there with no showings and open houses where no one shows up dispite heavy advertising.
You have to decide if you WANT to sell your home or if you are just listing it to see if you can get your price.
If it is the latter you have a very small chance of selling your home unless it is in a VERY desired location.
I hope this helps, if you have any more questions please feel free to email me at allyson@homesbyallyson.com or call me at 408-705-6578 Iwould be happy to assist you.

Allyson Alessandrini
Prudential California Realty
(408)705-6578
Allyson@homesbyallyson.com
0 votes Thank Flag Link Fri Dec 19, 2008
Hello Ron,
I have a client who listed a very beautiful home in the Berryessa area of San Jose. At the time of listing the property was not too far off from the price (a little above comps.
Well, as we all know the market has went nowhere but down since. ...
He made it clear early on, he was not willing to chase the market.
He is letting the listing run out and thats all he is willing to do, this does not bother my client, he said he would absolutely relist with me when the market changes, but for now my sign is on the property and I am getting lots of activity from this sign and he knows it.
He even jokes that these clients I am getting from the sign and flyers, are his referrals to me....
My advice is, if you chose to list, make sure you know your goal, and make it clear with your Realtor.
If you are not comfortable pricing it low, and are advised to, don't make a choice outside of your comfort zone.
I just took a class that advices, we were born with two ears and one mouth, thus meaning we need to listen twice as much as we speak.
If I could help, please feel free to call or e mail.
Denise Stuart
Coldwell Banker
408-893-3400
0 votes Thank Flag Link Thu Dec 18, 2008
Ron
I am puzzled by your question.
"I am under no obligation to sell". Does that mean that you'll sell if you get your price?

Below is the Trulia link to your market stats. The Median Sales price is down 18% compared to last year. So why ARE you THINKING of selling?

There is one essential for getting the most money for your home when you sell. YOU need to be motivated to sell. You need to have a reason to move, and the reasons need to outweigh the cost of the sale. If you do not have a big enough "why" then what is the point in putting your home on the market just to see if you can get your price?

I read quite a few posts like yours and I wonder what sort of Realtor would take a listing in a strong buyer's market with a seller that "would like to sell" as opposed to "needs to sell". Is your goal to sell your home for more than market price? If it is, you should know that with tightened lending underwriting guidelines the chances of that happening are zip.

So that brings us back to the question of the reason you want to sell. The ONLY homes selling in a buyer's market are the properties that present the most value. The easiest way to provide buyers with value is to price it right. The buyer that first sees the home they buy sees it with a Realtor 90% of the time. Because Realtors know values, an over-priced listing will not be shown, particularly when there many other listings more worthy of their time.

So the ONLY way to get market value is to price your home slightly under market. It needs to be properly prepared for sale, properly marketed exposing the values that buyers are seeking, and priced right.
0 votes Thank Flag Link Thu Dec 18, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
If I personally didn't have to see in the current market, I would carefully look at all the active comps in my neighborhood to see the current competition, and look at all the sold comps from the last several months. Interest rates have come down recently so even if you price where the last solds were the buyer is actually getting a better deal. If the current actives are under the last solds you may need to price lower. If the current actives are short sales and yours isn't, then you may be able to price a little higher than those as your home should have a normal escrow and close earlier. There is a little more work to doing it this way then just throwing out a price $50k under the last sale and brining in one or two offers, but hopefully it pays off for you.
Also if you don't really have to sell consider refinancing to get a low owner occupied rate, then rent out and get another place:)

Glen Mitchell
Real Estate Broker
408-497-1838
Web Reference: http://www.maui4rent.com
0 votes Thank Flag Link Thu Dec 18, 2008
Ron,

Unless you are in dire need of selling your home, (and you state you are under no obligation to sell) I for one really do not like this approach. I would only use this approach if I had a distressed sale or a dire need to sell a property in a highly competitive area.

I feel that the best way to sell a home in a declining market is to price it at or slightly below "Market Value." If you don't do that, you run the risk of chasing after the market and no seller really wants to do that! Sort of like the dog chasing the car and trying to bite the tire (what was that dog thinking anyway?)

Every seller obviously wants to get the most money for his or her property. Ironically, the best way to do this is NOT to list your product at an excessively high price! A high listing price will cause some prospective buyers to lose interest before even seeing your property. Also, it may lead other buyers to expect more than what you
have to offer. As a result, overpriced properties tend to take an unusually long time to sell, and they end up being sold at a lower price.

Often I am looked at with disbelief when suggesting to set the ask price at or below fair market value, because human nature tells us that to get "the highest price," you have to ask for more and then negotiate down. An analogy is like when you see a bear in the woods and feel an urge to run. Human nature (instinct) tells us we should run! (Bears run about 30 miles an hour and can catch you in no time flat.) My advice would be to not try to outrun a bear!

BOTTOM LINE
It appears you are not comfortable with the advice this "one Realtor" gave you. If that's the case, you need to keep looking until you find a Realtor with whom you are comfortable. I would ask each Realtor the same exact question you posted here and listen to their responses. I would certainly not use their response to this question as the sole indicator of their credibility.

IMPORTANT
And then, once you find that Realtor you are comfortable with, hire them and then LISTEN AND ACT on their recommendations!
0 votes Thank Flag Link Thu Dec 18, 2008
Ron, Your agent should help you determine the appropriate list price for your house. The most important information is the price that all comparable houses in your area have sold for over the most recent period of time. In this market, much more than 90 days may not be relevant. It is not always possible to do so, but your agent can try to learn the sale price for any properties that are currently in escrow. That is the most current information. You will then look at the similarities and differences, pros and cons, of your house vs. the others. From that point, you will have a good idea of a price. My advice is that you try to jump in front of the others with a more aggessive list price. Cause the buyers to want to see your house. When they get there, be sure that it is in its best possible condition for showing. Good luck!
0 votes Thank Flag Link Thu Dec 18, 2008
Ron

Your agent knows what he/she is doing.

If you price it even $5K too high no one will even look at it.

You also have to be realistic about where your home will finally sell. Look at your competition. Look at what is selling and get your house in line with that. [If gorgeous remodeled homes are selling - make yours gorgeous and remodeled. Fixers normally sell at bargain basement prices and may be driving your market, so keep that in mind.]

Let your agent do his/her job - that's why you hired him/her.

R
0 votes Thank Flag Link Thu Dec 18, 2008
The market shifts presently are bringing out buyers looking for a "deal" or a good price on a home. If you want an offer or multiple offers right away, set a list price below the market value and allow the market (the buyers who are willing to buy right now) to set the value.

The true market value of the home is the amount someone is willing to pay in today's market. You can be guided by the amount people have paid for homes that sold recently.

You can think about it like cars to make it easier in your mind. If 20 Toyota Camrys are on the market with 50,000 miles on them and most are priced around $5,000 and they are all available when you want to sell yours -- if you price yours around $4,200 you will get calls, people looking, interest, and you'll sell it more quickly than if you price yours at $5,500.

One factor to consider is the number of days on market of homes now available, that are like yours, in your neighborhood. So I look not only at comparable sales but also how many homes like yours are on the market and at what price?

For instance, if about 20 homes are at $699,000 and they are all three-bedroom, two-bath homes feeding to the same schools -- then a list price that makes sense in today's market could possibly be $650K range.

The buyer who chooses your home is likely guided by a realtor who will show them comparable sales prices too, and the buyer will offer what they believe your home is worth.

Some realtors say you can't price it too low -- that the market will always play out and you'll always get an offer that is what people will pay right now. Multiple offers are still happening for homes that are priced low.

Now, more factors are at play, and a realtor who knows what they are about will come through your home and look at the condition, remodeled status, kitchen, baths, general maintenance, quality, those sorts of things to factor in against the comparable sales and current list prices.

Another thing that I like to do if my client prices low to let the market determine the value is add the sentence "seller reserves the right to refuse all offers" so that the market can play freely. The seller does not have to sell if he or she changes his or her mind, prior to going into a contract.

Good luck!

Erica Nelson
EricaNelsonEstates@gmail.com
http://www.ConnectRealty.com/EricaNelson
408-416-7090
0 votes Thank Flag Link Thu Dec 18, 2008
I'm not clear if "pricing it low and bidding it up" is the right approach for the current market. A local RE professional would have the best insight for this.

The information is out there to be able to assign a price that is in step with the current market trend for your specific location. Our recommendation is to contact three agents for the purpose of reviewing the possibility of listing your home. As them each to be prepared to offer a CMA that is an accurate reflection of this market and one that will sell your home at a "fair price".....not a give away.

Also make it aware to them that you want them to be able to review their comprehesive marketing plan for your home relative to how they market themselves, market the product(your home), and their company marketing philosophy.

Be clear the they will be expected back up their information with solid data, facts, recommendations, etc.

We seriously doubt any of these individuals will take the position of "pricing it low, and letting buyers bid it up."

Good luck, we hope you find this information helpful.

The Eckler Team
Michael Saunders & Company
billeckler@michaelsaunders.com
941-408-5363
0 votes Thank Flag Link Thu Dec 18, 2008
The best way to set a price for a home is have agent run all compatibles done on sold in the past 6-8 months, whats on the market how long they have been listed, Number oh homes pending and in back up.
Also with First team we would run a program called Market Trends, where we have a broader CMA.
Good luck, Price your home to sell and not sit.
Web Reference: http://www.janetdeperry.com
0 votes Thank Flag Link Thu Dec 18, 2008
The best way to set a price for a home is have agent run all compatibles done on sold in the past 6-8 months, whats on the market how long they have been listed, Number oh homes pending and in back up.
Also with First team we would run a program called Market Trends, where we have a broader CMA.
Good luck, Price your home to sell and not sit.
Web Reference: http://www.janetdeperry.com
0 votes Thank Flag Link Thu Dec 18, 2008
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