Home Selling in Fremont>Question Details

David Mitchel, Home Seller in California

Listing price advice

Asked by David Mitchel, California Sat May 18, 2013

Most homes in fremont are going 10 to 15% over asking. I heard some are even going 20%. I expect my home to sell for 650K . how much should I list it for?

Some suggest 599, others 600, still other 630. any advice?

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Dean Paul Dominguez’s answer
The final price paid on a home is determined by the willingness to pay of a buyer. To get a buyer to offer on your property, you should be conservative in pricing and then wait for an interested party to offer at or more than list price.
0 votes Thank Flag Link Sat Jul 20, 2013
Hi David Mitchel,

If you really want to know what to value your home, Email (rpablaza@comcast.net) or call (408-316-0793) your home address and I will do a BPO for your home. BPO's are done with the same principles as appraisals so you will get a very small ballpark for your valuation.

Thanks
0 votes Thank Flag Link Sun May 19, 2013
All your percentages are in relationship to your list price. You can price a listing at 15% less than market value and then claim you had offers coming at 25% above the list price. On the other hand, more pragmatic approach would be to list at market value and you will notice that the over bidding would be about 8% depending on the area and upgrades in the house.
0 votes Thank Flag Link Sat May 18, 2013
Why not price it at $635- 645? Do you really want people who can only pay up to 615 maybe, offering? Why tease the $599 people into thinking they can buy it? What good are 35 offers if most of them are below $630? What good are 35 offers if the people are only qualified to $650? Why waste everyone's time?

At a price close to where it will sell, you (but a little bit lower) you will get qualified people seeing your house, and a higher quality of offer. By higher quality I mean people with more money down, higher income, probably better able to absorb the difference if it does not appraise, approved to a higher loan amount, and a better ability to go higher.

By listing closer to the $650, you will get the people qualified to $700 looking at your house. At $599m you are going to get people qualified maybe to $650. Don't you want the people who can pay even more than $650 offering? Those are the pople I want offering - those with the ability to pay more, with more financial resources, who will stay through the contract, and who won't come back asking for repairs because they are so stretched financially.

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0 votes Thank Flag Link Sat May 18, 2013
You asked a couple of questions:

Q: Most homes in fremont are going 10 to 15% over asking. I heard some are even going 20%.
A: There is really no set percentage. It varies tremendously based on property condition, location, how realistic the list price was and so on.

Q: I expect my home to sell for 650K. how much should I list it for?
A: Michael is correct – go with what your list agent is advising. I’m assuming you hired them because you trust them as a professional with the knowledge and experience to get the job done. Without an address and property particulars, we cannot (and shouldn’t) provide you with a specific list price – that’s what you hired your Realtor for. The problem is that so often there is a tendency to listen to friends and family’s opinions over those of real estate professionals who do this every day for a living.

My #1 question is, “What are the factors leading you to the conclusion that you will get $650,000 for your home?” What kind of data are you using to get to his conclusion? Your house needs to be priced in line with existing comps. If previous comparable homes have been selling for less than $600,000, you should really analyze the previous comps and then, based on condition, location, amenities and so on, set your list price in keeping with the previous comps – perhaps a wee bit higher. To go much higher than the previous comps will communicate to buyers that you might be greedy and difficult to work with once you get into contract. Also, if you go too high, you will not get many offers and will not be able to effective leverage offers against each other. That can be a critical mistake.

One thing to consider: buyers typically set their search parameters at major price points. I'm in full agreement with Laura on this fact. If a buyer is qualified for $600,000, they will set their search for a maximum of $600,000. In the current market, most buyers recognize that it’s pointless to set their parameters any higher that they are approved for due to the effect of multiple offers driving the prices up. Therefore, if you set your price at $630,000, you will miss an entire segment of buyers (those limited to $600,000) who will never see your home.

Normally, you would think, “That’s OK, they can’t afford my house anyway.” However, in the current market, buyers frequently state they are only willing to go so high (as an example, $600,000) when in reality, they can often go higher, especially if it’s the only way to get the house of their dreams. The difference in monthly payments between $600,000 and $630,000 is actually very small (about $132.00 a month). Additionally, there are other buyers who may qualify for a lot higher loan but lack the necessary funds for the down payment. Many in this category can either change their loan (from 20% down to 15%, 15% to 10%, 10% to 5%, or even switch from conventional to FHA) to free up additional cash, or actually go find more cash. They can talk to family members, take funds from their retirement and so on.

Here’s the bottom line: many buyers aren’t willing to go to extra lengths to get a home until they’ve actually seen it and realize “they can’t live without it.” If you set the price at $630,000 and their limits are set at $600,000, they will never see it. However, if you set your price at $599,950 and their limit is $600,000, there is a chance they will see it, fall in love and then do whatever they need to do to make the numbers work to submit a competitive offer.

It’s a real conundrum: if you set your price too low, you’ll get dozens of meaningless offers from hopefuls who really don’t qualify. If it’s too high, you’ll get just a few and have no room to effectively leverage offers against each other. However, if you set it just right, you get a decent number of offers from serious players who will all work hard to pay top dollar and provide the best terms possible.
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0 votes Thank Flag Link Sat May 18, 2013
If I were your agent and I agreed with you on the value being 650,000 I would list it at that price.

If after I completed a CMA and Detailed Net Sheet I came up with a different value I would let you know but it is always up to my clients since it is their home, of course I would give my advice.

If my client wanted to list higher than I advised and I thought it was a reasonable request then I would take the listing, if not I would turn the listing down.

Good luck !
0 votes Thank Flag Link Sat May 18, 2013
Hi David,

If you already have a realtor that represent you. He/she should be able to show you the active. pending and sold (within the last 3 months) comparable in the approx 1 mile vicinity of your house. With all those information you will have a good idea on the value on houses with similar, bedrooms, bathrooms, sq.ft. and lot size than yours. That will give you a gauge on how likely you can get your house sell for 650K. He/she should be able to analysis and strategize with you using those most recent statistic and his/her real estate market knowledge and experiences to produce the 650K end result for you.

I have to say every house is unique. Using the above statistic can provide you some base line on deciding on the price point. It will not be responsible for me to suggest an asking price for you without doing all the research on your neighborhood. There are still many factors that needs to be consider and it is too long for me to write them all out. Bottom line is pricing your house right is extremely important. The right price will produce multiple offer and short days on the market, as well as the 650K or more for you. Wrong pricing will end up having the house "sit" longer on the market and buyers will wonder why it is not selling and make up their own reasons. Good luck!
0 votes Thank Flag Link Sat May 18, 2013
I would list for $599K and let crazy market push the price up.Higher price will keep your home in market longer.Buyers are smarter in digital age and with the help of their agent knows what price the home can sell for in this market.Good Luck!!!
0 votes Thank Flag Link Sat May 18, 2013
We have to be very careful in setting list price...consider your pricing strategy. Remember that overpricing is still the biggest reason why properties don't sell.

If you price it too high, it won't move...and then you may have to do a price reduction. The trouble is, you'd lose valuable marketing time. The most critical periods is during the first two weeks of the listing.

If you price it too low, you may attract a lot of buyers and have multiple offers. And of course, they will be for over list price. But how valuable is your time in analyzing several offers, or do you merely want bragging rights?

Who are the "some" people you suggest? Whatever you do, interview at least three realtors. Ask them for their pricing strategy and marketing plan. Be aware when someone is "buying the listing" i.e., telling you what you want to hear, that your property could sell much higher than what others say.

If you look at various resources -- Trulia, Zillow, etc. --- you'll get different estimates your property's value. See: Common Errors on Real Estate Websites
http://www.bottomlinepublications.com/content/article/wealth…

Choose the realtor who has a sensible pricing strategy (and can justify it) and a robust marketing plan.
0 votes Thank Flag Link Sat May 18, 2013
If you think it'll sell for approx. 650k, I'd say keep your asking closer to that amount. 630-645k.

You really only can accept one offer, so with a higher price you may get better, quality buyers.

Brian
0 votes Thank Flag Link Sat May 18, 2013
I am not familiar with your comps but I am in a market of bidding wars. The last thing you want in a hot market is for your house to get stale. All the buyers will wonder why your house is on the market for over a week or two. It would probably be because its priced high.
I work with a ton of buyers. Most buyers look in quarters. Meaning either list your house at $600K or $625K. Antiquated agents think $599K sounds better but they forget in a digital age of Internet searching what if a buyer wants a house between $600K to $750K? They skip over your house. If you list at $630K you loose a lot of buyers up to $625K and our now competing with the $650Ks
Whatever you do , don't over price and don't range price. Price it well and you will get the bidding war frenzy. Good luck!
Web Reference: http://www.LauraCoffey.com
0 votes Thank Flag Link Sat May 18, 2013
What does your listing agent suggest?

We use a lot of ranges here in San Diego - don't know if you do that...perhaps $599-$649K.....

Price a tad bit low - that is how you generate multiple offers!

Good luck!
0 votes Thank Flag Link Sat May 18, 2013
We don't use value range pricing in Nothern California is was a disaster when they tried it and it failed here so that is why some but not all agents use a list low strategy sometimes I see them listed a $100,000 under market which I don't personally believe in but they keep doing it
Flag Sat May 18, 2013
If you are confident in the agent you are selecting to sell your home then you should go with what they advise since it is their marketing strategy otherwise you should consider a different agent. You need to work as a team and as I previously stated to you in your previous post my GOAL is to get YOU the seller the "Highest Possible Price" but you control the price based on the statistical information presented and I control the marketing and I always suggest we work as a TEAM it's not me against you or you against me we both have to be on the same page and I would expect the agents you are talking to would feel the same way in order to get YOUR home SOLD.
If you believe the market is strong enough to get multiple offers then I would error on the lower side of the listing price but if that's not a number you would even consider selling for then you should stick to something like $624,950 or $629,950 or maybe even $635,000 if it's NOT the right number you will know because you will have limited showings or the agent feedback will tell the agent who then will tell you and you will not have any offers or the offers will be for less than what you are asking. Buyer's have access to the same information you do as the seller so they are educated too so they know what to offer even when priced to LOW or Priced to HIGH ultimately your home sells for what you and your buyer eventually agree too and close.
Good luck and happy selling !
0 votes Thank Flag Link Sat May 18, 2013
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