Home Selling in San Jose>Question Details

Bay_area_ll, Home Buyer in Oakland, CA

Would it be worth listing at a much higher price than recent comps?

Asked by Bay_area_ll, Oakland, CA Tue May 1, 2012

I need to get about 40% higher than recent comps when I sell. there is like no inventory since so many recent comps are short sales. Think it Would be possible? Im sure that there are buyers looking for a house like this but the current prices are unrealistic.

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BEST ANSWER
Thank you for your question.

Your house will not sell for more than the current market value.

If you need a value that is 40% more than the current market value, I recommend that you wait until the market has appreciated 40% and then put your house on the market.

If you put your house on the market at a price 40% more than the current market your house will rack up a large number of "days on market" or "DOM"

The "DOM" becomes part of the listing history of your house. That stays on your record for 10 years.

If you have a large "DOM" that stigmatizes your house. I and most of my colleagus look at the listing history of the house. If we see that at one time that house was on the market and did not sell, that is a big red flag to us that indicates that there may be something very seriously wrong with that house and I and many of my colleagues will not show a house to our clients if we suspect that there may be something seriously wrong with that house

Even in a hot market like the one that we are experiencing now, an overpriced house will not sell.

I recommend that you do not stigmatize your house with a long history of "days on market" when it did not sell.

I recommend that you wait until the market has appreciated to the value that you want, and then place your house on the market. You will get more money for your house, and much better results if you will do that..

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
DRE#00901872
1 vote Thank Flag Link Wed May 2, 2012
No! A reasonable buyer will not pay 40% more than the comps. Even if they love your house it will have to appraise. 40 % above market value will not happen. So in reality you are looking for an all cash buyer who loves your house so much they will pay 40% more than a reasonable buyer will pay. Very unlikely.

Jim Mauldwin
Intero Real Estate
408-863-3020
DRE # 01125280
2 votes Thank Flag Link Tue May 1, 2012
According to ucla anderson the median price in CA will be up 49% by 2016 so its only a matter of time. But if someone wants it now i would sell it to them.
Flag Tue May 1, 2012
I recommend you price lower than the recent comps by a good 20% and initiate a nice multiple offer scenario (i.e., feeding frenzy). This will push the market to its limit, and you can discern if the amount offered is enough to help you move. Regardless of your need, the buyer has the $ and determines the market value. Good luck!
2 votes Thank Flag Link Tue May 1, 2012
If you list your house 40% overpriced, then very few people will even bother to take a look. If not many people even look at it, you will not have a many buyers to bid against each other, if any buyers at all.

I would actually do the opposite. Price it lower and create a bidding war. Your listing will get max exposure and go up to the max price the market will bear. In just one weekend you'll see whether you got what you wanted. If you don't get what you need, you quickly take it back off the market and wait for a better time to put it back on.
1 vote Thank Flag Link Sun May 6, 2012
Even if there was a buyer that wanted to pay 40% more than market value for your home, the bank would not loan a buyer more than the home is worth. You mentioned the recent comps are "short sales". Were you aware banks today want fair market value for their short sales? If there are short sales for sale in your neighborhood, there is inventory. Buyers are buying short sales just like any other homes on the market. Do you owe more than your house is worth? If so, you may be a candidate for a short sale.
1 vote Thank Flag Link Sun May 6, 2012
No.

It would be a total waste of time to list it that high. I'm not trying to be rude, just realistic.

Let's say that you did find an agent to list it this high, and you did find a buyer that agreed to pay for the asking price. The appraisal would never fly.

The appraiser sees the same comparables that we as agents do. Good luck to you either way!
1 vote Thank Flag Link Sun May 6, 2012
I'm sorry but based on what you've written, your the one who isn't being realistic. What you need to get has absolutely no bearing on what your property is worth in today's market. Sellers never set market price, nor do Realtors. The only person who ever sets market price is a ready will and able Buyer. This isn't just for now, but forever. There is never a free market that operates differently. Even in the most absurd Sellers market, Sellers do not set prices, Sellers markets indicated temporary insanity among buyers who bid one another up, even then the seller has nothing to do with market price.

Any agent who takes your listing at more than 5-6% above market dictated pricing is honestly nothing more than a foolish agent with little or no experience and unfortunately there are plenty of them. However you and they are simply wasting time.

Sellers need to understand and accept market data, to do otherwise is simply delusional. The same applies to Buyers. Making an offer that's 20% less than the data indicates a home is worth is a waste of everybody's time and generally counterproductive. All it accomplishes is to start a negotiation by pissing off the other side.

For decades I've listened to Realtors go through incredible mental and linguistic gyrations as they deal with their buyer and seller clients. Most of these Realtor either don't last more than a year or two or hang around forever earning very little money and often harming their clients more than they help. It's embarrassing and frustrating to the true professionals out there.

Real Estate isn't really all that complicated. Every question and problem has the same answer, "Money." That's all there is. Then there's two follow up questions and deals either get made or they don't. Those questions are, "How Much?" and "Who Pays?" A Realtor primary job is to be an expert in thier specific market. They need to be able to accurately analyze the market data and present it clearly to their clients/customers. Often times one side or the other doesn't like the data (Just as you don't like the data in your area) Regardless the data is what it is and assuming that you or your property are exempt for some reason is absurd.

I'm sorry you find yourself upside down with your property. If you don't need to sell now then my advice is don't. Over time prices will absolutely come back up in the Oakland area. If you do need to sell now, they I'm afraid you've got to face the fact that you're going to get 40% less than you feel you need.
1 vote Thank Flag Link Sun May 6, 2012
It really depends if the comps are similar to your home. If you have a home that is non-conforming, larger homes, more square footage, then you can go outside and find similar comps. Find someone that really understands how to select comparable sales. Price your home accordingly. I've found that in some markets, the median price is $160,000, but the larger homes are selling for $200,000.....or homes with outbuilding........or homes with more updating.........or homes that offer the same design and appeal as your home.

Now if all of the comps are the same in your market area, it will not work. and if you do find a sucker, it will not get past the appraisal.

So it will depend on the comps.
1 vote Thank Flag Link Fri May 4, 2012
I have to be honest - no one cares about what you need to get for your home. You have to either accept the current market situation or keep the home. There is no way around it....
1 vote Thank Flag Link Thu May 3, 2012
Homes sell for what they are worth these days. If your information is correct, it would not be worth listing the home. Buyers will have several other homes in your area to choose from. Also, it would be very difficult for a buyer to obtain a mortgage for that much if the house appraises 40% lower than the asking price.
1 vote Thank Flag Link Thu May 3, 2012
“I need to get about 40% higher than recent comps when I sell."

Buyers do not care what you need.

If I told you I needed $14 for the $10 bill I was offering you, would you give it to me?

“UCLA is forecasting CA median price will be up 49% by 2016 so it’s only a matter of time. But if someone wants to buy my house now I would sell it to them.”

I know that you do not expect someone to pay you today what your house might be worth in 2016.
1 vote Thank Flag Link Tue May 1, 2012
Bay_area_II

To chime in, I agree with Erica, and the other answers. What you need isn't going to reflect in what a buyer is willing to pay. Even though inventory is low buyers are still very cautious on what they pay for a house because they don't want to repeat history. We are also seeing problems with appraisals.

The risk in pricing your home grossly over market is who is going to see it? Buyers have an expectation on what price they are going to pay for the size, location and amenities. They are going to ask, why is it so high? Then they will wait.

If I were consulting with you I would have a lot more questions for you such as; where are you getting the market value, why you need so much, plus what is your ultimate goal. When I have a clearer picture together we can strategize on how to achieve your goal. If not today, tomorrow or when the market and your goals are more closely aligned.

I am happy to see you ask such an important question, because as Mark said, it could cost you later.

Have an amazing day!
Web Reference: http://www.terrivellios.com
1 vote Thank Flag Link Tue May 1, 2012
Bay_area_ll:

Quite simply, unless you find an all cash Buyer willing to pay you Market+40% you and the Buyer are going to run into a market Appraisal deficit of 40%. I doubt any Buyer would be willing to subsidize such a deficit.

-Steve
1 vote Thank Flag Link Tue May 1, 2012
The pricing is important and buyers make the offer based on the preceived value of your property as it relates to the other properties for sale. Also another important piece is recently sold comps. It is not based on what you need personally for your financial position, but what the "market will bear." If you place yourself in the shoes of the buyer, who always wants the best value for their dollar and look at the other listings and then view yours, ask yourself, "how much more would someone be willing to pay for my property?"

It is important to "price to sell versus price to sit". Your sweet spot is the first 30 days on the market. and it is important to get a good flow of buyers through your property. If priced too high, buyers will view other properties on the market instead.

Diane Riel, broker/Owner DRE #01350400
Realty World - The Sterling Group
(408) 718-8485 direct (408) 608-1797 cell
1 vote Thank Flag Link Tue May 1, 2012
That's a good point but keep in mind that areas that have suffered from a high percentage of foreclosures and short sales are more likely to have that problem again in the future. A savvy buyer may shy away from areas where there have been problems in the past because there is more inherent risk.

Your point of buying a non-distressed property is correct in that it will have less problems. The next step up from there is to buy in an area that has a low percentage of properties being underwater and has had less foreclosure activity. The morbidly curious can visit this site and type in a zip code to double check.

http://www.sfgate.com/webdb/homepricesdrop/?appSession=15017…

Mark

Mark Burns, Realtor
Coldwell Banker Elite - Top 2% Worldwide
President - PRDS, Contracts and Forms for Silicon Valley Residential Real Estate 2008-2012
DRE #00896552 Licensed since 1985
Over 600 Homes Sold in Silicon Valley
Web Reference: http://www.markburns.com
1 vote Thank Flag Link Tue May 1, 2012
Are we talking about listing a $500K house for $700K? Is your 'need' because you are underwater unless you get that extra 40%? Are you counting what is will cost to sell (commissions, etc.)? Would YOU pay 40% over comps for your house?

Things to think about. After you list it and it doesn't sell, keep in mind that the internet never forgets. You may be shooting yourself in the foot when you want to be more realistic and get it sold; whether that is 6 months from now or 6 years from now.

Don't be that house in your neighborhood that everyone knows is grossly overpriced. It may cost you later.

Mark Burns, Realtor
Coldwell Banker Elite - Top 2% Worldwide
President - PRDS, Contracts and Forms for Silicon Valley Residential Real Estate 2008-2012
DRE #00896552 Licensed since 1985
Over 600 Homes Sold in Silicon Valley
Web Reference: http://www.markburns.com
1 vote Thank Flag Link Tue May 1, 2012
Well you pretty much have what us agents feel about 40% over comps. Erica gave you good advice as to how to get the max amount for your home. You have to remember that BUYERS set the market NOT sellers, I can't count the number of times that sellers have said I need to get this amount from a property, I'm sorry :( but what you need to get and what you will get are 2 different things.
If you list it at 40% over it will just sit there, I would not recommend it.
Sorry to sound harsh , but unless you have an all cash buyer as stated earlier or your home is fabulously upgraded, in a great school district, on quite street with good neighbors it is not going to happen.
At your service,
Allyson
408-705-6578
allyson@homesbyallyson.com
Certified Distressed Property Expert
1 vote Thank Flag Link Tue May 1, 2012
This is a good question and the answer involves a lot of variables that would be hard to cover in this forum. The best answer is for you to work very closely with the Realtor you choose to work with and
gather all the important data that is necessary to price and market you home properly. Raising the price over recent comps does not guarantee you will get higher offers than the current market and the buyer may have trouble getting it appraised at the sales price. If you get a cash buyer they may not want to over pay for the property based on their assessment of its value. Their are many more factors that you will need to consider before coming to an informed decision on pricing and marketing. Again this is best when done with the Realtor you decide to work with.

Best Regards,

Jim
1 vote Thank Flag Link Tue May 1, 2012
I believe it makes more sense and creates more activity with a quick OFFER if the listed price is aggressive and closer to market value comps!
We are seeing multiple offers come in as we aggressively market and price properties! Keep in mind we're still facing the challenges of the appraisal coming in at purchase price to secure the mortgage and to confirm in the Buyers mind that they have made a good investment!

Keep properties fresh and new...old listings raise many questions and as a result, will end up with a lower offer!

Bucks and Montco Counties in Pa., WE are seeing a good flow of qualified Buyers and nice activity with OFFERS getting to the table and closed successfully!
1 vote Thank Flag Link Tue May 1, 2012
40% over market value is very unrealistic. As mentioned below you would need a buyer paying all cash that got so emotional they wanted your house at no cost and had an agent so desperate for a commission they didn't tell them they were crazy for paying that for your house.
I would never let my buyer pay that much over list for a house.
1 vote Thank Flag Link Tue May 1, 2012
Bay area II:
A few comments for you...

Lots of sellers "need" to get more for their home than what the market is willing to pay. Hence, there are many short sale transactions because the seller is having to sell the home below what is owed on it.. Those homeowners without a hardship can not afford to sell their home and so are staying put. This is contributing to the low inventory.

If you were to get 40% above current comps, I would be surprised. Those financing the home would not get an appraisal at this higher price. Those not financing are, hopefully, enlisting the services of a real estate agent who understands current market prices.

And, if you expect someone to pay 40% above market for your home, are you willing to pay 40% more for the next home you buy?
1 vote Thank Flag Link Tue May 1, 2012
i am willing to pay 40% more for the house I buy since im moving down the proceeds will be enough to buy a smaller house
Flag Tue May 1, 2012
Your problem is that even if you got the most unaware buyer to come along and offer you lots more than comps are showing as the value the lender that buyer will use is going to have an appraisal done to verify the value before they agree to the loan. The appraiser is going to see the short sales and any other sale that has recently been sold. When the appraisal comes back lower than the offered amount the deal will be dead and you will have no buyer because the loan won't happen. This is what has been happening and why home prices are so much lower. What Allan is talking about below is a cash buyer that does not have to get a loan and so does not have to get an appraisal, but many cash buyers do (or should) so even that might not work out.
1 vote Thank Flag Link Tue May 1, 2012
And if you list 40% higher than the current marketplace I believe you are unrealistic.... Only hope you would have is to get a ALL CASH Buyer and I consider that unlikely. Best of Luck
1 vote Thank Flag Link Tue May 1, 2012
I believe it is the other way around. Your goal is not attainable. There is NO lenders that will take any chance when the sold price over the value.
0 votes Thank Flag Link Thu May 10, 2012
The market price is what buyers will pay for the property.

Since you are not a full time experienced realtor, it would help to meet with a couple of
agents - to get their CMA (comparative market analysis) and see how they would get you the best price in the current market situation (what type of exposure your house would get).
You might find out that your house is worth more than you think (or less) - but this "evaluation" is worth your time - and will help to sell the house - now or later.

You house might also have features that other properties don't - that will help to sell your house for more money.

I have had situations where the house/condo sold for more than the market price - but it usually was within 10% range.

In the mean time - if you find yourself in distressed sale situation - you may not need to wait.
You can sell now as a short sale - if applicable, of course.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
0 votes Thank Flag Link Wed May 9, 2012
If you have to move, maybe you could rent out your house instead of selling it. Then when the market picks up and your house is worth more, sell it.
0 votes Thank Flag Link Tue May 8, 2012
Mark Thanks for the link the zipcode is 95125 there werent too many short sales but just eough to drag down values, but now Im starting notice the few listing that are there are pending at more realistic prices.
0 votes Thank Flag Link Tue May 1, 2012
I believe the comps should also include comparable houses for sale which right now is almost nothing,

There are very few good listings now because people are unwilling to sell at short sale prices. Market prices is where you have willing buyers and sellers. Not just buyers.

UCLA is forecasting CA median price will be up 49% by 2016 so its only a matter of time. But if someone wants to buy my house now I would sell it to them.
0 votes Thank Flag Link Tue May 1, 2012
Bay_area_11
If you can wait for the market to rise you can get what you will want. Otherwise, you are too high to get where you want to go at this time. That said, are there low cost improvements you can make to increase your value? I would like to look at your home and see if there are any hidden gems within that will help you toward the price you say you need. Otherwise, if your price is below what you owe, maybe you should consider a short sale. If that has to be your option, you need to close the sale before the end of the year in order to avoid tax on forgiven debt.

Finally, you might want to consider re-financing even if you owe more than the value of the home. There are three new government programs allowing same. You may qualify. I can check for you if you call me with the address and the name and last four digits of the social security number of the primary borrower.

Mitchell Pearce
408-639-0211
mitchell@handsonrealtor.com
0 votes Thank Flag Link Tue May 1, 2012
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