Home Selling in Oakland>Question Details

Shelly, Other/Just Looking in Oakland, CA

Are realtors intentionally listing homes lower than their actual value to increase demand and create a 'silent auction'?

Asked by Shelly, Oakland, CA Wed Apr 24, 2013

Help the community by answering this question:


We always discuss with the sellers the pricing strategy following the preparation of the CMA (comparable market analysis). Generally, we will list near the market value as determined in the CMA.

The current seller's market has surprises, however, when we receive multiple offers over list price, regardless of whether the property is priced higher or lower than what the CMA indicates is the market value.

List price is all part of the pricing strategy -- some agents list less than market value in order to stimulate a bidding situation. But from a buyer's point a view, list price should NOT be the sole basis of the offer.

Take a look at this blog about "Why was my offer rejected although it was higher than list price"

Buyers who track the progress of sold properties on which they submitted offers are very surprised when they found out they wrote higher offers but lost anyway.

Overpricing --- is still the number one reason why a property won't sell. So we are caution not to do that.

Underpricing --- by how much? Just a tad under the market value will ensure that we generate enough interest to get an offer. By a lot will definitely attract a lot of interest.

But do you, as a seller, really want to look at over 30 offers just so you will have bragging rights to say you received that many offers? Won't analyzing the right offers be a better use of your time?

Overbidding ---- What buyers and their agents are careful about is how much higher should they write their offer, especially if the buyer needs to get a loan, and as such the property needs to appraise for what the buyer is offering.

Pricing is definitely a critical action item when selling a home, and one that warrants an in-depth discussion.

How may I help?
2 votes Thank Flag Link Wed Apr 24, 2013
There is no "actual value" until a ready willing and able buyer makes an offer. There are sales strategies that suggest listing a property below what you believe the fair market value is can bring about a quicker sale and in markets where there isn't enough inventory on the market to satisfy buyer demand, can result in multiple offer that drive the price up, but this also requires the consent of the Seller who may not be willing to risk such a strategy.
0 votes Thank Flag Link Mon Jun 30, 2014
As the "Actual Value" is determined by the sale price, or shall we say by demand, realtors can only estimate what the selling price might be. Especially when the market is moving upwards, realtors often discuss with sellers what that range may be.
0 votes Thank Flag Link Sun Jun 29, 2014
It looks like this is a year old question, but it's very relevant to many sellers and buyers today, so it might be worthwhile to talk about a bit.

The short answer to the question is yes - this is a common practice these days in the Bay Area. It can be frustrating and make purchasing a home difficult,

The best way to determine the value of a home is to contact a local realtor who can do a market analysis on the home and find out more details about the interest in a specific property so that you can make an informed decision when deciding how much to offer.
0 votes Thank Flag Link Fri Jun 27, 2014
I'd like to do my homework on what the market price is form homes in Oakland and Berkeley. As an LA resident, how can I determine what a real price is for a home? Especially when web sites like Zillow estimate that the asking price is significantly above market value already?
0 votes Thank Flag Link Wed Jun 25, 2014
You can study tax records or simply speak to several local Realtors who have paid access to market data that they can share with you. You're never going to learn anything of value in regards to what you're home is worth on online sites like Zillow etc that offer computer generated guesses.
Flag Mon Jun 30, 2014
It's currently very frustrating to many buyers that so many of the homes listed in Oakland are selling for significantly over asking. In March the average sale to list price for the area was about 110%.

Yes, the listing agents job is to discuss with the seller what is most likely to get them the highest possible price.

The list price in many cases is just a stake in the ground in a changing market.

Try to stay as objective and unfazed as possible by the current overbidding. It's very hard
to stay in the market and get a house if this really bothers you.

At some point the market will level out and the list to sale prices will move closer together. We're already seeing some of this.

For agents receiving 60 requests for disclosures and 30 offers it is very time consuming and many will try to price more inline with the market shift!
Web Reference: http://jackiecare.com/
0 votes Thank Flag Link Thu Apr 25, 2013
Hi Shelly,

Yes there are some realtors that do recommend to their clients to list their homes below market value to generate interest and with the hope of generating multiple offers. That has always been the case. This is not awlays the case across the board and there are several factors that do play into the level of interest of a particular property and ultimately the sales price.

Right now pricing properties can be a bit of a challenge. The market has shifted significantly over the last 6 months with a drastric reduction in inventory and and increase in interest. Interest rates being historically low and a general improvement of the local economy has prompted this. In addition many who are renting are finding that they can purchase a home and have mortgage payments close to thier rental payments.

Whenever the market does shift, pricing can be more challenging. If looking at comparables that recently sold, you may not see what the current value of a particular property could potentially be. Condition of the property, location and ease of access can also affect the level of interest.

So as you can see there can be many factors that determine value. Value is always set by buyers and what they are willing to pay for a property. During a market like this, buyers are willing to pay more.

Hope this helps answer your questions.


Lisa Cartolano
Alain Pinel Realtors
DRE 01715440
0 votes Thank Flag Link Wed Apr 24, 2013
Absolutely - but this has been going on for years now!! As I try to tell my clients right now - listing prices are irrelevant...it's all about market value.
0 votes Thank Flag Link Wed Apr 24, 2013
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