A Real Relationship

When it comes to selling your home there are a number of relationships that are important to you. It’s obviously pretty important exactly who sells the place for you for one, but ultimately maybe the most important relationship a seller has is the relationship between the asking price of the home and it’s perceived value. If that relationship is out of whack or disfunctional your chances of getting top dollar are lost.

The truth is, it’s a fine art to get this relationship right. Months can be lost attempting to get it right too. Any given house, condo or townhouse has it’s pluses and minuses. Every home has a flaw of some kind. What every home needs when it’s on the market is for the buyer’s to have this experience…”I don’t really care about______________________, I just want this place!” When homes get overpriced the feedback is almost never “The price is too high”. Typically the feedback contains alot of very specific, detailed analysis of the flaws of the home.

“The yard’s too small”

“The windows are original”

“The bathrooms are original”

“The bedrooms are too small”

This type of list can be infinite. Here’s the thing…every home has value. At some price houses with very significant defects will sell with multiple offers. No defect is large enough to frighten anybody. Conversely, when a home is priced too high, every defect is magnified and ultimately blown out of proportion. Buyer’s intuitively understand the relationship between real value and the listed price. A great example of this came up in Foster City this week. Jan Majeski of Alain Pinel has a listing at 717 Widgeon that has 6 bedrooms, 2 baths, is an REO and is listed at $769,900. There’s isn’t really any question in my mind that this place is going to get multiple offers. It doesn’t really matter what issues this place presents either….they’re going to be eliminated by this value price. Of course it’s a different animal pricing a foreclosure over your own house, there’s no emotional connection that would argue against a lower initial price. It’s on the normal sales where this all really becomes an art. Homes that are listed a little lower than the market tend to get alot of attention right now and in many cases are receiving multiple offers. Others that have erred on the high side are sitting.

It’s sort of a strange dance. Recently I saw a house in San Carlos that was in almost original condition list for a price of $1,098,000 and that price represented a discount. They got 5 offers and it ultimately sold for $1,210,000. I really believe that if they had listed for $1,200,000 they would never have stood a chance of getting it. The houses flaws would have been exaggerated and it would have languished. Maybe it would have sold for $1,098,000!

Comments

  1. interesting… so, as a buyer, I might be better off to underbid an overpriced home instead of waiting for an underpriced/right-priced home and get outbid?

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