Author Topic: More Homes Being Listed - Irvine  (Read 3234 times)

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Offline USCTrojanCPA

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Re: More Homes Being Listed - Irvine
« Reply #45 on: July 22, 2018, 08:27:43 PM »
Bingo, many of the listings that I lose are to agents who promise these "pie in the sky" prices to sellers where I tell them what they can reasonably expect to sell their home for.  What happens?  The home sits and sits and sits followed by one price then another and then another until it eventually either gets de-listed OR it closes for a price at or below of what I said it would have.  I'm just not the type of agent to blow smoke up my client's butt, I'm very analytical and back-up my estimates with hard data.  As I tell my clients....numbers never lie, only idiot realtors do.  haha
Correct me if I'm wrong but from what i can tell, your pricing strategy seems to generally be to list for slightly below market value, create a multiple offer situation and then generally the seller can get slightly over list price for a final transaction price either at or marginally above other comps. This creates a very quick and efficient sale with less time needed.

I've seen other agents who also like to list below market value to create an auction environment. Do you think there are different situations or market conditions where by listing too low, you might anchor the price negotiation at too low of a starting point (i.e., buyers are only willing to overbid by X amount and if we list too low, it's harder to get above market value)? Perhaps by listing closer to market value (or even very marginally above in certain cases), a higher sales price could be achieved, though perhaps taking slightly longer to complete a sale?

It's really a case by case situation which pricing strategy works best for the seller and their property.  I only recommend that a home be slightly under-listed (no more than $20k-30k below closed comps) if the market is strong for that type of property which will ensure that we get the buyer velocity of offers to get the price back up to comps and at times have it go over closed comps due to a bidding war.  An example would be a 3-bedroom condo under $800k in Irvine.

To your point, it's not a good idea to under-list any property if you are in a neutral or in a buyer's market because then you won't get enough buyers to bid up the property back to the market price.  It's also not a good idea to under-list when there are several of the same or similar floor plans listed on the market because buyers will feel that they won't need to bid up an under-listed property. 

Typically if a seller wants to sell a property quickly (when the home is vacant or if they don't want to deal with keeping an occupied home in show condition for months because they have kids) then slightly under-listing may be the right strategy.  Listing a higher priced property (e.g. $1m+ in Irvine) too low where you don't have enough buyers to bring it back up to market price is not optimal. In those situations, pricing should be above closed comps so you leave room to negotiate the price down to a price both the buyer and seller feel comfortable at. 

Understanding which type of property should and shouldn't be under-listed is very important and takes someone who understands the buyer dynamics within that particular market and price band.  At the end of the day, I provide all of the different pricing options with my sellers with the potential pros and cons for each option and let them decide which option they are most comfortable with.  Yes, getting the seller the highest price possible is very important but how much time that takes to get the home sold should also be considered in the equation because time is money, especially with vacant properties. 
Martin Mania
AgencyOne
CA BRE License # 01799007
mmania001@yahoo.com
714-747-3884 cell

Often imitated....Never duplicated!

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