Myth or Reality? Do Homes Really sell far below List Price?

Here in the Grandville, MI area the number is 93.7% of sales price with an avg. price of $142,000.  It's good to stay on top of these stats. 

In our area, it is becoming normal to see a well-priced home sell for over the asking price. My most recent experience was placing a $200,000.00 offer on a home priced at $179,000 in a sub where homes have been selling for $240-$250. Getting my buyer to write over the asking price was a feat in itself as he actually wanted to low-ball it. This home was in great shape and had only been on the market 2 days. By the 3rd day, there was a total of 14 offers and our offer placed into the 7th position. So there were 6 buyers smart enough to realize the "opportunity" and one buyer smart enough to grab it. This is now the third home my buyer has lost to a higher bidder. This buyer is a dear friend of mine whp is relying on all his non-realtor friends  & acquaintances assuring him that he can still find a home at a "deal" even though each time we write an offer I provide him with the hard stats of the market area showing that selling prices of well-priced homes are NOT 20-40% under list.

Silvia, great information for buyer and sellers. You know your market!  Make a believer out of them, that's what I say!  It's like the 'fish that got away' or the guy that got the hole in one golfing - just every once in awhile!

Amen, sister!  Homes that sell ahead of the competition are homes that reflect the realities of the local market conditions.  I can't even take my listing clients on pricing tours to guess the price of their competition (in an effort to get them to lower their prices for a price adjustment or to justify where I think their home should be positioned to sell) since the majority of SF homes in my market are horribly overpriced by those brokers who love "listings for life".  God bless their little souls.

Recent solds is what people should look at.  Here with a majority of our sales being REO, most sellers are ordering multiple BPOs and appraisals (unlike normal or short sale sellers) so they know what the home is worth or to make sure it is properly priced. 

If you study the human psyche like I do, you know that people lie, and quite often, especially when it involves money. It's not unusual for me to go do a home inspection and when I pull the MLS listing, it says the price is $299,000. The Buyers tell me they are getting a bargain at $275,000. I find lots of problems and the Buyers tell me at their housewarming party that they got the price reduced by $25,000 for all the repairs. When I check the public records to see when escrow closed and send them a congratulations card, I find out that they paid $319,000 for it. Hmmm. You decide! It happens waaaaaaaaaaaaaaay too often.

My wise old grandmother told me that people like about money, sex, and politics. I think she was right.

Silvia,

I do not see many homes selling waaay below list price.. Every once in a while someone will low ball one and it is accepted. 

They usually sell somewhere in the 90% to 100% range, is what I find in my area.

Great stats for your area.

Ahhh...a Realtor who knows her numbers!  I agree Silvia, if it is priced right it will sell--no matter what the market.  My mentor taught me if my listing got 2-3 showings a week I was priced right.  I asked him..what about a down market...his reply "2-3 showings a week"...I asked about an up market...his reply "2-3 showings a week"

Hi Silvia:

Great post!  If the property is priced correctly, it will sell.

We all have hear the ridiculous stories of people buying properties for a fraction of the price.  Then the public thinks it applies to all properties. 

It's a crazy time in our business!!!

The only homes that do sell way below list are the ones that were originally way over-priced, which, if they had priced them correctly in the first place they would have gotten more for.  Anything in the good areas here go into multiples immediately. 

Silvia. Some of these Buyers need a strong reality check. I usually refer out the unrealistic clients to coworkers (30% to me if they crack the nut)

Would be interesting if you added the average original/median list price to your analayis.  How many sellers are pricing correctly to begin with versus riding the price down to true market value?

Hi Sylvia: My two cents - bad house yes and good houses no.

:)

I see Matt's response above mine, but we've been seeing a lot of bidding wars here lately on the bad houses, so even they are not selling at bargain basement prices.