SELLERS: Buyers won't buy over priced property, multiple offers or not

HOME SELLERS: Multiple offers in the market doesn’t mean Home Buyers will throw caution to the wind and buy an over priced property.

Because we’re seeing multiple offers in my neck of the woods such as in Alameda , Oakland and Piedmont CA, that doesn’t mean the Home Buyers will offer more than the house is worth.

Lately, I’ve heard from Home Sellers who got very excited to hear that the bidding wars are back. Yes, it’s true we’re seeing multiple offers on properties that are priced right, show well, and in great locations. However, know that some agents and sellers may have priced properties a tad less than market value as part of their pricing strategy to stimulate demand.

The economy is moving, albeit sputtering...not at a runaway speed.

It's very unrealistic to think that the home sellers can or should list their homes at the price they could have gotten at the height of the market. Refer to chart from Zillow’s blog in 2011 when they said Home Values Declines Surpass Those of the Great Depression.

And this is also the picture that SP/Case-Schiller index paints

Sellers should be aware of some pitfalls of over pricing:

• Buyers will stay away --- thus, sellers will not see multiple offers he expects
• Property will stay on the market longer while other comparable properties are sold rapidly
• Listing could get “stale” and forgotten by buyers and their agents
• Eventually, seller may reduce the price anyway, but seller would have lost valuable marketing time
• Even if someone writes an offer at the price the seller wants, it may not appraise at the price
• And when the appraisal value is less than what is offered, what will the buyer and the seller do?
• Buyer could ask for price reduction to be at the appraised value
• If Seller refuses, Buyer could withdraw offer
• If Buyer withdraws, then Seller may put property back on market -- but at what price?
• If Buyer had conducted inspections, those reports are now part of the disclosure package. Some repair items could render the property unattractive to future buyers. Will seller undertake repairs?

HOME SELLERS: Multiple offers doesn’t mean Home Buyers will throw caution to the wind.  

Au contraire. Home Buyers have seen the problems caused by the heated market. They are taking advantage of the low prices and low interest rates, but they are also a lot smarter about what to avoid.

Related posts:

SELLERS: Highest list price doesn’t mean right price or right agent.

Should buyers be aggressive with their offer in this market?

It’s a seller’s market in zip code 94611: Oakland and Piedmont CA

ALAMEDA CA: Believe it. It's a SELLER'S MARKET!