Special offer

Set an offer date but didn’t get one? Raise the price instead. Really?

By
Real Estate Agent with Alain Pinel BRE 01367196

They set an offer date,  but didn’t get one. They raised the price instead. Really?

 

Two months ago, I wrote about a property in Montclair area of Oakland CA. Expecting multiple offers but only received one..or none? Believe it! .

 

So what happened?

The last time I checked, after 40 days on the market, the listing was cancelled. Several thoughts were offered about why it was cancelled. It isn’t that it wasn’t marketed properly because it was staged and photographed beautifully.

  • Pricing --- it was listed at $719K at first, then the sellers RAISED the price to $750K after three weeks.

  • Permits --- it was discovered that the expansion that gave the property more square footage was done without permits

  • Significant repairs --- did they raise the price because they expected buyers will offer less after finding out about the cost of repairs?

  • Refreshing the listing --- this is a common ploy. A property that becomes “stale” after a a while, is removed from the MLS, then re-entered after a few weeks (30 days later, it may appear as a “new” listing). If so, I wonder how much they will price it then?

What is notable is that in this case and at this time, their pricing strategy failed. It would be interesting to see what it will be next time because the seller’s market is heating up even more. Maybe they’ll get what they want later.

 

And here’s another story with a happier ending....

 

Around that time, I listed a similar hillside property a few blocks away, also in Montclair area of Oakland, CA.

The relocating sellers were hoping to break even when they bought the property in 2007 at $763K. To attract attention in this seller’s market, we priced the property at $749K, and hoped to get offers at higher than list price. We were stunned at the amount of interest the property generated just a few days after activating the listing.

12 Drake Place Oakland CA

I cautioned the buyers’ agents that if they are submitting offers at higher than list price, that the buyers should prepare to waive the appraisal contingency. My sellers did not want to negotiate a lower price if the appraisal comes in at less than their offer because there is enough interest that we knew we’d get very good offers. Amazingly, all the buyers waived that contingency.

The sellers accepted the best and highest offer after only 5 days on the market. We closed esrow at $901K, $152K or 20% above list price.

 

Moral of the story?

 

Underpricing seemed to work better in this case.

Raising the list price may not work and may even turn off buyers.

Set expectations with inspection reports so that there are no surprises for buyers.

Be upfront with buyers’ agents about terms and conditions the sellers want so they can guide their buyers accordingly.

Comments(9)

Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Pacita, We have said it over and over again...overpricing a home is a huge detriment to sellers. This is true even in a hot sellers market. Pricing a home right is what sells homes. 

I hope the sellers in your first example see the history on your listing then call you to re-list it!!  If they want it done right they need to hire a professional like you!

Jul 05, 2013 12:59 PM
Pacita Dimacali
Alain Pinel - Oakland, CA
Alameda/Contra Costa Counties CA

Kathleen....but they never learn, do they?

Jul 05, 2013 04:51 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Pacita -- we see some crazy stuff in this business.   Raising a price after a home has not received an acceptable offer is the kind of activity that will drive away the "real" buyers.  

Jul 05, 2013 05:43 PM
Pacita Dimacali
Alain Pinel - Oakland, CA
Alameda/Contra Costa Counties CA

 

Michael, if they didn't receive an offer when they thought they would, they should have re-grouped, maybe even take it off the market temporarily and then re-list it later to refresh the listing. But it's hard to figure out their rationale for raising the price. Probably temporary insanity....

Jul 05, 2013 05:49 PM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Set expectations..you got it...raise the price..yicks ! Unless they....added a room...or made some substantive improvement....not repair....oh not !

Jul 05, 2013 09:23 PM
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Same holds true on the Peninsula; set expectations and communicate clearly what the seller wants/needs. June 26 I listed a home for $1,250,000; July 2 we heard 4 offers; all were over asking; all gave the seller 45-60 days free rent-back. Seller accepted an offer with no contingencies and a price between 15-20% over asking.

I've seen people who raise the asking price--don't understand the rationale there.

 

Jul 06, 2013 01:45 AM
Pacita Dimacali
Alain Pinel - Oakland, CA
Alameda/Contra Costa Counties CA

Sally and David --- on more than one occasion, I have set the expectations to buyers and their agents. Those who couldn't or didn't want to comply actually thanked me because they didn't want to waste their as well as my time

Lottie --- your market is even more exciting than ours. Congrats on the fast sale.

Jul 06, 2013 03:03 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

In  a seller's market you can definitely over price, but you can never under price.  The market will bid it up to whatever it's worth.

Jul 06, 2013 07:20 AM
Kathy Sheehan
Bay Equity, LLC 770-634-4021 - Atlanta, GA
Senior Loan Officer

I raised the price of a listing I had once in the late 1980's.  It had been listed at $99,900 with another agent that couldn't sell it.  The seller called me and I suggested a listing price of $100.100.  I took A LOT of flack from agents in my office about the listing price.  However, by being above $100K, the listing was exposed to a new set of buyers.  But within 3 weeks it was under contract after being on the market with another broker for 6 months!

Jul 07, 2013 11:27 PM