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Pricing Strategies

Ventura Townhome We've seen the pricing strategy of pricing a home undermarket to solicit multiple offers gain steam over the past 6 months. The bank owned properties really got this strategy moving about the middle of last year. Since then , we've seen property owners using this same strategy with success. Not only are these properties selling quickly, in some cases, they are selling for more than list price. Buyers need to be aware of the strategy, and be sure to fully investigate market value before making an offer.

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Posted by Hope Goss Ventura Real Estate on 01/23/2009 01:16 AM

Comments (19)

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Originally posted at: Hope For Ventura Real Estate: Pricing Strategies

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19 Comments on Pricing Strategies

JAN

That's great, Hope! I'd love to see California turn around.

We are definitely seeing signs of a turnaround. Huge increases in closings, and signs of prices stabilizing.

I have not seen muti offers as of late. I have notice a price stabilization in my market. Which I will take as a first step.

great comment - we encourage all our sellers to be right around where it needs to be - you do not have to except a low offer and it easy to justify our price - usually gets the job done much quicker that way

Hope, that is a terrific point and very much a dead on no brainer for getting the home sold. The only obstacle that I have encountered is trying to convince the seller who is still stuck on shoulda, woulda, coulda of yesterdays prices. Thanks again. kevincavanaughonline.com

Great marketing strategy, keep up the good work!

Good post. Seems like things are starting to even out and the market will get better for everyone.

Tony

Hope -

Thanks for the post!

This strategy is nothing new - we've been doing it for years, with success, for sellers who want to sell quickly.

However, in this market, it is tough to see where such a price is - responsibly. Many times, we have attempted to price a house "below market," but below market is a moving target around here - often moving downward.

Further, you don't want to price too ridiculously low, based on the comps, or it appears you are simply pricing to sell - seller be damned.

Tough, judgement call, especially today.

DEAN & DEAN'S TEAM CHICAGO

Wow, I thought the days of multiple offers were long gone!

you got to price to sell! even in a strong market, but especially in this maret. good luck this year out there.

That seems to be the case in my area as well. Maybe we will see the market come back sooner than we all think!

I've seen banks use this strategy and have tremendous success. I had a client pay $100,000 over list price on an under-priced bank owned home and he beat out 16 other people. I'd love to hear how people are getting their sellers to do this successfully because I see a lot of resistance.

I went to a networking meeting the other day and one of the speakers discussed pricing properties based on a downward trend. He presented four listings using this strategy. May be a way of pricing properties and staying ahead of the market. Thanks.

Hope,

Boy, you were up late last night!! You're right, we do have a lot of Ventura homes for sale that are priced under market and garnering multiple offers. We've been experiencing this for almost a year now. I had one buyer I wrote 7 offers for before we got an acceptance due to bidding competition. So it's crucial to educate your buyers to be prepared for this process and not get discouraged.

The flip side of the coin is that some of those underpriced properties come back on the market because the bank figures out that it's undervalued or the buyer bails because they've bid too much for a major fixer.

JAN

we are seeing multi-offers on very low priced REO homes, however, it rarely happens , if ever on re-sale homes

Hope, that is encouraging to here multiple offers are being made on properties in CA. Price stabilization is a key component to beginning the purchase RE recovery

Jay

JAN

It's a great strategy, but one of the things I find frustrating is when the selling agent strings multiple contracts along for a ride. If I want an auction I'll go to an auctioneer. ;^)

FEB

Hope - while I understand why listing agents do this to get a quick sale for the seller, I agree with Will above about stringing along a bunch of other bidders just to trigger multiple offers. For many of my clients (low-medium income buyers) they're the ones getting strung along and getting their hopes up when in fact they haven't a chance in the world of playing the bidding game with others who have more cash, especially around here in Ventura County.

I don't know about your client base but I've picked up more investors in the last year than I ever have in my entire mortgage career (nearly eight years). I'm now getting investors who are back in the game as well now that Fannie has changed their investor guidelines from four finance properties back to 5-10 financed properties.

Lastly, for the first time investor, there is another Fannie program that just came out that will allow investment properties with less than the requisite 20+ down payment and very affordable terms.

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