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And Sometimes The List Price Is The Starting Point…

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Industry Observer CalDRE #01165532

And Sometimes The List Price Is The Starting Point…

 

Pasadena Real Estate - REALTOR Michael Jacobs 818.516.4393 cellIt can be difficult to be a buyer these days in our competitive Pasadena area real estate market.

 

Low inventory of properties available for sale.

 

Lots of buyer interest in purchasing the limited number that do come on the market.

 

Multiple offers are pretty common.  At least when a property is well-priced, well-presented and available to be seen.

 

So, when first time or relocating buyers or people deciding to move up and who haven’t bought a home for a while decide to venture into today’s competitive Pasadena(or many places in the country)real estate market, it can be a little scary -- okay maybe very frightening

 

While working with some relocating buyers recently, the wife asked about pricing.

 

That house needed a lot of work, I might buy it if it was priced 10%, no 20% below its asking price.

 

Hmm, I say -- how did you come up with that price?

 

Because it needs work.

 

Do you realize the house has been priced to reflect “work” that is needed?

 

Then I decided to take a detour to another home in the neighborhood that was priced substantially higher that was in turnkey condition.  It wasn’t on my planned list of homes to show.

 

Can you see the difference?  I ask.

 

They both understood.

 

Sometimes a list price is a wish - a dream - a I hope I can get this kinda price.

 

Other times it’s realistic

 

And then there are the times it’s a starting price.

 

Unless you have an unlimited budget -- you will need to establish parameters in your purchase.  In addition to your wallet, your lender will also have a say in that price as well.  Afterall, the idea is to actually close the transaction.   

 

Do you have questions about Pasadena area real estate.   Whether you are a prospective buyer or a homeowner thinking of selling, I welcome your call 818.516.4393 cell.

 

And Sometimes The List Price Is The Starting Point…

Posted by

Michael Jacobs

 

CalBRE # 01165532

P. O. Box 587

Pasadena, CA 91102

Call/Text:  818.516.4393

mtj916@gmail.com

 

 

Kathy Smiley
Rodeo Realty ~ Fine Estates Westlake Village - Newbury Park, CA
"Real Estate results that make YOU smile!"

Michael - oh, sooooo true! Sometimes we have to allow our sellers to list high. It's just a fact of life. They may not be in a hurry... The spouses may not quite agree... There may be a "fogging-over" look on their face when you sequay the listing appointment into the price arena. Whatever the reason, sometimes it has to be a starting point. Baby steps work for some sellers. As long as we're honest, we show our homework, we relate stories of how long it took other sellers who listed high to sell - all without being bossy or disapproving, it all seems to work out in the end!

Mar 29, 2014 09:24 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

I've got a listing right now that needs some work and has been priced to reflect it, yet the buyers that have written offers don't look at it from the comps, but just from the list price, when they start taking off money for this or that.

Mar 29, 2014 10:16 AM
Belinda Spillman
Aspen Lane Real Estate Colorful Colorado - Aurora, CO
Colorado Living!

Michael,  Some buyers think they can get a deal regardless of the market.  They are just so afraid to pay at or over list price.  It seems like it takes a few times of losing out on a property before they actually "Get It". 

Mar 29, 2014 10:21 AM
Belinda Spillman
Aspen Lane Real Estate Colorful Colorado - Aurora, CO
Colorado Living!

Oh - Suggested - of course.

Mar 29, 2014 10:22 AM
Laura Allen, Lake Tahoe - Truckee Real Estate for Sale TahoeLauraRealEstate.com
Coldwell Banker Realty, Tahoe City, CA (530) 414-1260 - Tahoe City, CA
Tahoe Real Estate Agent Helping Buyers and Sellers

Michael - You did your clients a real favor by showing a home that didn't need work, verses a home that does need work, and why that lower priced home becomes a great deal even though it need TLC, it's all about the price perspective!  Suggested!!!

Mar 29, 2014 11:38 AM
Anne Hensel
South Beaches Real Estate Professionals - Saint Petersburg, FL
Realtor - Broker - St. Pete Beach, Treasure Island

Great move...  visual works so much better than words!!  

Mar 29, 2014 12:24 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Kwee - no one wants to overpay but given a competitive market, there are some times when a buyer may have lost other homes and decides to push the envelope a bit further.  I'm not so sure people always get what they pay for.  In fact, I'm pretty sure that's not always the case.

Kathy - it depends on the market, in a rapidly increasing market - an slightly overpriced home may soon catch up to the market but in a declining/stable market -- the seller may be confronted with large number of days on market and no offers that can be accepted.  It's a balancing act.  The starting point I referenced was almost an auction-like atmosphere -- with increasing bids...

Chris Ann - it's one of those things that's a head scratcher to me -- buyers always seem to overestimate the cost of updates/repairs and sellers underestimate.

Belinda - as I have said(and many others before me) -- sometimes the deal is getting the house...

Belinda - thanks!

Laura - it is about perspective -- one buyer's dreadful fixer is another buyer's grand opportunity.   That makes the world go 'round.  Thanks for the suggest.

Anne - you're right about the impact of actually seeing versus hearing/reading about it.   

 

 

 

 

 

 

 

 

Mar 29, 2014 12:50 PM
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

You don't need me to tell you that you did the right thing by taking them to a higher priced, turnkey home Michael.  Well done sir.....you made your point.

Mar 29, 2014 10:09 PM
Noah Seidenberg
Coldwell Banker - Evanston, IL
Chicagoland and Suburbs (800) 858-7917

You are really showing your professionalism Michael. Out market is so different so far in 2014. Great post.

Mar 29, 2014 10:52 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Good morning, Roger - it was a first time adventure with these buyers so it seemed to have the necessary impact.

Hi Noah - thank you.  As we know every market is different.  It seems we are working in some very interesting times. 

Mar 29, 2014 11:02 PM
Roy Kelley
Retired - Gaithersburg, MD

This is good advice for home buyers. When the inventory is low, home buyers need to be well prepared for multiple contract competition. 

Mar 29, 2014 11:21 PM
Scott Larson
BHHS/Utah Properties - Park City, UT
Park City, Utah Real Estate News

Hi Michael, it's all about relative value and you presented the case well to these buyers so they clearly understood, nicely done.

Mar 30, 2014 07:21 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Roy - multiple offers are so common, some buyers wonder what's wrong with a property if it doesn't have them.  Go figure, huh?

Scott - it's a what a willing buyer will pay and what a willing seller will accept.  Kinda simple when you think about it but certainly when it comes to "real life" things can get kinda complicated.  

Mar 30, 2014 01:22 PM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Michael-The sooner real market conditions are understood by the buyer, the sooner a real deal can be had.

Mar 31, 2014 05:03 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Michael, All markets are different and with short inventory the price ceiling is what the buyer can bear.

Mar 31, 2014 01:01 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Wayne - well, sometimes -- in our market, a buyer may step up to the proverbial plate and still strike out.  It's very competitive -- only one can be victorious.  

Debbie - famous words - all markets are different -- what the buyer(and the appraiser/lender) can bear.  

Mar 31, 2014 02:27 PM
Charles Stallions Real Estate Services
Charles Stallions Real Estate Services Inc - Gulf Breeze, FL
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

Price is always king but so true as to everything or marketing is different

Apr 01, 2014 02:33 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Joyce - price is definitely part of the royal family. I find most sellers and buyers are most concerned about price when the whole "court" needs to be considered.  

Apr 01, 2014 03:54 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Michael,

All real estate is local as Debbie commented but in those markets with low inventory and high demand the prices can escalate to the whatever the market will bear. You are right sometimes the list price is the starting point. Have a great day!

Apr 01, 2014 09:57 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Dorie - depending on the neighborhood, some list prices definitely look like an opening bid at an auction.

Apr 01, 2014 11:11 PM