New Price !

By
Real Estate Broker/Owner with Saint Francis Property Santa Rosa, CA 01368633
https://activerain.com/droplet/57tG

Open HouseI love it when a client who has lived in the same house for 20 + years thinks they know how to price a house better than me.  Don't get me wrong, as a homeowner myself, I pay attention to what sells in my neighborhood, and feel I have a pretty good idea of what homes are worth, but when a seller over prices their house by 20% compared to recent comps, it can create a little conflict.  I do value my clients opinion even if I think it's too high.  My clients are the boss, and if they insist on over pricing, I'll work with it as long as they are flexible to reality and will lower the price within a reasonable time.

My recommendation is to always price a home as close to it's value as possible taking into consideration market fluctuation and some other specifics that might apply to a particular property.  I know that some sellers like to  price their homes high and take the best offer.  I prefer to list the home close to it's value, or even a bit low,  giving buyers 14 days to submit offers.  With the correct marketing in a seller's market, we  can create excitement and drive the purchase price up to a realistic value.  

The draw backs to pricing your home too high are two fold

1) Let's take a $200,000 home that is priced 20% over value.  Now I am trying to sell a $200,000 for $240,000.  The problem is that we are now competing with homes that ARE worth $240,000 and that might be a difficult challenge depending on what homes are out there.  

2) Let's say I find a buyer who unwittingly is willing to over pay for your home.  If the appraiser does not agree, expect the buyer to renegotiate the price.  If you don't have back up offers, you are most likely going to find yourself giving up some of that generous offer.

 

Now let's say you take my advice and price your home so it's attractive in a seller's marketplace.  We tell buyers we won't accept offers for the first 14 days.  In this current market, we can expect multiple offers that lead to the highest and best offer.  If an appraiser indicates that the home does not appraise, we can use the multiple offers to ask the appraiser to reconsider the value based on multiple offers.  If the appraiser wont budge, we can ask the buyer to make up the difference between appraised value and the offer price, or we will go to the next offer in back up.  

Posted by

Jim Cheney, Broker

"Your Realtor in Rincon Valley"

Wine Country Real Estate

Santa Rosa, Sonoma County

 

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Rainmaker
1,747,429
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Hi Jim -- I'm with you; I like to have the property on the market 10-14 days to get proper exposure. Sometimes, however, they go fast (like my 1-bedroom condo listing in San Carlos. on the MLS 9/27; 5 offer reviewed yesterday; in contract with no contingencies)

Oct 05, 2017 11:54 AM #1
Rainmaker
1,171,617
Sheri Sperry - MCNE®
Coldwell Banker Residential Brokerage - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

HI Jim Cheney ,

Great advice!  A reasonable seller should follow it.  I like the idea of using the multiple offers to get with an appraiser that may be too low.

Oct 05, 2017 04:23 PM #2
Rainmaker
3,009,660
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Hi Jim... an interesting approach to the appraisal issue. I've not found appraisers terribly cooperative in reviewing their values in the fact of multiple offers, but I'm not sure we have quite the number of multiple offers here over asking price that you do.

Oct 06, 2017 12:52 AM #3
Rainmaker
3,050,725
Tony and Suzanne Marriott, Associate Brokers
BVO Luxury Group @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Interesting approach as Nina Hollander mentioned in her comment.  Have not tried that but have filed the idea for "possible future use"!

Oct 06, 2017 02:42 PM #4
Rainmaker
4,037,885
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Jim, we have seen a few of these scenarios over the last few years.   In the spring when inventory is so low, buyers were offering money over appraised value, but not now.

Oct 06, 2017 03:57 PM #5
Ambassador
3,982,164
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Pricing correctly generally brings a quick sale with no worries about appraisals failing to meet value.

Oct 06, 2017 05:41 PM #6
Rainmaker
1,977,799
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

I love how you analyze things and can explain it in a way that makes perfect sense. You really have a great head on your shoulder and I can tell, you always want to help others see things from your professional point of view for all the right reasons. 

Oct 06, 2017 08:55 PM #7
Rainmaker
2,741,638
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Pretty good price if not great for some areas. All the best with love and light and many more great sales!

Oct 13, 2017 11:34 PM #8
Rainmaker
2,741,638
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Simplifying deep analysis is a really special skill that he has, I agree! I think I also can work on this skill a bit more Patricia Feager

Oct 13, 2017 11:36 PM #9
Rainmaker
4,037,885
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Jim, checking in to see if you got this closed without any fire issues.   

Dec 17, 2017 07:24 AM #10
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Jim Cheney

Rincon Valley Realtor 707.494.1055
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