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Why Are Listing Agents Under Pricing Homes Right Now?

Real Estate Agent with Long and Foster Real Estate VA License # 0225089470

Why Are Listing Agents Under Pricing Homes Right Now?

Last night I had to deliver bad news to buyers that their offer on their dream home had not been accepted.  They went ten thousand over list price, had an earnest money deposit fives times higher than what would be considered typical, a home inspection with right to void only and financing and appraisal contingencies.  The problem was, the listing was under priced and I knew that going in.

There is a nasty trend developing in the Bristow/Gainesville market of agents under pricing homes to get ridiculous amounts of offers.  When I first called on this listing, the agent said she wanted it be more widely available.  That's nice, but the reality was this home was not as widely available as advertised.  

Counseling buyers on what a home is going to sell for is tough.  "But they are only asking for...."  Doesn't matter what they are asking for, it's not even close to where it will sell.  That's a concept experienced agents get, but first time buyers have to learn the hard way.

Even pricing a home correctly, as I did a couple weekends ago, I ended up with way more offers than I thought I would have. Then again, it was a higher price range with buyers that could buy themselves higher in the competition without having to worry about appraisal.  Having seen that, I will likely price the next move in ready, updated single family home listing I get above where I think it will sell to lessen the stress of two dozen or more offers.

Intentionally under pricing didn't help any of those first time buyers.  It just set them up to be heart broken.  It also taught them that many agents in the market are not operating in a truthful manner.  There is no need to start a bidding war in a seller's market.  A realistic list price will have a seller reviewing multiple offers regardless.


Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Hi Chris Ann Cleland listing agents have the responsibility of pricing a home properly.... it's unethical for them not to do that....  

A realistic list price will have a seller reviewing multiple offers regardless

Feb 08, 2021 09:21 AM
Chris Ann Cleland

Barbara Todaro --I am seeing it so much in our market.  I think some of them think they will pick up buyers.  What good is it doing them to pick up buyers with unrealistic expectations of what is happening in the market place?

Feb 08, 2021 09:27 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Chris Ann Cleland and I am seeing it in our Denver area also.  I show homes on Saturday and I knew the one would have multi offers because of the low price.  The agent when I call had 7 contract all over so far.


Feb 08, 2021 09:57 AM
Chris Ann Cleland

A well priced home in our area could have that in one day.  No need to under price.

Feb 08, 2021 01:58 PM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Chris Ann Cleland - I see that Barbara Todaro weighed in and she would be one to follow.

Feb 08, 2021 11:38 AM
Chris Ann Cleland

She's a smart lady.

Feb 08, 2021 01:58 PM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

My thoughts ... that the pricing strategy lacks responsibility. It creates an expectation with many buyers that will never be met. It also creates more work for the agents representing those buyers. 

Feb 08, 2021 04:17 PM
Chris Ann Cleland

You can see the agents that got churned up the wake of the disaster complaining about it online yesterday.  It is SO irresponsible.

Feb 09, 2021 06:35 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

I agree with you, Chris Ann.  I suspect the practice comes from listing agents looking for quick sales, rather than responsibly marketing the home.  It often creates chaos and confusion when multiple offers come it.

Feb 08, 2021 07:09 PM
Chris Ann Cleland

Quick sales happen at market prices right now. No need to under price.

Feb 09, 2021 06:35 PM
Roy Kelley
Retired - Gaithersburg, MD

Thank you very much for sharing your experience.

This is a challenging time for home buyers.

Feb 09, 2021 05:49 AM
Chris Ann Cleland

It's ridiculous.

Feb 09, 2021 06:35 PM