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.
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