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October 19, 2007
House Pricing Strategy?
I've been house hunting for the last 8 months and have come across a few nice properties that, compared to less prime houses on the market, are priced lower and are much more attractive. I've also lost out in a bidding war for one of these houses that ended up selling for about $500K over asking (way before the current credit crunch). Is there a real pricing strategy at play when a house is listed at a more "reasonable" price compared to others? Do brokers always anticipate, and get, a bidding war that substantially drives up the price of the house? I'm just trying to better learn what to anticipate.
Comments
If you see a "lower" price on a "nice" house, the broker is looking for bidding war and to sell way above asking. It doesn't always happen though.
Posted by: guest at October 19, 2007 12:18 PM
it's a strategy some brokers intentionally use to maximize value. however, it works best in stronger market.
Posted by: slick at October 19, 2007 3:13 PM
It all comes down to "right" or correct pricing. In this inflated market, a savvy buyer will certainly recognize value (compared to the numerous "dogs" he or she will have undoubtedly come across during the course of their hunt), and brokers are acutely aware of this. A property doesn't have to be priced below market-rather, simply priced at what it's worth, and you can be fairly certain that buyers who have been in the market for some time will come calling. The strategy works wonders because you figure to get at least x number of bids at the ask. A broker can then turn around and say to all involved he's going to a best and final. Those words strike fear in the hearts of interested purchasers and then it comes down to a poker game. Who wants the house more? The price will go up accordingly from there. It is a highly effective strategy if you ask me...
Posted by: saint marks soul at October 20, 2007 9:01 AM
Especially in a slower or more uncertain market I would always price a property lower, as a strategy. I've had to do it before, and got several offers in the first week and sold for over asking. The key thing it does is it gets people's butts in the house on that first open house day! That's what sellers and brokers don't always think about. Simply ensuring a lot of potential buyers are curious enough to take a look. An overpriced property will make people put off seeing it until the price comes down.
Posted by: guest at October 20, 2007 12:04 PM
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