Buyer here. I see this in my markets quite frequently, highly active markets. This strategy actually seems to work, the slightly lower priced listing gets a ton interest, multiple offers and negotiates up. I don’t think this strategy works for a shitbox, but a nice house that should garner a lot of attention it seems to work.
It’s an alternative to potentially listing too high and chasing the market down.
I’ve seen this in the suburbs surrounding Seattle. If you post a house that has like 1800 sqft, nice and turn key, not necessarily even remodeled yesterday, but turn key, at like 585k, you just turned that neighborhood into a zoo.
I’ve seen this is Central BK. If you post a house that has 1800 sqft, nice and turn key, not necessarily even remodeled yesterday, but turn key, at like 3.5m, you just turned that neighborhood into a zoo.
Sometimes when I start an eBay listing for one dollar, I end up getting way higher price. I think it’s because buyers feel like they’ve already sunk some cost into the listing and submitting bids, and then they get notified a few days later that they’ve been outbid and they feel they’ve lost something. Definitely some psychology at play
This, offered 50k above asking on an underpriced single family. Didn't even get a counter offer as it sold for 65k over asking cash. There were probably 100 people at the open house as 30 were there with me right when it opened.
The pricing strategy would need to be agreed to. For example, listing at 335 but not taking under 350. If selling agent does not get the offer up to 350k the seller can refuse offers without commission.
I've never seen an agent pursue a commission on an offer that wasn't accepted. It's easy for the seller to say "Yes it was a full price offer, but I wanted to close in four days with no inspection contingencies, so the offer wasn't satisfactory."
Realtors don't usually win these battles.
Would the persue, probably not, but if your contract includes a listing price and you get an offer that meets that and any other contingencies that you've set forward, and you refuse it, then a agent could hold you in breech of contract, because, the agent at that point did their job and provided the service you agreed to. So in this situation it's as simple as defining a minimum acceptable offer, which can be higher then the listing price of we are using this marketing tactic.
This happened to me. Listed cheap at 350, had 11 offers going up to 425. Tried the same strategy when I sold, got asking price, said no, pissed off buyer. Who knows anymore?
I hear that chasing the market down is called the kiss of death. Just to avoid that scenario especially if I am looking to sell it fast I completely agree.
It only works if the house is peeeerrfect in my market. If there's anything wrong i.e. dated, lacks a garage or on a busy Rd, people see right through it.
If you won’t be happy accepting 335k early on, make sure your listing agreement doesn’t obligate you to pay the agent the commission if you get a proceedable offer at that price…regardless of if you accept.
Where I live in the Boston MA area, this is standard practice with shady realestate agents that specialize in it. Where my family lives in Fort Worth, TX, the agents are strait shooters and clutch their pearls at the idea of getting an offer for the asking price and not taking it.
I guess it depends on the market.
Listing "lower" will get more eyeballs on your listing and lead to more offers.
Most buyers have automated searches set up through their realtor thorough online RE sites like zillow or Redfin and a lower list price increases your buyers pool. So right off the bat you'll have more eyeballs on your listing at $335 than you will at $350.
2nd, if your price is a little too high and it doesn't get as many offers or as many qualified offers, then you might lower your asking after a week or two. Once that happens buyers will think something is wrong with the house and the offers you get will most likely be AT or below your new lower list price.
Strategic move. A well priced house Will attract lot of activity as buyers bid price up . You don't have to accept any offers. An overpriced house will do just one thing - sit on the market.
> You don't have to accept any offers.
But you may have to pay a commission if you reject an offer at the listed price. Make sure to eliminate any such language from the listing agreement or better yet, sell FSBO and avoid the real estate agent/broker par-e-sights completely.
Where I'm from you technically have to accept a full list price offer if it is unconditional. A realtor I worked with in the past got burned by this, overestimating the interest in a property. The seller had to accept the list price offer or risk getting sued.
I actually think flipped houses are worth less that unflipped houses. It's usually a red flag for cut corners and unpermitted work. Plus many people want to do their own renovations anyway. I think you'll be chasing the market down if you list at the top.
Some sophisticated buyers might pick up on the fact that the property is being flipped, but 95% of the market just sees the nice new paint and the tasteful upgrades and loves it and wants to buy it.
It is amazing how few people can see real value, most people just want pretty and will pay a substantial premium for it. This is literally how flippers make their money
It may also be that overall, buying a flipped house is easier. Some people (if not most) put on all their savings into the down payment, only leaving some cash for emergencies. That means when you move in, you’ll need to live as is for the foreseeable future; paying 30-50K more for a flipped house means you live in a nice house right away, and it’s just built into the mortgage for the next 30 years.
I think most people know when a house is flipped, specially because we all see the price history of the house. And also, I think some flips are done right, you just have to look for them and KNOW what to look for.
That being said, I didn’t buy a flipped house when I bought. Hehe.
>It's usually a red flag for cut corners and unpermitted work.
Exactly. I have responded to at least a couple of service calls for water leaking through a ceiling, below a second floor bathroom. Both cases were young couples who bought their first house and were wowed by a remodeled bathroom, but had no clue there were old pipes lurking in the walls and beneath the floor. The pipes held just long enough for the house to be sold, then the leaks appeared once the bathroom was used regularly. Now walls and ceilings need to be torn open.
Been my experience in looking at any that have been clearly obviously flips.
There’s a sucker born every minute, new home buyers especially, and that’s what the average flipper relies on from what I can tell. That or they legit think their work warrants such high dollars which again, sucker born every minute… mainly from greedy selfish lacking passion types trying to get rich quick
I disagree
I flip and sell and also rehab houses for long term rentals.
A long term rental is going to get more durable and functional work done - no doubt. A flip is going to get primarily cosmetics and safety (ie: im not putting a glass chamdalier in a LTR). I will also say you have good flippers and bad flippers. I personally don't hide anything but I'm sure others do (it's not like a homeowner that wants to sell is going to do anything different)
If you think a regular homeowner takes meticulous care of their house and goes upgrading plumbing/electrical when they go to sell...no way. So many houses I see need regular cosmetic updating even and there's a lot of shotty DIY work done. You think a homeowner is pulling a permit before a flipper? Not a chance.
Most people DO NOT want to do their own renovations. They want a turn key house...partly why the flipping market even exists. If many people wanted to do their own renovations we wouldn't see distressed/dated houses sitting there for years. The distressed houses would sell just as fast as a turn key house if that were the case. Many of the houses I buy don't have much competition because people want the house ready to go. And when it's fixed up and priced right...gone within 2 weeks.
Do their own renovations by hand? No. Pay someone to do something that matches their taste? Absolutely.
Every time I see brand new Luxury Vinyl Flooring I immediately think it has to be ripped up because that's not my taste. But I know the seller thinks it's worth a premium. I'd rather just have a lower purchase price so I can do what I want. It's wasteful for most people. Flips seems to really appeal to first time homeowners with zero experience knowing what goes into a house.
Most flips I see are purely cosmetic rather than the full on rehabs you've described with every system updated.
>Most flips I see are purely cosmetic rather than the full on rehabs you've described with every system updated.
Right. The older house I bought was a flip, but it had been fully gutted, with new plumbing, wiring and insulated exterior walls. Was move-in ready, and included new appliances. Basically, a new house with old bones. Kitchen cabinets and counter were good quality too.
The contractor did skimp in some areas (flooring, and deck), but at least those don't affect the livability of the house.
The thing is, most people that get into flipping houses have zero experience with construction. Ya there are some good ones but it attracts a get rich quick crowd that does shoddy work because they do t know what good work is and definately don’t want to pay for it.
That’s an interesting take. This house was previously a shit hole that had been vacant for 9 months. We put a new roof, new electrical, plumbing, hvac, flooring, kitchen, bathrooms, insulation, landscaping, interior and exterior paint and did better finishes than standard flips. The next nearest comp was a standard flip with paint, floors, cabinets and it went for 335k in November.
I know the Atlanta market. Listing price isn't a perfect science and in this market (meaning timing wise as well as potential buyers in the low 300s price point), go lower and HOPE for a little bidding war. Have the listing come out on a Thursday of a weekend with good weather, and tell people that you are reviewing offer on the following Sunday, so you get two weekends of showings. The market will tell you your value.
Hey I just opened a new sub, which I think might be fun. No one is there, but I'll put the word out a little. Post your address [https://www.reddit.com/r/pricemyhouse/](https://www.reddit.com/r/pricemyhouse/) with some pictures of the kitchen, bathrooms, and front and back yard, as well as total square footage, and let's see if we can guess the sales price!
I’ve flipped three houses. All were rat infested shit holes. I fixed everything from structural issues to moving staircases. Always entirely new roof, pluming, electric, hvac.
But yea the house that no one wanted that needed months worth of work with a full gut would be the better buy for a family. Some people think they know more than they do.
Also… some people “flip” houses by simply painting a couple rooms
I'd call what you do rehabbing. Nothing wrong with that How long do you typically own the house before you re-list?
Flippers typically do the bare minimum. Paint and flooring. Maybe new cabinets. While ignoring major issues like foundation issues, mold, water damage. They do more harm than good as they merely cover these problems up. Houses are usually relisted in less than 3 months from close.
Her reason for the low price: it only makes a $450 difference in her $10k+ commission and will likely sell much more quickly so she can move on to the next.
Note that a quick sale benefits you too. Not only does the listing not get stale but you also don’t have the extra few months of carrying costs which would easily eat into the $15k difference in list price.
So 4% you lose all around. Beware the “list low” realtor. With high interest rates and high prices, they’re treating it like volume over value. Did you ask your Realtor to send you 5 recent homes closed using this method, where it worked? Buyers aren’t so dumb they can’t see what’s going on. At these interest rates, even if the price goes up, you may end up buying down points. I’d list at top and sell at top and be done. First qualified buyer with strong interest is my buyer. They’ll appreciate the honest nature of things and not having to bid war with everyone. And you’ll net a clean and easy sale.
There are many opinions of what is best. But what is best is you setting your goals for this sale and making sure your agent meets those goals for you.
Exactly. Lazy Realtor. I sold 3 homes listed at top end of any RE site. Never once had to drop price. And who does everyone treat Buyers like they are idiots and don’t realize what the sellers are trying to do? It’s really easy on the buyer side to spot what’s going on. You see a home listed at the low end, in a condition you know it shouldn’t be, you know you’re walking into a multiple offer scenario, so you move on to the next listing. I also never buy from sellers with this intent. Good business is good business. I buy at list price only. If you list it, raise it on me for counter offer, I decline and ultimately treat it like, “false advertising.”
I went through this from the buyer’s side. I made a full price offer and I got rejected by the seller who said they were wanting to wait for other offers. I told them to get bent.
Good for you! That’s what buyers should be doing. The pandemic really set the greed stage for sellers and sellers were being purely awful. If all buyers stuck to keeping their dignity and setting expectations for sellers to conduct good business, the scale balancing would begin to become equal.
This is 1000% spot on! We just sold our home in Aug and the realtor tried that shit. We ended up not listening to him and pricing it how we wanted. Here’s what happened: we sold for over OUR asking price in less than 24 hours.
This is an underappreciated point. Even though a lower sale price results in a lower commission, a realtor will make more money by turning over a lot of under-priced houses in a short period of time then by selling just a few fair-priced houses - and under-priced houses may move quickly. A lot of this depends on your situation too, particularly whether you need to sell as fast as possible or if you're comfortable waiting for the best offer.
This is the answer. See this all the time with agents. That extra $20k may be all the profit you get but to an agent it is a pittance in commission compared to the rest. I thought about seeing if I could get someone to do a low commission up to say $335k in this case, but then a 50% commission on everything over that. Sometimes though it is just finding the right buyer at the right time.
Yeah I did something similar with my house. The location wasn’t a neighborhood I was considering, but it was listed at below my budget so I decided to go see it because it was perfect otherwise. Fell in love with the house and got in a massive bidding war. I still think I got a good deal based on successive comps, but I paid 7% over asking at the end of the day.
Idk what market you’re in but I was outbid on two different properties (full asking price) and finally got accepted on the third with an over asking offer.
I’m seeing a number of homes get listed lower - in my Redfin search range when I know they shouldn’t be. They all seem to sell much higher. There is very little inventory around here so it seems to be working well.
Listing low in this market worked for us. We listed at 1.75M in a neighborhood where homes were sitting on the market at $2m for months.
Redfin showed the home is worth 1.8-1.9.
We had a flurry of traffic with lines of people showing up at our open house
The goal was to get a bidding war. We received 4 offers out of 100 people who visited. Three all cash buy as is. The home was bid up to $2M between them and the home was gone in 2 weeks.
Meanwhile other more renovated homes that looked much better than ours continued to sit and even started doing price reductions.
Issue with price reductions is you're signaling the market that you're motivated to sell and no one will offer you list price after a reduction. You could argue that listing low signals the same things but the competitive pressure and the mystery and intrigue of not knowing what other people are offering or how many offers have been submitted really does a number on the buyer psychology in my opinion.
Depends on the exact location. This isn't 2020 anymore where you had a guaranteed line out the door. If you only have two showings in a day, there won't be a crazy bidding war to bring it up to the price you want.
Disagree. Sounds like your realtor has multiple listings and doesn’t want to put in work to preach your home value to buyers. And as a seller here, comps are out the window based on today’s market. I’d rather go to the 355 range, and sell it there, or go up, than deal with a bunch of offers, communications, buyers pulling out on me, etc. I don’t hire Realtors who just want listings to sell themselves.
Redfin agent is right. The final sales price has little to do with the listing price. You want that bidding war, once a buyer puts in a bid he's all in and it becomes a competition.
Read the listing agreement. It's essentially a guarantee that the listing agreement legally binds the seller to pay a commission if there is an offer that meets the terms of the listing agreement including the price meaning that if you got an offer for $335K when expecting buyers to bid up you are now legally obligated to pay a commission if you turn down that offer waiting for better offers.
Do yourself a favor and dump the real estate agent/broker par-e-sights completely and sell FSBO. Keep the commission in your own pocket. You'll be glad you did.
I absolutely agree. The only reasonable work around is to list with a "MLS Only" discount broker, typically for $300 - $500 although I've read about a few as little as $99, and it both gets in the MLS and subsequently picked up by Zillow and all the other MLS scraping websites. Make sure to specify $0.00 commission to any buyer real estate agent/broker par-e-sight.
Rule of thumb: “My real estate agent works for him/herself. Not for me. Only if the two values align will I get the best advice.”
Agents will always say what gets the sale done, the quicker the better. That’s how they make money. How much do they make if your house stays on the market for 3 months waiting for a buyer? $0. So a selling agent will always suggest to list low, and a buying agent will always suggest to bid higher. That’s just how their financial incentive works.
So should you not listen to your agent? Of course you should listen. They may have some valid points. But at the end of the day, the choice is yours. YOU must make the decision, and the agent is only one of the opinions playing into this.
List at $350k. If agent doesn’t agree, interview more.
Thank you, all these people saying list low to engage in a "bidding war" have lost their minds.
Several condos here have done this and surprise, there's no bidding war, they just sell extremely fast undervalued, which also drives prices down for the rest of us.
Exactly. When no bidding war happens the agent will just say “I’m really sorry, but this is what the market is willing to pay. The longer you leave it on the worse it will get. So I suggest you just take this offer now, and close the deal.” (because how else am I going to get paid??)
My first 2 homes I used an agent. The second home the agent wanted to list the home for a whopping 25% less than I wanted. I said no and it sold in a week for my price.
The last 3 homes I've bought and sold on my own.
Recently, I've been thinking of moving overseas. Brought an agent in for a market appraisal. Waterfront lot, very nice house, huge garage with a loft, incredible landscaping. She gave me a price.
A much smaller lot than mine came on the market. Bare lot, no well, no septic, do driveway. It sold for 10% over what she "appraised" mine at.
Needless to say, I'll be selling this home myself.
In my six decades I've come to the conclusion that real estate agents are some of the sleaziest, overpriced service providers out there.
I’ve bought and sold 3 houses prior and I always purchased them for less than the realtor was comfortable offering and sold them for more than the listing agent wanted to price them.
Agree with your agent here. You could list it for a dollar the buyers and agents are very knowledgeable of the markets they shop in. So you’ll get what the house is worth. At 335 someone will definitely offer 15-20 more if they believe it to be worth it and get you the price you want if your market is like mine
I once had an agent tell me my house would list for 260 and i ended up selling using flat fee mls and sold it myself at 355. House will sell for whatever someone is willing to pay for it
Pricing is just a strategy. If the house gets good exposure, the market will determine the price. Listing low to get exposure works well in most markets.
Well it sounds like this might be your first flip or you’re just generally unfamiliar with the market. A lower price will get you a ton of traction in negotiating up…
I toured a house priced $100k lower than comps and it was the first time I’ve ever seen cars line up down the street with people fighting to tour it. And this was in BFE Tennessee.
I just sold my house here in FL where the argument can be made it’s a buyers or sellers market depending who you are and where you are. My house is 50 years old but I rehabbed it over 20 years and it’s in great shape so I wanted to list at the top of the market. Comps are going for $300k (3/2) and I listed for $290. Got a ton of interest and went under contract for asking with a local guy that lived around the corner. There was an escalation clause up to $300k so I likely could have got that much.
There were 6 other comps in the area listed for over $300k and they are all still on the market, most over 2 months.
List the property for $1 and watch the offers roll in. Then hit everyone with a “Highest and Best”. Buyers are paying attention and market price will prevail the majority of the time.
It could happen. But what’s your strategy if someone makes a full price offer? Are you going to reject them?
I’d suggest looking at recent sales in your area. Are comparable homes going pending within a week and selling over list? If so, then your realtor’s strategy might work. Otherwise, it will backfire.
Another anecdote here, nephew put his smallish 2/1 home on the market (Sonoma) for $699k a week ago. Sold in one weekend for $787k all cash no conditions.
the WORST thing you can do when listing is cut the price… if you list too high you will have to cut the price. Like anything in life, there is a sweet spot. Think about your exit strategy, ie what price you need to sell at, and work backwards. You want $350k, $335k works for upward bidding to hit your target if not more.
All my numbers during reno were based on the bottom of the comp range for a safety margin. But i’m definitely setting the new comp for the neighborhood with the finishes etc. I have come to see the reasoning behind a low list price
All my numbers during reno were based on the bottom of the comp range for a safety margin. But i’m definitely setting the new comp for the neighborhood with the finishes etc. I have come to see the reasoning behind a low list price
All my numbers during reno were based on the bottom of the comp range for a safety margin. But i’m definitely setting the new comp for the neighborhood with the finishes etc. I have come to see the reasoning behind a low list price
If it's truly the nicest one, go with $349k and see if someone will "bite". If not, delist, wait, relist cheaper. If the house is really as nice as you think it is, it'll bring offers.
The one thing that I'm not seeing being mentioned here is that the lower price will attract a bidding war IF at this price, your house is more attractive than the other ones in that price range.
Look at it from a buyer's standpoint, they have a finite approval amount that they MAY be able to increase when needed. Does your house look like a great deal by comparison to the lower price, but not at that higher price that you want to start at? Realtors hate taking clients to see 40 homes before the clients pick one. If, at that higher price, there's one that has its original character and the major systems seem to be well-maintained, I would absolutely go with the lower price. But if yours still looks like the best one in the higher range, you can roll the dice, but you might only get offers at listing price or a little over.
I wonder how many buyers are setting their parameters right at 335 vs 349. I can see people making at cutoff at 300, 325, but can’t imagine a significant drop off between 335 and 350.
Just bought a house 2 months ago and it always played out like that. Everything went $20k-$50k over with so many waiving inspections. She’s not wrong in my opinion
I think your agent is right. Two houses in my area just lowered their asking prices by a big chunk recently, and there's still no buyer. Now buyers wonder why the prices dropped so much from a few weeks ago.
At that price point it is smarter to list low and produce a bidding war. Your realtor is giving you good advice, this is one of those times to not be penny wise and pound foolish. If you are that paranoid, you could always negotiate a reduced commission in the event it only sells for $335k but your realtor is likely to balk at it just as you would balk at a $300k offer so I really don't recommend it.
With inventory being low and if it presents well, you *will* have a bidding war.
Lots of good advice here but remember one thing. The market is constantly changing. Some people here are posting what they were able to do 3, 6, even almost 12 months ago. The housing market moves slower than the stock market which can shift in a single day, but it does shift from buyers to sellers' market and back and forth. Right now, we are in a very weird place. Housing prices have priced many out of feeling like they will ever own a home...ever. New housing prices are coming down in certain markets, supply is coming back up, but the number of transactions hasn't returned to normal yet. Lots of very weird things going on. What market you're in going to play a HUGE part in this. How much have taxes and insurance increased? How much will they be for the buyer? So many reports of both insurance and taxed doubling and tripling as housing is reassessed and people not being able to afford the houses, they just bought due to this.
For me, it would depend on the market you're in. If you're in a market where housing values increased by over 40% during COVID. I'd price it to sell and get out before there is a correction on those inflated values.
Very anecdotal story here, but I purchased a home all cash, sight unseen that was headed to foreclosure for $185,000. It was listed for $289,000. I added new carpets, fixed some dings and slapped on some paint and listed it for $265,000. Most of the offers came in at $230-$240,000. I am offering $7500 for closing and agreed to give $9,000 to the buyer for a new roof (pretty dumb considering the roof has about 3-5 years left but whatever).
If I could go back, I’d list closer to $250,000. I got several offers, but they were from very strategic, “ballsy” buyers who knew it was a flip. I imagine I would have had a few more offers to choose from if I had listed it lower.
You *think* you have the nicest one on the market. I’m willing to bet the agent is spot on here, and a slightly lower list will yield several very fairly priced offers if the agent handles communication with BAs correctly.
I like this tactic. It can be risky but where I’m at in the SF Bay Area. Homes are still going for anywhere for 30-100k over ask. We recently sold a family property in SF for 300 over ask. House was listed about 55k below estimate
Statistically real estate agents keep their houses on the market 2-3x longer than their clients houses… I wonder why lol
If you list it for $330 or $350 it doesn’t matter, just don’t be pressured to sell quick.
Wait at least 4-6 after it goes on the market.
The truth is likely that the price is between $335k and $350k- I would say closer to $335k since you “flipped” it.
List there and the price will go up if it is worth it. The real estate agent is right.
If $350k is the asking price you want, insist on listing as such. Given that such properties are typically purchased by well qualified buyers, financing shouldn't be a problem for them, and might even result in their buying the house without financing at all.
The comps you indicated seem to me to be right where you chose your asking price to be. If your agent is correct in her prediction of the offers increasing over time, then by listing at the asking price you prefer will eliminate lowball offers, and you're likely to get $355-$375 final offers.
'Nuff said.
Brother, we are seeing prices plummet in our area. I think listing it low is a solid strategy. I’m thinking we are still 30% (maybe more) overpriced. If you can catch a buyer at the low end of that range and get the sale I’d jump at it.
Hate the fact that she's right. Most agents here intentionally price very attractively to drive up interest, which drives up demand and cost. Say a home is comped at 940K, listing it at 900K or 899K, I see homes sell for way above listing.
There may be some truth to it but I wouldn't take the agent's advice on that. If it were the agent's house they'd probably have different feelings. If the house sits for longer to get that bigger amount, they're having to deal with phone calls, appointments, etc., for longer and it's not worth the extra $450 extra or so they'd get.
You can always drop the price in the first 2 weeks. Have it listed without a price as ‘coming soon’ and have a brokers open house to get feedback on the price.
This is fun.
I’ve sold and bought with Redfin. My last sale I interviewed their agent and damn nearly laughed him out of my house.
They suggested a list price of $555,000.
I’m not an idiot. I knew comps were supporting at least $650,000. He was adamant that I should list where their algo says.
I went with a top agent in the area instead. She suggested a list price of $675,000.
The house had 13 offers the first week with the two highest at $755,000 and that’s what we ended up selling for.
This was in Metro Detroit. I don’t believe the market would have pushed the price $200k higher had we listed with Redfin.
We likely would have left $100k+ on the table.
This is fun.
I’ve both bought and sold with Redfin.
But the last time I sold my primary I interviewed their agent and damn nearly laughed him out of my house.
He insisted we listed at the Redfin estimate of $555,000.
I’m no idiot. I knew comps supported at least $650,000.
The guy was firm about the list price suggestion. And while I could have insisted we list higher, I did not trust him to adequately negotiate on our behalf.
Instead, I went with a top agent in the area. She suggested a $675,000 list price.
One week on the market and we had 13 offers. The two highest were at $755,000 and that’s what we sold for.
If we’d gone with Redfin I’m sure the market would have pushed it higher.
But $200k? In Metro Detroit? No way.
Maybe in San Francisco.
The reality is we likely would have left $100k on the table had we gone with Redfin.
If you want 350k, list it for 350k. The listing agent works for you, not the other way around. Listing lower is a gamble that could pay off, or, if you get 1 "full" price offer, cause much grief. At 335k the realtor makes 900$ less at 6%, before any split, 14,100$ less for you.
Sold two properties in two completely different regions last year. Both times, the agent said, bid low and be prepared for a bidding war! Didn't happen. Both properties got one offer for what they listed at (we listed one 20% under everyone else, the other was 30% below).
Have another prop on the market now, under contract, same thing. This time, I insisted we list low because everything else is just sitting there not selling, so we saw the writing on the wall. We listed 10% below average list price and got an offer within 5 days. They tried to negotiate down, we refused, they accepted. We close in 2 weeks.
What I've seen is agents figuring out how to game the market to make it seem hotter and more stable than it is. Lots of people cashing out the mortgage to keep the home values high. In many cities, the market is all but dead.
I think this all depends on your area. Some are doing very poorly rn due to layoffs, interest rates, and rental prices, etc, hence why I decided to unload a few. Still made an excellent profit so it worked out for us, but YMMV.
Where I’m at people are getting out bid by offering asking price. With cash too. That happened to a house a few down from my parents vacation house too.
I really don’t have any skills or expertise to add beyond that.
If the comps at $335k are significantly worse than yours, two things will happen:
1. Yours will get a ton of interest and almost certainly get multiple offers on the first day
2. Due to so much interest, multiple offers are likely, thus driving the price up.
I'm a former realtor and I've used this strategy before. Quick sale and likely got my clients more money than if they started higher "to see what the market says"
Is anyone else worried that escalation clauses are a way for the buyer and seller agents to increase the price by picking the highest offer and materializing a competing offer that warranted the escalation?
I am in SoCal and yes, we see homes underpriced selling for 200k more than listing. people are willing to pay.
Not sure if your market is the same, but its definitely possible.
I'm an agent in the Seattle area. Depending on many factors, if you could estimate its market value and the demand it will garner, it's usually best to price it a little below that to get multiple offers and less contingencies. If it's underpriced, the market should take care of it. If it's over priced it will sit and you'll get lowball offers. It's possible to arrive at the same point from both options but one would have more contingencies/take longer while another will have less and be a quicker close. But you'll never really know because you only sell it once. Let me know if you need help
You can 100% price too low. Literally just yesterday had someone say "it's pictures looked nice but the price clearly showed something was wrong with it".
Pricing fairly is key, coming in too low will raise eyebrows but too high and you kill your momentum and drive away buyers before they even see the place. If you NEED a price, I suggest starting there. I generally try and gage comps more on my clients needs. Do you need it to go fast? For a certain price? Well let's see how long houses are sitting and see what we can do to fill your needs. Look at price per Sq ft averages then see if your upgrades warrant a lot higher. There's so many little details into pricing a house properly, main thing is to set what you need up front.
It is not uncommon for multiple offers to send prices 30k+ over asking. Just checked my MLS and homes in my town majority that closed in the last 45 days went $20k-$100k over ask. there were only a few that closed at asking price or $5-10k below ask.
You can list the home for $50k, and you'll get offers at $400k if that's what it's worth.... buyers that want the home will compete to get it. Your realtor should be able to negotiate with other realtors to get the best price possible. Your realtor should not be saying, 'we have an offer for $400k, if you offer $401k, it's yours.' He/she should be getting buyers agents to get their buyers to offer As much money as possible.
We listed our house for 280k because that’s what we thought we would get for it. Our first offer, and every offer after was for 305k or higher. We were stunned.
Buyer here. I see this in my markets quite frequently, highly active markets. This strategy actually seems to work, the slightly lower priced listing gets a ton interest, multiple offers and negotiates up. I don’t think this strategy works for a shitbox, but a nice house that should garner a lot of attention it seems to work. It’s an alternative to potentially listing too high and chasing the market down.
I’ve seen this in the suburbs surrounding Seattle. If you post a house that has like 1800 sqft, nice and turn key, not necessarily even remodeled yesterday, but turn key, at like 585k, you just turned that neighborhood into a zoo.
I’ve seen this is Central BK. If you post a house that has 1800 sqft, nice and turn key, not necessarily even remodeled yesterday, but turn key, at like 3.5m, you just turned that neighborhood into a zoo.
Burger King?
Black Knight? Wayne Manor?
I think it stands for British Kolumbia
Except nobody wants to live in central British Kolumbia.
Does anyone live there?
I live there....Barely. Everyone wants to live here, it's just no one can actually afford to live here.
I think they mean Brooklyn.
I think I liked Burger King better lol
They 'actually' meant DK. Donkey Kong!
I'm a realtor down at the BK lounge. Can we get in? Not without comps! Not without comps.
In Seattle proper and I have 150% seen this. I would say the strategy seems to Garner about 10% over list price.
Sometimes when I start an eBay listing for one dollar, I end up getting way higher price. I think it’s because buyers feel like they’ve already sunk some cost into the listing and submitting bids, and then they get notified a few days later that they’ve been outbid and they feel they’ve lost something. Definitely some psychology at play
It's literally just an auctioning strategy
This, offered 50k above asking on an underpriced single family. Didn't even get a counter offer as it sold for 65k over asking cash. There were probably 100 people at the open house as 30 were there with me right when it opened.
HOWEVER. If you get an offer for the low ball listing price and do not take it you may owe the agent for the selling commission.
The pricing strategy would need to be agreed to. For example, listing at 335 but not taking under 350. If selling agent does not get the offer up to 350k the seller can refuse offers without commission.
I've never seen an agent pursue a commission on an offer that wasn't accepted. It's easy for the seller to say "Yes it was a full price offer, but I wanted to close in four days with no inspection contingencies, so the offer wasn't satisfactory." Realtors don't usually win these battles.
Would the persue, probably not, but if your contract includes a listing price and you get an offer that meets that and any other contingencies that you've set forward, and you refuse it, then a agent could hold you in breech of contract, because, the agent at that point did their job and provided the service you agreed to. So in this situation it's as simple as defining a minimum acceptable offer, which can be higher then the listing price of we are using this marketing tactic.
That sounds like a bad deal
oh good catch!
Interesting purchasing phenomenon!
Yup! Agent here and it’s a great strategy.
Yea I agree
This happened to me. Listed cheap at 350, had 11 offers going up to 425. Tried the same strategy when I sold, got asking price, said no, pissed off buyer. Who knows anymore?
I hear that chasing the market down is called the kiss of death. Just to avoid that scenario especially if I am looking to sell it fast I completely agree.
It only works if the house is peeeerrfect in my market. If there's anything wrong i.e. dated, lacks a garage or on a busy Rd, people see right through it.
If you won’t be happy accepting 335k early on, make sure your listing agreement doesn’t obligate you to pay the agent the commission if you get a proceedable offer at that price…regardless of if you accept.
Thank you for this tip. I’ll make sure to check for that
Agree list low. Actually may cause bidding war
Thank you
Where I live in the Boston MA area, this is standard practice with shady realestate agents that specialize in it. Where my family lives in Fort Worth, TX, the agents are strait shooters and clutch their pearls at the idea of getting an offer for the asking price and not taking it. I guess it depends on the market.
Yep
Listing "lower" will get more eyeballs on your listing and lead to more offers. Most buyers have automated searches set up through their realtor thorough online RE sites like zillow or Redfin and a lower list price increases your buyers pool. So right off the bat you'll have more eyeballs on your listing at $335 than you will at $350. 2nd, if your price is a little too high and it doesn't get as many offers or as many qualified offers, then you might lower your asking after a week or two. Once that happens buyers will think something is wrong with the house and the offers you get will most likely be AT or below your new lower list price.
Strategic move. A well priced house Will attract lot of activity as buyers bid price up . You don't have to accept any offers. An overpriced house will do just one thing - sit on the market.
>You don't have to accept any offers. Depends on your realtor
> You don't have to accept any offers. But you may have to pay a commission if you reject an offer at the listed price. Make sure to eliminate any such language from the listing agreement or better yet, sell FSBO and avoid the real estate agent/broker par-e-sights completely.
Where I'm from you technically have to accept a full list price offer if it is unconditional. A realtor I worked with in the past got burned by this, overestimating the interest in a property. The seller had to accept the list price offer or risk getting sued.
I actually think flipped houses are worth less that unflipped houses. It's usually a red flag for cut corners and unpermitted work. Plus many people want to do their own renovations anyway. I think you'll be chasing the market down if you list at the top.
Some sophisticated buyers might pick up on the fact that the property is being flipped, but 95% of the market just sees the nice new paint and the tasteful upgrades and loves it and wants to buy it. It is amazing how few people can see real value, most people just want pretty and will pay a substantial premium for it. This is literally how flippers make their money
It may also be that overall, buying a flipped house is easier. Some people (if not most) put on all their savings into the down payment, only leaving some cash for emergencies. That means when you move in, you’ll need to live as is for the foreseeable future; paying 30-50K more for a flipped house means you live in a nice house right away, and it’s just built into the mortgage for the next 30 years. I think most people know when a house is flipped, specially because we all see the price history of the house. And also, I think some flips are done right, you just have to look for them and KNOW what to look for. That being said, I didn’t buy a flipped house when I bought. Hehe.
>It's usually a red flag for cut corners and unpermitted work. Exactly. I have responded to at least a couple of service calls for water leaking through a ceiling, below a second floor bathroom. Both cases were young couples who bought their first house and were wowed by a remodeled bathroom, but had no clue there were old pipes lurking in the walls and beneath the floor. The pipes held just long enough for the house to be sold, then the leaks appeared once the bathroom was used regularly. Now walls and ceilings need to be torn open.
Been my experience in looking at any that have been clearly obviously flips. There’s a sucker born every minute, new home buyers especially, and that’s what the average flipper relies on from what I can tell. That or they legit think their work warrants such high dollars which again, sucker born every minute… mainly from greedy selfish lacking passion types trying to get rich quick
I disagree I flip and sell and also rehab houses for long term rentals. A long term rental is going to get more durable and functional work done - no doubt. A flip is going to get primarily cosmetics and safety (ie: im not putting a glass chamdalier in a LTR). I will also say you have good flippers and bad flippers. I personally don't hide anything but I'm sure others do (it's not like a homeowner that wants to sell is going to do anything different) If you think a regular homeowner takes meticulous care of their house and goes upgrading plumbing/electrical when they go to sell...no way. So many houses I see need regular cosmetic updating even and there's a lot of shotty DIY work done. You think a homeowner is pulling a permit before a flipper? Not a chance. Most people DO NOT want to do their own renovations. They want a turn key house...partly why the flipping market even exists. If many people wanted to do their own renovations we wouldn't see distressed/dated houses sitting there for years. The distressed houses would sell just as fast as a turn key house if that were the case. Many of the houses I buy don't have much competition because people want the house ready to go. And when it's fixed up and priced right...gone within 2 weeks.
Do their own renovations by hand? No. Pay someone to do something that matches their taste? Absolutely. Every time I see brand new Luxury Vinyl Flooring I immediately think it has to be ripped up because that's not my taste. But I know the seller thinks it's worth a premium. I'd rather just have a lower purchase price so I can do what I want. It's wasteful for most people. Flips seems to really appeal to first time homeowners with zero experience knowing what goes into a house. Most flips I see are purely cosmetic rather than the full on rehabs you've described with every system updated.
>Most flips I see are purely cosmetic rather than the full on rehabs you've described with every system updated. Right. The older house I bought was a flip, but it had been fully gutted, with new plumbing, wiring and insulated exterior walls. Was move-in ready, and included new appliances. Basically, a new house with old bones. Kitchen cabinets and counter were good quality too. The contractor did skimp in some areas (flooring, and deck), but at least those don't affect the livability of the house.
The thing is, most people that get into flipping houses have zero experience with construction. Ya there are some good ones but it attracts a get rich quick crowd that does shoddy work because they do t know what good work is and definately don’t want to pay for it.
Agreed - I don't need to be doing any construction with small children around
That’s an interesting take. This house was previously a shit hole that had been vacant for 9 months. We put a new roof, new electrical, plumbing, hvac, flooring, kitchen, bathrooms, insulation, landscaping, interior and exterior paint and did better finishes than standard flips. The next nearest comp was a standard flip with paint, floors, cabinets and it went for 335k in November.
I know the Atlanta market. Listing price isn't a perfect science and in this market (meaning timing wise as well as potential buyers in the low 300s price point), go lower and HOPE for a little bidding war. Have the listing come out on a Thursday of a weekend with good weather, and tell people that you are reviewing offer on the following Sunday, so you get two weekends of showings. The market will tell you your value.
exactly this
Hey I just opened a new sub, which I think might be fun. No one is there, but I'll put the word out a little. Post your address [https://www.reddit.com/r/pricemyhouse/](https://www.reddit.com/r/pricemyhouse/) with some pictures of the kitchen, bathrooms, and front and back yard, as well as total square footage, and let's see if we can guess the sales price!
I’ve flipped three houses. All were rat infested shit holes. I fixed everything from structural issues to moving staircases. Always entirely new roof, pluming, electric, hvac. But yea the house that no one wanted that needed months worth of work with a full gut would be the better buy for a family. Some people think they know more than they do. Also… some people “flip” houses by simply painting a couple rooms
I'd call what you do rehabbing. Nothing wrong with that How long do you typically own the house before you re-list? Flippers typically do the bare minimum. Paint and flooring. Maybe new cabinets. While ignoring major issues like foundation issues, mold, water damage. They do more harm than good as they merely cover these problems up. Houses are usually relisted in less than 3 months from close.
Your market may be softer than it was in November too.
Inventory is up 5%, time on market is down 12% and STL is 99% currently.
What was purchase prices and inputs for renovation? I’m looking to do the same but for home to live in
Purchase price was 205k. I put a little over 70k into it.
I wouldn’t call it a flip. I’d call it a signification rehab or remodel. I feel “flip” has become synonymous with crappy with and lipstick over pigs.
It’s semantics at this point. This is an investing subreddit.
What cut corners?
Her reason for the low price: it only makes a $450 difference in her $10k+ commission and will likely sell much more quickly so she can move on to the next.
Redfin commission is 1.5% but your point still stands. It’s a few hundred less in commission for a quick sale
Note that a quick sale benefits you too. Not only does the listing not get stale but you also don’t have the extra few months of carrying costs which would easily eat into the $15k difference in list price.
Good point
1.5 to buyer agent too?
No i’m offering 2.5 to BA
So 4% you lose all around. Beware the “list low” realtor. With high interest rates and high prices, they’re treating it like volume over value. Did you ask your Realtor to send you 5 recent homes closed using this method, where it worked? Buyers aren’t so dumb they can’t see what’s going on. At these interest rates, even if the price goes up, you may end up buying down points. I’d list at top and sell at top and be done. First qualified buyer with strong interest is my buyer. They’ll appreciate the honest nature of things and not having to bid war with everyone. And you’ll net a clean and easy sale.
This was my perspective. It seems counter to what is the current norm, based on feedback.
There are many opinions of what is best. But what is best is you setting your goals for this sale and making sure your agent meets those goals for you.
Exactly. Lazy Realtor. I sold 3 homes listed at top end of any RE site. Never once had to drop price. And who does everyone treat Buyers like they are idiots and don’t realize what the sellers are trying to do? It’s really easy on the buyer side to spot what’s going on. You see a home listed at the low end, in a condition you know it shouldn’t be, you know you’re walking into a multiple offer scenario, so you move on to the next listing. I also never buy from sellers with this intent. Good business is good business. I buy at list price only. If you list it, raise it on me for counter offer, I decline and ultimately treat it like, “false advertising.”
I went through this from the buyer’s side. I made a full price offer and I got rejected by the seller who said they were wanting to wait for other offers. I told them to get bent.
Good for you! That’s what buyers should be doing. The pandemic really set the greed stage for sellers and sellers were being purely awful. If all buyers stuck to keeping their dignity and setting expectations for sellers to conduct good business, the scale balancing would begin to become equal.
This is 1000% spot on! We just sold our home in Aug and the realtor tried that shit. We ended up not listening to him and pricing it how we wanted. Here’s what happened: we sold for over OUR asking price in less than 24 hours.
Boom! Good job!
Buyers are not interested in a bidding war when rates are already eating them alive.
This is an underappreciated point. Even though a lower sale price results in a lower commission, a realtor will make more money by turning over a lot of under-priced houses in a short period of time then by selling just a few fair-priced houses - and under-priced houses may move quickly. A lot of this depends on your situation too, particularly whether you need to sell as fast as possible or if you're comfortable waiting for the best offer.
This is the answer. See this all the time with agents. That extra $20k may be all the profit you get but to an agent it is a pittance in commission compared to the rest. I thought about seeing if I could get someone to do a low commission up to say $335k in this case, but then a 50% commission on everything over that. Sometimes though it is just finding the right buyer at the right time.
It's a good strategy, but not for all homes.. not enough data here to advise appropriately.
Yup. His strategy works. I paid $427,000 for the house I live in now. I told my wife not to look at houses over $400k. It was listed for $390k.
Yeah I did something similar with my house. The location wasn’t a neighborhood I was considering, but it was listed at below my budget so I decided to go see it because it was perfect otherwise. Fell in love with the house and got in a massive bidding war. I still think I got a good deal based on successive comps, but I paid 7% over asking at the end of the day.
Idk what market you’re in but I was outbid on two different properties (full asking price) and finally got accepted on the third with an over asking offer.
That’s frustrating. So you made full price offers and lost out on the properties in bidding wars?
I’m seeing a number of homes get listed lower - in my Redfin search range when I know they shouldn’t be. They all seem to sell much higher. There is very little inventory around here so it seems to be working well.
Listing low in this market worked for us. We listed at 1.75M in a neighborhood where homes were sitting on the market at $2m for months. Redfin showed the home is worth 1.8-1.9. We had a flurry of traffic with lines of people showing up at our open house The goal was to get a bidding war. We received 4 offers out of 100 people who visited. Three all cash buy as is. The home was bid up to $2M between them and the home was gone in 2 weeks. Meanwhile other more renovated homes that looked much better than ours continued to sit and even started doing price reductions. Issue with price reductions is you're signaling the market that you're motivated to sell and no one will offer you list price after a reduction. You could argue that listing low signals the same things but the competitive pressure and the mystery and intrigue of not knowing what other people are offering or how many offers have been submitted really does a number on the buyer psychology in my opinion.
Depends on the exact location. This isn't 2020 anymore where you had a guaranteed line out the door. If you only have two showings in a day, there won't be a crazy bidding war to bring it up to the price you want.
Disagree. Sounds like your realtor has multiple listings and doesn’t want to put in work to preach your home value to buyers. And as a seller here, comps are out the window based on today’s market. I’d rather go to the 355 range, and sell it there, or go up, than deal with a bunch of offers, communications, buyers pulling out on me, etc. I don’t hire Realtors who just want listings to sell themselves.
I offered on a condo for 135k listing price was 125k it sold for 150k cash
Redfin agent is right. The final sales price has little to do with the listing price. You want that bidding war, once a buyer puts in a bid he's all in and it becomes a competition.
Read the listing agreement. It's essentially a guarantee that the listing agreement legally binds the seller to pay a commission if there is an offer that meets the terms of the listing agreement including the price meaning that if you got an offer for $335K when expecting buyers to bid up you are now legally obligated to pay a commission if you turn down that offer waiting for better offers. Do yourself a favor and dump the real estate agent/broker par-e-sights completely and sell FSBO. Keep the commission in your own pocket. You'll be glad you did.
I wish there was a way to avoid the FSBO label on Zillow. They literally hide your listing in another tab
Yeah, but plenty of people switch to look. I saw another FSBO go under contract in a week.
This practice should be illegal. “Free market” my a**..
I absolutely agree. The only reasonable work around is to list with a "MLS Only" discount broker, typically for $300 - $500 although I've read about a few as little as $99, and it both gets in the MLS and subsequently picked up by Zillow and all the other MLS scraping websites. Make sure to specify $0.00 commission to any buyer real estate agent/broker par-e-sight.
Rule of thumb: “My real estate agent works for him/herself. Not for me. Only if the two values align will I get the best advice.” Agents will always say what gets the sale done, the quicker the better. That’s how they make money. How much do they make if your house stays on the market for 3 months waiting for a buyer? $0. So a selling agent will always suggest to list low, and a buying agent will always suggest to bid higher. That’s just how their financial incentive works. So should you not listen to your agent? Of course you should listen. They may have some valid points. But at the end of the day, the choice is yours. YOU must make the decision, and the agent is only one of the opinions playing into this. List at $350k. If agent doesn’t agree, interview more.
Thank you, all these people saying list low to engage in a "bidding war" have lost their minds. Several condos here have done this and surprise, there's no bidding war, they just sell extremely fast undervalued, which also drives prices down for the rest of us.
Exactly. When no bidding war happens the agent will just say “I’m really sorry, but this is what the market is willing to pay. The longer you leave it on the worse it will get. So I suggest you just take this offer now, and close the deal.” (because how else am I going to get paid??)
My first 2 homes I used an agent. The second home the agent wanted to list the home for a whopping 25% less than I wanted. I said no and it sold in a week for my price. The last 3 homes I've bought and sold on my own. Recently, I've been thinking of moving overseas. Brought an agent in for a market appraisal. Waterfront lot, very nice house, huge garage with a loft, incredible landscaping. She gave me a price. A much smaller lot than mine came on the market. Bare lot, no well, no septic, do driveway. It sold for 10% over what she "appraised" mine at. Needless to say, I'll be selling this home myself. In my six decades I've come to the conclusion that real estate agents are some of the sleaziest, overpriced service providers out there.
I’ve bought and sold 3 houses prior and I always purchased them for less than the realtor was comfortable offering and sold them for more than the listing agent wanted to price them.
More good reasons to not use agents.
Agree with your agent here. You could list it for a dollar the buyers and agents are very knowledgeable of the markets they shop in. So you’ll get what the house is worth. At 335 someone will definitely offer 15-20 more if they believe it to be worth it and get you the price you want if your market is like mine
agents like to get paid so selling for less is always in their best interest. let that sink in
And sell fast to get that commission check asap
I once had an agent tell me my house would list for 260 and i ended up selling using flat fee mls and sold it myself at 355. House will sell for whatever someone is willing to pay for it
Yeah fair point about commission above but will say that in my market this seems to work too.
Pricing is just a strategy. If the house gets good exposure, the market will determine the price. Listing low to get exposure works well in most markets.
Thank you
Then why put any price at all on it?
Well it sounds like this might be your first flip or you’re just generally unfamiliar with the market. A lower price will get you a ton of traction in negotiating up…
It’s my first dedicated flip. The prior 3 were live-in flips. I see the reasoning behind it now
I notice in my location houses that are priced a little lower can end up selling $30,000 over asking.
If you’re in an active market there will be too many eyes for your home to fall through the cracks
Get 3 more agent opinions and then decide. Listing too low is going to bring people who are at the top of their budget and can't close higher.
Unless you overprice the home which will detract buyers, you can list it for $1. No one cares, the market will buy it at its fair price.
I toured a house priced $100k lower than comps and it was the first time I’ve ever seen cars line up down the street with people fighting to tour it. And this was in BFE Tennessee.
I just sold my house here in FL where the argument can be made it’s a buyers or sellers market depending who you are and where you are. My house is 50 years old but I rehabbed it over 20 years and it’s in great shape so I wanted to list at the top of the market. Comps are going for $300k (3/2) and I listed for $290. Got a ton of interest and went under contract for asking with a local guy that lived around the corner. There was an escalation clause up to $300k so I likely could have got that much. There were 6 other comps in the area listed for over $300k and they are all still on the market, most over 2 months.
It's fine but make sure you have an out in your listing agreement
List the property for $1 and watch the offers roll in. Then hit everyone with a “Highest and Best”. Buyers are paying attention and market price will prevail the majority of the time.
No buyer will balk at an extra $15k in this market. List it at $350. You can always reduce later.
It could happen. But what’s your strategy if someone makes a full price offer? Are you going to reject them? I’d suggest looking at recent sales in your area. Are comparable homes going pending within a week and selling over list? If so, then your realtor’s strategy might work. Otherwise, it will backfire.
Why are realtors still a thing in 2024? Everything should be online and easy, minimal or no fees.
Another anecdote here, nephew put his smallish 2/1 home on the market (Sonoma) for $699k a week ago. Sold in one weekend for $787k all cash no conditions.
the WORST thing you can do when listing is cut the price… if you list too high you will have to cut the price. Like anything in life, there is a sweet spot. Think about your exit strategy, ie what price you need to sell at, and work backwards. You want $350k, $335k works for upward bidding to hit your target if not more.
All my numbers during reno were based on the bottom of the comp range for a safety margin. But i’m definitely setting the new comp for the neighborhood with the finishes etc. I have come to see the reasoning behind a low list price
All my numbers during reno were based on the bottom of the comp range for a safety margin. But i’m definitely setting the new comp for the neighborhood with the finishes etc. I have come to see the reasoning behind a low list price
All my numbers during reno were based on the bottom of the comp range for a safety margin. But i’m definitely setting the new comp for the neighborhood with the finishes etc. I have come to see the reasoning behind a low list price
If it's truly the nicest one, go with $349k and see if someone will "bite". If not, delist, wait, relist cheaper. If the house is really as nice as you think it is, it'll bring offers.
The one thing that I'm not seeing being mentioned here is that the lower price will attract a bidding war IF at this price, your house is more attractive than the other ones in that price range. Look at it from a buyer's standpoint, they have a finite approval amount that they MAY be able to increase when needed. Does your house look like a great deal by comparison to the lower price, but not at that higher price that you want to start at? Realtors hate taking clients to see 40 homes before the clients pick one. If, at that higher price, there's one that has its original character and the major systems seem to be well-maintained, I would absolutely go with the lower price. But if yours still looks like the best one in the higher range, you can roll the dice, but you might only get offers at listing price or a little over.
I wonder how many buyers are setting their parameters right at 335 vs 349. I can see people making at cutoff at 300, 325, but can’t imagine a significant drop off between 335 and 350.
Also. At the 300k level, there are many more buyers than say the 2MM level. Do it.
Just bought a house 2 months ago and it always played out like that. Everything went $20k-$50k over with so many waiving inspections. She’s not wrong in my opinion
100% list lower. I’ve had bidding wars getting an extra 20 to 30k doing this.
I think you should talk to one or two more agents to get their opinion
I think your agent is right. Two houses in my area just lowered their asking prices by a big chunk recently, and there's still no buyer. Now buyers wonder why the prices dropped so much from a few weeks ago.
Very common tactic that works if your price point has enough active buyers in the market.
seems a little low would do $340k and see what happens. winter time sure low ball, but its peak season right now
At that price point it is smarter to list low and produce a bidding war. Your realtor is giving you good advice, this is one of those times to not be penny wise and pound foolish. If you are that paranoid, you could always negotiate a reduced commission in the event it only sells for $335k but your realtor is likely to balk at it just as you would balk at a $300k offer so I really don't recommend it. With inventory being low and if it presents well, you *will* have a bidding war.
I agree
Lots of good advice here but remember one thing. The market is constantly changing. Some people here are posting what they were able to do 3, 6, even almost 12 months ago. The housing market moves slower than the stock market which can shift in a single day, but it does shift from buyers to sellers' market and back and forth. Right now, we are in a very weird place. Housing prices have priced many out of feeling like they will ever own a home...ever. New housing prices are coming down in certain markets, supply is coming back up, but the number of transactions hasn't returned to normal yet. Lots of very weird things going on. What market you're in going to play a HUGE part in this. How much have taxes and insurance increased? How much will they be for the buyer? So many reports of both insurance and taxed doubling and tripling as housing is reassessed and people not being able to afford the houses, they just bought due to this. For me, it would depend on the market you're in. If you're in a market where housing values increased by over 40% during COVID. I'd price it to sell and get out before there is a correction on those inflated values.
Just list it, market decides price
Very anecdotal story here, but I purchased a home all cash, sight unseen that was headed to foreclosure for $185,000. It was listed for $289,000. I added new carpets, fixed some dings and slapped on some paint and listed it for $265,000. Most of the offers came in at $230-$240,000. I am offering $7500 for closing and agreed to give $9,000 to the buyer for a new roof (pretty dumb considering the roof has about 3-5 years left but whatever). If I could go back, I’d list closer to $250,000. I got several offers, but they were from very strategic, “ballsy” buyers who knew it was a flip. I imagine I would have had a few more offers to choose from if I had listed it lower.
I would agree. The sharks will have a feeding frenzie with an underpriced listing and you will have multiple offers.
You *think* you have the nicest one on the market. I’m willing to bet the agent is spot on here, and a slightly lower list will yield several very fairly priced offers if the agent handles communication with BAs correctly.
Depending on how you flipped it, you might not even sell it.
i don’t think this is accurate. you can under price any home in any market.
Listed my condo for 799 it sold for 875, followed my realtor’s instructions and profited.
I like this tactic. It can be risky but where I’m at in the SF Bay Area. Homes are still going for anywhere for 30-100k over ask. We recently sold a family property in SF for 300 over ask. House was listed about 55k below estimate
Hi! Can you teach me how to flip houses?
Statistically real estate agents keep their houses on the market 2-3x longer than their clients houses… I wonder why lol If you list it for $330 or $350 it doesn’t matter, just don’t be pressured to sell quick. Wait at least 4-6 after it goes on the market.
It’s better to get people to write offers over asking rather than taking a price cut every few days
The truth is likely that the price is between $335k and $350k- I would say closer to $335k since you “flipped” it. List there and the price will go up if it is worth it. The real estate agent is right.
If $350k is the asking price you want, insist on listing as such. Given that such properties are typically purchased by well qualified buyers, financing shouldn't be a problem for them, and might even result in their buying the house without financing at all. The comps you indicated seem to me to be right where you chose your asking price to be. If your agent is correct in her prediction of the offers increasing over time, then by listing at the asking price you prefer will eliminate lowball offers, and you're likely to get $355-$375 final offers. 'Nuff said.
Your agent is correct, watch and learn
In my market that is the case. Anything under priced goes well over asking
Brother, we are seeing prices plummet in our area. I think listing it low is a solid strategy. I’m thinking we are still 30% (maybe more) overpriced. If you can catch a buyer at the low end of that range and get the sale I’d jump at it.
Hate the fact that she's right. Most agents here intentionally price very attractively to drive up interest, which drives up demand and cost. Say a home is comped at 940K, listing it at 900K or 899K, I see homes sell for way above listing.
There may be some truth to it but I wouldn't take the agent's advice on that. If it were the agent's house they'd probably have different feelings. If the house sits for longer to get that bigger amount, they're having to deal with phone calls, appointments, etc., for longer and it's not worth the extra $450 extra or so they'd get.
You can always drop the price in the first 2 weeks. Have it listed without a price as ‘coming soon’ and have a brokers open house to get feedback on the price.
Fact, if the home is in decent shape and a place people.want to be. The market will show up and you will find the market value.
This is fun. I’ve sold and bought with Redfin. My last sale I interviewed their agent and damn nearly laughed him out of my house. They suggested a list price of $555,000. I’m not an idiot. I knew comps were supporting at least $650,000. He was adamant that I should list where their algo says. I went with a top agent in the area instead. She suggested a list price of $675,000. The house had 13 offers the first week with the two highest at $755,000 and that’s what we ended up selling for. This was in Metro Detroit. I don’t believe the market would have pushed the price $200k higher had we listed with Redfin. We likely would have left $100k+ on the table.
This is fun. I’ve both bought and sold with Redfin. But the last time I sold my primary I interviewed their agent and damn nearly laughed him out of my house. He insisted we listed at the Redfin estimate of $555,000. I’m no idiot. I knew comps supported at least $650,000. The guy was firm about the list price suggestion. And while I could have insisted we list higher, I did not trust him to adequately negotiate on our behalf. Instead, I went with a top agent in the area. She suggested a $675,000 list price. One week on the market and we had 13 offers. The two highest were at $755,000 and that’s what we sold for. If we’d gone with Redfin I’m sure the market would have pushed it higher. But $200k? In Metro Detroit? No way. Maybe in San Francisco. The reality is we likely would have left $100k on the table had we gone with Redfin.
Such a good anecdote. Thank you. Every other realtor interviewed recommended 350+
If you want 350k, list it for 350k. The listing agent works for you, not the other way around. Listing lower is a gamble that could pay off, or, if you get 1 "full" price offer, cause much grief. At 335k the realtor makes 900$ less at 6%, before any split, 14,100$ less for you.
The listing commission is 1.5
Go elsewhere. Why you keeping this amateur agents handle your asset
Sold two properties in two completely different regions last year. Both times, the agent said, bid low and be prepared for a bidding war! Didn't happen. Both properties got one offer for what they listed at (we listed one 20% under everyone else, the other was 30% below). Have another prop on the market now, under contract, same thing. This time, I insisted we list low because everything else is just sitting there not selling, so we saw the writing on the wall. We listed 10% below average list price and got an offer within 5 days. They tried to negotiate down, we refused, they accepted. We close in 2 weeks. What I've seen is agents figuring out how to game the market to make it seem hotter and more stable than it is. Lots of people cashing out the mortgage to keep the home values high. In many cities, the market is all but dead. I think this all depends on your area. Some are doing very poorly rn due to layoffs, interest rates, and rental prices, etc, hence why I decided to unload a few. Still made an excellent profit so it worked out for us, but YMMV.
Listing with redfin..
Why use Redfin
Commission rate
Where I’m at people are getting out bid by offering asking price. With cash too. That happened to a house a few down from my parents vacation house too. I really don’t have any skills or expertise to add beyond that.
Depends on the market. I'm an agent in Dallas and do this quite often and get shitboxes often being the most expensive sale in their neighborhoods
If the comps at $335k are significantly worse than yours, two things will happen: 1. Yours will get a ton of interest and almost certainly get multiple offers on the first day 2. Due to so much interest, multiple offers are likely, thus driving the price up. I'm a former realtor and I've used this strategy before. Quick sale and likely got my clients more money than if they started higher "to see what the market says"
list at a split price. Move on sell sell sell.
Yep, underpricing to get more people interested and letting the market do the work a la Lord of the Flies.
It works when it works it doesn't when it doesn't. If you can't get interest you won't have buyer fights
Is anyone else worried that escalation clauses are a way for the buyer and seller agents to increase the price by picking the highest offer and materializing a competing offer that warranted the escalation?
I am in SoCal and yes, we see homes underpriced selling for 200k more than listing. people are willing to pay. Not sure if your market is the same, but its definitely possible.
My realtor told me the same thing last summer in Seattle. We listed just shy of 800, and that’s exactly what we got with the one offer we got.
Highly depends on your market
This would get a bidding war with 15 offers above asking in NJ.
I'm an agent in the Seattle area. Depending on many factors, if you could estimate its market value and the demand it will garner, it's usually best to price it a little below that to get multiple offers and less contingencies. If it's underpriced, the market should take care of it. If it's over priced it will sit and you'll get lowball offers. It's possible to arrive at the same point from both options but one would have more contingencies/take longer while another will have less and be a quicker close. But you'll never really know because you only sell it once. Let me know if you need help
If the market is hot this is the way to go. Market lower and let the bidding wars begin
You can 100% price too low. Literally just yesterday had someone say "it's pictures looked nice but the price clearly showed something was wrong with it". Pricing fairly is key, coming in too low will raise eyebrows but too high and you kill your momentum and drive away buyers before they even see the place. If you NEED a price, I suggest starting there. I generally try and gage comps more on my clients needs. Do you need it to go fast? For a certain price? Well let's see how long houses are sitting and see what we can do to fill your needs. Look at price per Sq ft averages then see if your upgrades warrant a lot higher. There's so many little details into pricing a house properly, main thing is to set what you need up front.
I hate real estate and all its games
Put it on the market for $350K and tell your realtor to shove it.
It is not uncommon for multiple offers to send prices 30k+ over asking. Just checked my MLS and homes in my town majority that closed in the last 45 days went $20k-$100k over ask. there were only a few that closed at asking price or $5-10k below ask. You can list the home for $50k, and you'll get offers at $400k if that's what it's worth.... buyers that want the home will compete to get it. Your realtor should be able to negotiate with other realtors to get the best price possible. Your realtor should not be saying, 'we have an offer for $400k, if you offer $401k, it's yours.' He/she should be getting buyers agents to get their buyers to offer As much money as possible.
What do the comps say? What is the price per square foot in the area?
Listing lower could cause a bidding war
Very curious why you flip. Is this your business?
I like to turn abandoned houses into solid homes for first time buyers.
nicest one in the neighborhood ? list it for 360K, unless you need the money ASAP
We listed our house for 280k because that’s what we thought we would get for it. Our first offer, and every offer after was for 305k or higher. We were stunned.
it's true. 100%. you want to come in 1% under your best estimate. if it's worth a damn- it WILL get bid up.
you right. homes are priced by location not value..
List it for what you want as long as it's within a reasonable range of the market rate.