SAN FRANCISCO CHRONICLE Q+A
The San Francisco Chronicle asks expert area realtors questions every week for their Sound-Off segment found in its Sunday Real Estate Section. The online counter part appears on SF Gate. We've been asked to contribute and do so fairly often, which is what you're seeing here.
Q: How do you go about setting a list price? Does pricing below market rate always cause a bidding war, or can that backfire?”
A: Like it or not, the convention in the City is for agents to list a property for sale with a lower-than-expected list price on purpose. We tell our clients that a list price is as important for what it says directly and what it implies. Determining a property’s value to our clients is our job and that number will depend on each client’s goals.
Some agents take the premise that 3/4ths of San Francisco properties sell for over list and underprice so radically, that they might as well offer the property for sale for $1. This will lead to mobbed open houses, scores of disclosure packages being sent out, and offers by the dozen. Yes, this style can work, but carries the risk that a winning buyer gets cold feet and walks away when the euphoria of ‘winning’ the property wears off. Runners-up might be so off-put by the process that they pass if given a chance to buy if the winners walk. Worse yet, this auction-house style runs the real risk of putting off solid and qualified buyers who don’t write an offer out of fear of being gamed.
We think a more measured property-specific pricing approach is better in most cases. To maximize our seller results, we work with our sellers to make their properties shine so that we elicit emotional and visceral responses from buyers so they fall in love with a property. This is a more involved approach but leads to buyers who are not only far more committed to a property but willing to pay more for it.
The online version of this was published on October 14, 2019 while the print version was published on Sunday, October 13, 2019. Find the online version here.
What Percentage of Homes Sell for Over List?
Take a look at live data from the MLS and see:
For More Sound-Off Snippets...
Conflicting news reports about the real estate ‘market’ are concerning because they gloss over the fact that the housing market is very nuanced as each property is unique. Folks can lose sight that buying a home not only serves the very basic purpose of shelter but is also the main way folks can build wealth.