JULIE GARDNER
  • HOME
  • COMPASS
    • WHY COMPASS?
    • COMPASS CONCIERGE
    • COMPASS BRIDGE LOANS
  • LISTINGS
  • ABOUT
    • ABOUT JULIE
    • A DYNAMIC PARTNERSHIP
    • CONTACT
    • PROCESS
    • TESTIMONIALS
    • PRESS
  • PROJECTS
    • BEFORE & AFTER
    • GARDENS
    • OUR TEAM
    • VIDEOS
  • BLOG
  • COMMUNITY
    • UTILITIES
    • SCHOOLS

The Price is Right?

8/6/2021

0 Comments

 
Jill, Sarah and I will take a breather from Opens this weekend as nearly all of our properties are currently in escrow. That's no small feat, given our recent volume, and one that couldn't come at a better time as Sarah heads to her daughter's graduation in LA for the weekend, and Jill is off to cheer-y-o London to visit her daughter for 10 days, leaving me to sip tea alone.

However, just because we're heading towards the finish line on several properties, it doesn't mean I'll be getting much rest while they're away (turnabout is fair play).
We've also got half a dozen NEW listings coming in the next few weeks/months, and they are all in varying stages of preparation, from clean-out to staging, and everything in between!

While every phase in the chain presents its own set of challenges, perhaps the toughest component of them all is pricing. With the clear understanding that Realtors are NOT setting the value of a property, but creating a marketing strategy designed to bring the highest and best results, correctly pricing a home can be nearly impossible as we navigate the escalating marketplace - not to mention Sellers' GROWING expectations. (Value IS a moving target.)

"We know you can't say for sure, but what's our property worth?" Sellers ask with HUGE dollar signs in their eyes.

We know what they want to hear. We know an inflated response is likely to get us the listing. We know that they've watched their neighbor's house trade high in a bidding war, and we know they've been listening to the hype of their well-meaning but uninformed friends, BUT the truth is we don't know your home's particular value until we bring it to market and see how the market responds.

Here's the thing: NO ONE ELSE DOES EITHER!

Sure, we can analyze "nearby "like-kind" sales to create a comprehensive sense of "value," but in the end, the "market" value of a property is ultimately determined by timing, condition, and demand. Let me repeat that because it's important to understand: the market value of ANY property is determined by timing, condition, and demand - NOT what you paid for it; NOT what you want: NOT what you need: and NOT what you must have. . . (Regrettably, Buyers don't care about any of those requirements.)

Sometimes we set a price only to discover that there are significant hidden issues with the property, and then the listing has to be adjusted accordingly to accommodate those unexpected findings. Unless the Sellers "cure" the house before bringing it to market, there's likely to be a discount for deferred maintenance and unwelcome discovery. In other words, there's no side-stepping a failed foundation or tens of thousands of dollars of dry rot beneath the stucco or around numerous windows. Unfortunately, it is what it is.

"That can't be; we took great care of the house."

I'm sure you did, but when is the last time you had a structural, pest or foundation inspection? Like aging people (it's if not one thing, it's your mother) older homes can present defects that homeowners are blindly unaware exist. It's the reason we recommend inspecting properties prior to bringing them to market - ultimately it's to protect the Seller as any negative discovery during the escrow period can be fatal.

Conversely, a property we thought might fetch X, gets entirely transformed during the preparation period, and suddenly it's value skyrockets to Y or better yet, Z. Congratulations! You got the "gift." (That's a far more pleasant surprise, but not one we can count on.) Your job is to now recognize it as such, and pop the champagne; it's time to celebrate.

Adding to the mystery around "value," is the rampant practice many Realtors have adopted of setting a list price so far below the anticipated outcome that it makes it hard for both Buyers and their Agents to figure out the bullseye. (Between you and me, I don't love this game, but it's hard to argue with the results.)

"Why is this house being listed for less than they paid for it two years ago?" Buyers ask.

To be blunt, it's bait.

Disingenuous or not, much of today's pricing strategy is good old-fashioned slight of hand. If a house is priced well under value and then it sells for much more, that makes economic sense, but it also gives the Agent a platform to tout FANTASTIC statistics that don't represent anything more than the simple fact that the house was WAAY underpriced to begin with. Consequently, the market carried it UP (as markets will).

So don't lose sight of the game, the outliers, the one-offs, the rumors, the reality, or the market forces at play. Irrespective of these conditions, savvy Buyers tend to find the sweet spot with respect to "value" in a free-market economy such as ours. Whether the outcome meets a Seller's expectations often has more to do with whether those expectations were realistic to begin with.

In the end, I suspect the price IS right if it achieves the desired goal. (So what's behind door #2?)

The task at hand is to keep our eye on the target and to recognize that the list price bears little resemblance to the final sales price. (It is what it is.) With facts in hand, take aim and shoot!

How can we help you?
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Subscribe

    Author

    Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate. 

    Picture

    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010
    January 2010
    December 2009
    November 2009
    October 2009
    September 2009
    August 2009
    July 2009
    June 2009
    May 2009
    April 2009
    March 2009
    February 2009
    January 2009
    December 2008
    November 2008
    October 2008
    September 2008
    August 2008
    July 2008
    June 2008
    May 2008
    April 2008
    March 2008

    Categories

    All
    Business
    Design
    Drought
    Holiday
    Home Maintenance
    Homes For Sale
    Life
    Market
    Politics
    Renovation

    RSS Feed

    View my profile on LinkedIn
Piedmont · Oakland · Berkeley
 510.326.0840
julie@juliegardner.com
DRE# 01431765
​COMPASS

  • HOME
  • COMPASS
    • WHY COMPASS?
    • COMPASS CONCIERGE
    • COMPASS BRIDGE LOANS
  • LISTINGS
  • ABOUT
    • ABOUT JULIE
    • A DYNAMIC PARTNERSHIP
    • CONTACT
    • PROCESS
    • TESTIMONIALS
    • PRESS
  • PROJECTS
    • BEFORE & AFTER
    • GARDENS
    • OUR TEAM
    • VIDEOS
  • BLOG
  • COMMUNITY
    • UTILITIES
    • SCHOOLS