Andi Grant's Blog - Everyday Real Estate with a Twist

Sellers Stop Camouflaging Your Great Home by Wearing an Overpriced Listing! 

I wrote a blog last week about unrealistic expectations when it came to competitively pricing a home on factors other than comparables (comps) of recently sold homes and nearby active homes for sale of similar size and feature.  The blog fetched over 100 comments but one in particular stood out to me.  The commenter mentioned that a $40,000 difference may not have mattered if the home was in the higher price range of $700K.  This could very well be the case in some markets, but in the LA market, I tend to disagree and here's why.

When searching for a home in Los Angeles, Long Beach or nearby cities, buyers will narrow their search to a neighborhood in which a $40,000 price difference would in most cases push the potential homebuyer into a BETTER neighborhood when considering the price of an overpriced listing. Also, the buyer demographic for the higher price range could change as well.  Agents using the MLS and buyers performing online home searches are shopping in price blocks within a certain price range. 

$40,000 OVERPRICED LISTING SCENARIO:

A home seller has a home that is priced at $720K in an area that shows most comps of recently sold homes or those currently up for sale (containing similar square footage and in similar condition) priced closer to the $680K price which is a $40,000 price difference.

Agents and pre-approved homebuyers looking in that area would most likely be performing home searches where their price criteria is up to $700K.  The scenario seller is potentially missing the bulk of buyer traffic from those who are actually qualified to buy in his area.  Also, his home is most likely not on the agent's printout of homes to view. 

The agents and their homebuyers that are approved in the $720K range will come across the over-priced listing among their results and will notice right off the bat that the area and quality of home is not the same as most of the other homes on their list.  The over-priced $720K seller is now competing with homes and a neighborhood that can justify the additional $40K in price increase.  Unfortunately, the overpriced home is more likely to be scoffed at and/or disregarded rather than considered no matter how fantastic it looks.   

Today's buyer isn't the same as the pre-housing bubble buyer that was simply looking to jump into the homebuying frenzy at any cost.  Today's buyers are watching family and friends lose their homes all around them, but are still hopeful of being homeowners. They are much more cautious, much more saavy and are making each and every one of their homebuying dollars count when it comes to the biggest financial investment of their lives.

Sellers, homebuyers are not the enemy.  Do not camouflage your home in an overpriced listing.  You need the homebuyers to clearly notice and see your home among the many. Pre-approved home buyers that are looking in your area want to see your great home!  Price it logically and competively according to recent nearby solds and nearby actives that are of a similar size and condition.  Price it correctly and you can win the war on this market with a proven strategy that works!

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This work is licensed under a Creative Commons Attribution-NoDerivs 2.0 Generic License. Camouflaged home photo courtesy of Natalie Maynor for Creative Commons.  Army man in fatigues holding rope courtesy of notinponce for Creative Commons.  Fatigue dress by falsedan. Sold sign by istock.  Photos not to be copied or used without purchase or expressed written permission.