Have you noticed that quite a few homes are getting price reductions after they have been on the market a couple of weeks?
Until recently, it didn’t seem to matter where you priced your Bay Area home for sale. Everything was selling in a matter of days, often with multiple offers and every home that was listed for sale sold well above the price of the most similar home that sold recently.
This doesn’t mean that prices are falling though. They just aren’t increasing at the rate they did. These increases were clearly unsustainable. It means that sellers need to carefully consider the recent sales of similar homes – the “comps” in agent speak – and price accordingly. If your home is not as upgraded as the last one of that model that sold a few weeks ago, your home needs to be priced below the sale price of that home.
And if your home is more upgraded than than that last sale, you should really price it no higher than that the amount that home sold for. It may seem a little counter-intuitive, but it’s always the buyers that will dictate the sale price, not the seller. Which is why many homes sold recently for far more than than the seller ever anticipated.
How do you know if you have priced it right? If you are getting very few showings in the first few days it goes on the market, you can be fairly sure you have it priced too high. If you get lots of showings, it should sell quickly and for the right price.
So if you are planning to sell your home soon, assuming you have an agent that understands how the market is changing, follow their advice when it comes to deciding on a list price and be guided by the comps. There will still be cases where some homes will sell for $100,000 or more above list price, but these will be the exception. Price your home where it should be and you should sell quickly. Price it too high and you may well have to reduce it, and possibly even accept an offer below the reduced price.