Tricks to Generate More Offers On Homes
Sellers turn to above- and below-market prices on real estate. What's a buyer to do?
Buyers in today’s hot real estate market are dealing with seller strategies that may sometimes seem puzzling and frustrating.
For example, some sellers choose asking prices on the homes they are selling that are far below the market values, thereby hoping to draw in more bidders who will push the price up. Other sellers, likely those less motivated to part with their properties, may set the asking price high in anticipation of finding a buyer who will see the value in a house and bid at, or close to, the asking price.
Oakland Realtor Victor Fierro cited a pair of houses the came on the market this summer that exemplify these two approaches. One three-bedroom, two-bath house in Oakland’s Dimond District was listed at $499,000, received 16 offers, and sold almost immediately for $725,000. Another house, also a three-bedroom, two-bath property near Lake Merritt, went on the market at $645,000 at about the same time, had one price reduction to $580,000, and is still for sale after more than two months.
The owners of the first house, with the $226,000 difference between the sale price and asking price, certainly benefited from making it seem like such a bargain, but they may have received just as much pricing it closer to the market, Fierro said. “[The strategy] can also waste the buyers’ and agents’ time,” he said.
Dan Pines of Berkeley Realty in Berkeley offered a solution, saying he tells his clients to wait and find out how many offers have been made on a house before deciding if they want to spend time on an offer. “If there are a lot of bidders, you may have to offer a lot more if you want to compete,” Pines said.
Of the second house, Fierro said that even in a hot market, it is usually better for sellers to “go for comps,” meaning research similar houses that have sold in the area and price accordingly, rather than “shoot for the moon.”
“If the seller has high expectations, you can counteroffer below asking, but 10 percent below is considered real low,” he said.
“Sellers who are motivated will reduce the price [if they don’t get offers],” Pines said. “Those who aren’t may rent the houses out, or not sell them at all.”