The Puzzle (To Buyers) Of A Low List Price


The Puzzle (To Buyers) Of A Low List Price
By Scott Rogers • November 18, 2009
It can be difficult to price property as a seller, but another interesting puzzle is how a buyer should respond to a low (super-low) asking price. There are several scenarios where a list price might be quite a bit lower than expected: the property is owned by a bank, as a result of foreclosure, and they want to sell the property quickly the property's owner is in a desperate situation such that they need to sell quickly, and they're willing to sell well below comparable properties even at a loss the property's owner bought many years ago, and thus can sell it well below comparable properties, and can still make a profit So, given a property priced well below where it should or could be priced, what is a buyer to do? There have been several such situations lately, and oftentimes the ultimate sales price is above (or well above) the asking price. The problem, of course, is that buyers are making a decision about an asking price in a vacuum! They don't know if there will be multiple offers, if any of the offers will be as high as asking price, if they will be above asking price, etc. The best solution, in my mind, is to use a relic from the recent past --- the escalation clause. This allows a buyer to make a bid that they hope will win the day, but also to provide an automatic method for increasing that offer should another outbid them. More specifically, if a house is listed at $125k that we think should sell at $225k, a serious buyer might want to: make an initial offer of $150k that they hope will be the winning bid automatically increase that offer by $1k increments up to $185k to try to outbid any other offers that are made While I find that the above can be the most effective method or negotiating such a situation, I also find that many buyers are not willing to go very high ($185k, as per above) to buy the property. My question, in that situation, is this --- if the above referenced property were not one with a low list price, but instead were listed at $229k, would you not be highly interested if you knew you could negotiate it down to only $185k? The issue at hand, I believe, is that it is hard to be comfortable with exceeding the asking price of a property in a buyer's market. Receive Updates by Email Recent Articles: Is There A Price You WOULD Pay For This House? There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 22, 2024 (unless otherwise noted).
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