I can’t remember a listing where my client didn’t ask me, “[H]ow many offers will I get on my house? It’s a crystal ball question, but usually the answer is – “we will probably get several if we price it correctly.”
The juggernaut seller’s market continues to march forward like a rapid moving lava flow covering the entire landscape in its path. Needless to say this market condition is confounding to buyers looking to get a piece of Silicon Valley real estate and claim their stake for their families. Low inventory combined with the high-tech industry seemingly on fire continues to keep prices moving higher and higher. There are many qualified buyers in every price range and it is difficult to be successful when there is such great competition.
I always collaborate with the seller, but I don’t set the list price so low that it seems ridiculous nor do I set the price at the top of the market which will sometimes prevent buyers from stepping up.
As stated above if we all had crystal balls we could do a better job predicting what the optimal listing price would be for a home. Many factors come into play when strategizing the list price; location, size of the house, condition of the house, and recent neighborhood comparable sales are some of the main factors. Other factors include what recent upgrades have been made to the house, is the house completely remodeled or is it dated, is the house going to be staged, are there any major obstacles with the location like a busy street or other undesirable geographic challenges. (For tips on how to get the most value from home improvements, read our blog here about it!)
Once we have evaluated all of the factors we can set the list price at a point where the market demand is currently located to entice the greatest possible buyer participation.
If the home is listed too low the buyers will bring up the price in their offers – usually with many offers. If the list price is too high then the amount of offers will be limited, maybe even no offers will be forthcoming. Thus it is imperative to price the property at a price where maximum demand will be realized.
Price is not always the most important factor when making an offer on a listing. What is equally important is that the buyer’s agent has written a clean offer, has asked all of the important questions they need to ask, has downloaded and acknowledged all of the disclosures online, and has made a wonderful presentation about their clients and their client’s offer.
For example, if the seller needs a couple months rent back will the buyer’s agent be willing to do that. Will the buyer’s agent make the offer on a PRDS contract instead of a CAR contract? Will the buyer’s agent ask the listing agent for all the important details of the seller’s needs? These are all critical factors that buyer’s agents need to be aware of. If a buyer’s agent doesn’t do these things leading up to an offer than the likelihood of having that offer accepted is relatively low. Moreover, if a buyer’s agent merely faxes or emails an offer in their chances are extremely low of getting accepted and those buyers should be looking for a new agent.
What Tips The Scale In Favor Of One Buyer Over Another – All Cash Offers Are Not Always The Best Offers
As I stated above, price is not always the final factor. There have been many occasions where two buyers offered the same price, but one buyer had an all-cash offer with an inspection contingency and the other buyer had a loan with no contingencies. Every time we would accept the non-contingent offer with the loan over the all-cash offer – it is just a better offer as the seller has basically zero risk of the transaction failing.
No matter what you do with respect to selling your home please make sure you have hired a competent Realtor to help you through this process. Even after 625 completed transactions I still see unusual fact patterns, unforeseen issues, and anomalies in every deal – it is just part of the business. Because of that you do not want an inexperienced person handling such an important transaction for you.