List house higher or lower than value?

Question

I'm helping to sell my grandmother's house, and one real estate agent I interviewed said she thinks we should list it at the highest price possible (1.45M), and that we could always bring it down. Another agent said she thinks we should list it low (1.1/1.2M) to build demand and have them out bid each other. I personally don't think it's a 1.4M house and worried we'll need to do a price cut, decreasing it's value. The house is desirable 3Bd/3Bth Laguna Niguel neighborhood, excellent schools, valley view, in good shape but not updated. Thank you in advance for your thoughts!

Caroline Gerardo · Answer

The market is no longer 30 people bidding on a house. I live in Links Point (LN) Suggestions: clean and scrub everything, paint neutral cream color, donate to the Goodwill truck down by the Ziggurat building they are open daylight hours or have AMVets pick up curbside. Have a garage sale one day and sell all the things the family does not want. If you give me the address in DM I can tell you what the comps are.

Steven Foster Wilson · Answer

One thing I've learned is that you should trust the experts. Trust your real estate agent, let them work their magic.

Hans C Hormann · Answer

I agree with Charlie, I have been a realtor since 2003 and when the market in 06 was almost at the top I had a client try to get me to list his house higher than what the market was... Long story short I referred him to another agent and it sat for 6 months and sold at the same price I suggested. Also with the way things are currently going, you risk staying on the market too long at a higher price and the market changing drastically. You want to be just under the market so that people look and offer on your house as opposed to the competitions listings. Much like fishing if you have action it draws more fish.

Charlie MacPherson · Answer

Former Realtor here.  Conventional wisdom, borne out by experience, says that if you list it too high, you'll sit on the market too long.  Then you'll start a series of price cuts that results in selling at a lower price than if you had listed it at the right price (actual market value) in the first place.

A gutsy / risky alternative is to list well below market value to gin up a bidding war.  The risk is that you'll only get offers at or near the artificially low list price.

I can tell you that when I sold my last two houses, I listed at what I thought the market value was and sold both very close to that number.  That's what I'd do again today if I were to sell my current home.

Robert Reynolds · Answer

Hello @Jacquelyn Umof,

I’d recommend competitively listing your house, not at the highest price possible. You are going to miss out on a large buying pool that maybe could afford 1.45 mill, but have their alerts set at 1.4 million. I’d also recommend not listing it too low, you don’t want 100 offers, you want 5-10 solid offers that you can then have compete against each other. It’s not always about getting the highest price, but most solid buyer, that will close and can close.

Lexey Vezzoso · Answer

Hi Jacquelyn,

Typically as an agent I am more on the conservative side when it comes to listing my properties. It doesn't always look so great when you have to price reduce a home because it's over priced and is not selling. When you use the lower list price you get more eyes on the property which in turn can help bring in more offers! You are probably better off listing your grandmothers home in the 1.1 range.

I hope this helps!

Lexey Neitzel

Joe Homs · Answer

@Jacquelyn Umof I always list all my flips below the market to get that interest and showings as high as possible.  I then let the market take the price higher.

Good Investing...

Leo Quinones · Answer

Hi Jacquelyn,

That's a very valid concern! A home gets the most amount of attention in the first 2 weeks and if you are not priced right(too high) you will end up chasing the market with price drop after price drop and may ultimately sell for less than if you had priced it attractively in the first place.

Buyers are starting to be a little more pickier these days (and with good reason). Due to the home price inflation and rising interest rates, buyer's need to feel as if they are getting somewhat of a deal. So, that being said, besides price -- also look to see what other things could be done to the home to increase the marketability of the home such as:

• exterior painting, gardening, and pressure washing to up the curb appeal• Deep cleaning/decluttering• Minor repairs or updatesEvery home/situation is different. Some may really benefit from these items, but other times there isn't any use if the target buyers are going to completely renovate the home anyways. As far as price goes, if you find an agent that is in tune with the market, they will be able to gauge what the market activity will be and price accordingly. But I suggest to price it at fair market value, the market (buyers) ultimately decide what the home is worth and how high it will go.

Let me know if you need any referrals for any of those services or if you have any follow up questions!

List house higher or lower than value?

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