For a while I've noticed that many investors avoid listed properties, even if the deal is way below the threshold of what the investor usually buys. And top it all off, the price is much higher than the listed price.

What is the reasoning behind that?

I don't know too many investors who won't buy a listed property if they can get it for a price that makes sense.  That said, most listed properties don't sell for prices that make sense to an investor, simply because the public exposure creates competition and the fact that most listed properties are also being looked at by retail buyers, increasing competition even more.

Originally posted by @Mujahidul Huq :

For a while I've noticed that many investors avoid listed properties, even if the deal is way below the threshold of what the investor usually buys. And top it all off, the price is much higher than the listed price.

What is the reasoning behind that?

If I understand you are describing a situation where the price of a listed property is both much higher than list but way below investor buying level?

That would be unusual in most places but you California people do like to play games with your list prices to create bidding wars. Sometimes you treat RE listings like Ebay auctions. Start the list price super low like a minimum bid to encourage interest and watch the price climb. If that was the case, being much higher than list would not necessarily a good indicator of value in your state. However, some investors have a "bargain" mentality so paying way "over list" is simply not something they will consider....it goes against a core belief, even if it still appears to be a good deal on the surface.  I am probably one of those investors. I would not be winning many bidding wars.

Originally posted by @J Scott :

I don't know too many investors who won't buy a listed property if they can get it for a price that makes sense.  That said, most listed properties don't sell for prices that make sense to an investor, simply because the public exposure creates competition and the fact that most listed properties are also being looked at by retail buyers, increasing competition even more.

That makes sense. Guess many don't realize that even non-listed properties have competition. 

Originally posted by @Eric M. :

Originally posted by @Mujahidul Huq:

For a while I've noticed that many investors avoid listed properties, even if the deal is way below the threshold of what the investor usually buys. And top it all off, the price is much higher than the listed price.

What is the reasoning behind that?

If I understand you are describing a situation where the price of a listed property is both much higher than list but way below investor buying level?

That would be unusual in most places but you California people do like to play games with your list prices to create bidding wars. Sometimes you treat RE listings like Ebay auctions. Start the list price super low like a minimum bid to encourage interest and watch the price climb. If that was the case, being much higher than list would not necessarily a good indicator of value in your state. However, some investors have a "bargain" mentality so paying way "over list" is simply not something they will consider....it goes against a core belief, even if it still appears to be a good deal on the surface.  I am probably one of those investors. I would not be winning many bidding wars.

Yes and no. The listed price is fair for market value, but due to fash closing the seller is willing to selttle for less, which is investor's threshold.