Comments on: Sunday Night Stats

By: ARDELL

ARDELL — Wed, 23 Jan 2008 05:44:59 +0000

It depends on price tier positioning. If it takes you to $499,999 it’s not too high, if it takes you to $505,000 it’s too high. You have to watch your price tiers and many other factors, like your competition on market. Why the seller is selling and the seller’s financial situation also comes into play, of course. Vacant properties have carrying costs. If people live there, the pressure is often not as great. If they don’t know where the will go when it sells, that’s different than if they have a property in escrow contingent on the sale of their house. Many factors, but whether or not the comps included closing costs is not usually one of the factors. If all the comps had closing costs included, yours likely will too. If none of them had closing costs, yours likely won’t either. That’s normally the assumption made.

By: Alan

Alan — Wed, 23 Jan 2008 05:28:01 +0000

But isn’t pricing 5% above a comp that included closing costs really pricing too high?

By: ARDELL

ARDELL — Wed, 23 Jan 2008 02:52:09 +0000

Alan,

Depends if I am the buyer’s agent or the seller’s agent. If I’m the buyer’s agent I do, if I’m the seller’s agent I don’t. If there is more than one offer, it doesn’t matter.

By: Alan

Alan — Tue, 22 Jan 2008 19:31:27 +0000

Ardell,

How do you account for the chance that closing costs may have been included in the comp sales price?

By: ARDELL

ARDELL — Tue, 22 Jan 2008 07:04:51 +0000

Alan,

You don’t have to be first, but you have to make the cut. When a buyer goes out to see all of the homes, you have to be in the top three to be sold before more come on market. Often I try something more as to conditon before resorting to price. I guess we can say it would have sold for less had that not been done. No one really knows though. We do the best we can to do the best for our clients.

The harder decision comes when nothing is selling. If others keep selling and not your house, then you take action. When no one is buying anything…you wait. Today there are many more buyers, than people actually buying anything. It will be an interesting year and agents will clearly earn their money once again.

By: ARDELL

ARDELL — Tue, 22 Jan 2008 06:58:23 +0000

ABR.

Well if I can make you less bitter, at least I can find something of interest to you

By: Alan

Alan — Tue, 22 Jan 2008 06:06:03 +0000

Ardell,

What if comparable houses were on the market for less than the last sale but they weren’t selling? Where would you price a new listing in that scenario?

By: Affluent bitter renter

Affluent bitter renter — Tue, 22 Jan 2008 05:23:02 +0000

“But something tells me if I say Everyone Undercut the Prices by 20%, you’d be the first one leading the Hooray Parade.”

No – it is a bad idea for people involved in buying or selling a product to collude to set prices in either direction.

Interesting description of current real estate practices.

By: ARDELL

ARDELL — Tue, 22 Jan 2008 05:14:37 +0000

Well, the head of the NAR can’t do that since agents may be representing either buyers or sellers. But clearly all agents who represent sellers are focusing on getting the highest price for their seller client and often ask other agents for feedback with regard to price.

Agents often get together to determine price of home. What they can’t do is get together to determine price of services.

But something tells me if I say Everyone Undercut the Prices by 20%, you’d be the first one leading the Hooray Parade.

Many agents hand out sheets asking agents from all of the offices in town to put down their opinion of value on a home. We get emails everyday saying “what did you think of the price of this home”. So I’m pretty sure it’s only cost of service that cannot be discussed from office to office.

By: Affluent bitter renter

Affluent bitter renter — Tue, 22 Jan 2008 05:02:21 +0000

“It is not against any law to keep housing prices up and collude to that purpose.”

I wouldn’t be too sure about that – if the head of the NAR stated that RE agents should price at 5% above the comps, and suggested that any RE agent undercutting that standard was motivated by greed, and was “jumping ahead of the pack to sell quickly at the expense of the seller’s net proceeds”, I think that the Department Of Justice would take immediate, intense interest.