Let's not get crazy and blinded by greed; I know the market's hot, but people are not stupid. A house is only worth what a buyer's willing to pay. Let’s talk about how to not price your home in this hot seller's market.
Believe it or not in a hot seller's market buyers will not just blindly pay whatever you put out there as the price, even though it seems like that right now. Things are so crazy in Los Angeles, houses are going upwards of $400,000, $500,000 over list. I can see how sellers can get the notion that maybe buyers are being unreasonable, but at the end of the day, buyers have a perceived value. The rule applies in this market just as the rule applied 10 years ago. A home is only worth whatever a buyer is willing to pay and with interest rates, being where they're at right now and where they're going; if a buyer can afford whatever that monthly payment is per month, and they like the house enough and they're willing to pay it, they're going to step up and pay whatever it takes, especially when there's competition.
The only way you're going to get them to step up and show up to write an offer is by pricing the home in a reasonable range. So, how do you achieve that? By looking at the retrospective data.
Since we're in a hot market, if you're a seller, I want you to look at the data from within the last 90 days, within the last three months, see how fast are home selling? How much are they going over list and where are they pricing their homes? Then I want you to take what that data is and go talk to your realtor, talk to your real estate professional and come up with a desirable price that buyers are going to go, “Hmm. You know what? They price that home based on those recent sales. That makes sense to me. I want to go see that house.”
You don't want to be the one who goes, “Yes, excellent. These neighbors are getting $500,000 over list. I'm going to list my home $500,000 more than it should be and just see what happens.” That is not going to work out for you, I promise you. Price your home based on the retrospective data over the last 90 days. Don't be too aggressive with it. When buyers smell greed, they're totally turned off and they will sit back, and they will wait. I don't care how hot the market is. I don't care how fancy your home is. I don't care if you have a double oven and marble countertops; if you overprice, people are not going to come and they're going to lowball you.
I know that if you're that person overprices, those lowball offers are going to drive you crazy. What’s going to end up happening is that you are then going take your home off the market and you're going to wait for prices to go up even more.
Listen in this market, you need to be strategic. You have to price your home accordingly. I'm beating a dead horse now, but hopefully you get the point. If you want to know what your home is worth in this market, and you live in the Los Angeles area, you know what to do?
If you have any questions let’s talk.
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