How will you know if the price is right?
How would you like to be a real estate broker in this market? If you represent buyers, the record low inventory and escalation clauses can make your life miserable. If you represent one of those rare sellers, you are fortunate indeed.
The rise in Seattle home prices doesn’t make pricing any easier. However, pricing is more critical than ever. When there are 10o homes for sale in a community it’s not that obvious that ten are overpriced. When there are only ten homes for sale, the one that is overpriced is easy to spot. Buyers are eager to buy but they are not stupid.
In a sellers’ market, the right listing price is the one that attracts buyers who are willing to pay more than the listing price. How do I know what the right listing price is? With few or no comparable homes for sale and few homes sold in the recent past, pricing is a delicate task. Obvious underpricing to incite bidding wars is a risky strategy. Buyers may take you by your word.
Automatic valuation models are of little help.
I’ve just listed a home in Edmonds for $550,000. The valuations are all over the place, ranging from a high of $665,444 to a low of $511,868. The highest estimate is Zillow’s, the lowest by CoreLogic who also gave a broad estimated range from $450,444 to $573,292. Why the great disparity of estimated values? First, none of these companies have ever set foot in the home. The only one that theoretically could is Redfin because they are a licensed brokerage that buys and sells homes. Second, the public records for this Edmonds home show that the home sold last in 2012 for a mere $260,000. This makes the two highest valuations even more unusual.
A closer examination of the public records reveals that the home was sold in 2012 as a part of a bankruptcy. I know all about that because I helped the current owner purchase the home. It took several months to come to an agreement with the trustee and the lender. In the end, it was worth the wait.
Now, six years later, I’m looking forward to making my client happy a second time around.
Priced at $550,000, the home has been on the market for 25 days. There was a full-price offer but after the inspection, the buyer decided not to move forward. The buyer chose not to share the results of the inspection report.
What the drone saw: watch this brief flight across the Edmonds neighborhood.
First published by Gerhard as his
April 2018 View from the Street Newsletter.