Pricing your Los Angeles home to sell is as much art as science.
In May of this year, Harb & Co. listed 5821 Buena Vista Terrace for $650,000. More than twenty offers were written, and this Highland Park home sold for $837,000, nearly 30% over the asking price. We held three open houses and ran a strong marketing plan. We closed escrow on June 21st. Our stats: 2+2, 1,048 square feet on a 7,098 square foot lot with a one-car garage. This home was a sweet rustic cottage with few updates.
The neighboring home at 6045 Buena Vista Terrace was listed in July for $879,000. Their stats: 2 + 2, 1,040 square feet on a 7,100-square-foot lot with a two-car garage. This home had an updated kitchen and baths, central air and heat. (Our listing had a wall furnace and wall a/c).
I understand that when pricing this Highland Park home, they assumed it would sell for more than my listing. But the first problem was pricing over the $850,000 price point. Since most buyers search for homes online, “round numbers” show up in their searches. Most buyers have a specific price range. For example, buyers may be looking for a 3-bedroom home priced up to $850,000. When their search criteria cut off at $850,000 and their dream home came on the market priced at $879,000, they may not have seen the listing.
After 17 days on the market, the neighbor reduced the price to $859,000. However, the seller still missed the critical $850,000 price point. Thirteen days later, the seller dropped the price again to $829,000. By then, my $837,000 sale had already set the benchmark.
Meanwhile, the home had spent a full month on the market. Most homes in the neighborhood were selling within two weeks or less. After 50 days, the seller reduced the price to $798,000. Ultimately, the home sold for $762,500. That final sale price came in more than $100,000 below the original asking price.
In today’s heated seller’s market, it’s difficult for a Realtor to predict at which price your Los Angeles home will sell. There are so many unknowns that come into play. A popular real estate pricing strategy is to slightly underprice a home in order to obtain multiple offers and a bidding war. Pricing your Los Angeles home just below market value typically results in the home selling at a higher price than if originally priced at fair market value. In today’s market, buyers are more confident about their home purchase when someone else desires the same home. Pricing your property on the lower end of the value range stimulates interest among buyers and creates a herd mentality. Herd mentality, describes how people are influenced by their peers to adopt certain behaviors, follow trends, and/or purchase items.
Related Post: Determining your home’s value
Different listing price recommendations
