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Why You Should Think About Listing Prices Like an Auction’s Reserve Price

Wednesday, March 24, 2021

by Christie Cannon

Why You Should Think About Listing Prices Like an Auction’s Reserve Price

For generations, the homebuying process never really changed. The seller would try to estimate the market value of the home and tack on a little extra to give themselves some negotiating room. That figure would become the listing price of the house. Buyers would then try to determine how much less than the full price they could offer and still get the home. The asking price was generally the ceiling of the negotiation. The actual sales price would almost always be somewhat lower than the list price. It was unthinkable to pay more than what the seller was asking.

Today is different.

The record-low supply of homes for sale coupled with very strong buyer demand is leading to a rise in bidding wars on many homes. Because of this, homes today often sell for more than the list price. In some cases, they sell for a lot more.

According to the Home Buyers and Sellers Generational Trends report just released by the National Association of Realtors (NAR), 45% of buyers paid full price or more.

You may need to change the way you look at the asking price of a home.

In this market, you likely can’t shop for a home with the old-school mentality of refusing to pay full price or more for a house.

Because of the shortage of inventory of houses for sale, many homes are actually being offered in an auction-like atmosphere in which the highest bidder wins the home. In an actual auction, the seller of an item agrees to take the highest bid, and many sellers set a reserve price on the item they’re selling. A reserve price is the minimum amount a seller will accept as the winning bid.

When navigating a competitive housing market, think of the list price of the house as the reserve price at an auction. It’s the minimum the seller will accept in many cases. Today, the asking price is often becoming the floor of the negotiation rather than the ceiling. Therefore, if you really love a home, know that it may ultimately sell for more than the sellers are asking. So, as you’re navigating the homebuying process, make sure you know your budget, know what you can afford, and work with a trusted advisor who can help you make all the right moves as you buy a home.

Bottom Line

Someone who’s more familiar with the housing market of the past than that of today may think offering more for a home than the listing price is foolish. However, frequent and competitive bidding wars are creating an auction-like atmosphere in many real estate transactions. Let’s connect so you have the best advice on how to make a competitive offer on a home in our local market.

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Housing expert on price increases: 'I don’t see that slowing down anytime soon'

Thursday, February 4, 2021

by Christie Cannon

Even though home values experienced their largest increase since 2014, the price hikes may not be over yet.

“I expect there to be another year of rising home prices,” said Jeff Taylor, managing partner at Digital Risk, a mortgage data and analytics firm. “I think the median home price will get to about $360,000.”

Standard & Poor’s reported last month that its S&P CoreLogic Case-Shiller national home price index posted a 9.5% year-over-year gain in November, up from 8.4% in October. The last time the index reached that level was in February 2014.

“I don’t see that slowing down anytime soon,” Taylor said.

2021 is poised to be another big year for housing, following the record number of existing home sales last year and 811,000 new home sales, Taylor said. Supply chain constraints from the pandemic still remain, making it harder for builders to keep up with demand.

Taylor also expects to see a surge of buyer demand as the threat from the coronavirus wanes.

“A lot of people — believe it or not — are waiting for full covid vaccination to put their homes on the market and potentially look for other places,” he said.

He also expects Gen Z, many of which moved back in with their parents during the pandemic, to return to the big cities in the second half of the year, lured in by rental prices discounted by as much as 30%.

“You’ll start to see that stabilize a little more in the second half of 2021,” he said.

A sale sign sits in front of a home in the Shaker Heights section of Cleveland, Ohio, 25 January 2008. The area is filled with homes for sale or on the auction block. The city of Cleveland is the epicenter of the nation's home foreclosure crisis and is creating bad news for nearby homeowners and cities across the country because they lead to falling property values and increased crime. AFP PHOTO/Timothy A. CLARY (Photo by Timothy A. CLARY / AFP) (Photo by TIMOTHY A. CLARY/AFP via Getty Images) — A sale sign sits in front of a home in the Shaker Heights section of Cleveland, Ohio, 25 January 2008. (Photo by TIMOTHY A. CLARY/AFP via Getty Images)

While many predicted that the pandemic would be the end of big cities as people rushed to the suburbs, “we still haven’t seen that mass exodus that we thought was going to happen,” Taylor said.

The National Association of Realtor reported that 8.9 million Americans had relocated to different areas in 2020. Those who had moved according to the study were residents from larger cities.

Many are making that move to the suburbs for “maybe tax reasons and lifestyle reasons,” he said, noting families still need more space for working remotely and virtual schooling.

“It’s a whole new view on what a house means to a family than it did 12 months ago,” he said.

Article Proivided by: Yahoo Money and Dhara Singh

Dhara Singh

·Reporter

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Why It’s Important to Price Your House Right Today

Monday, December 28, 2020

by Christie Cannon

Why It’s Important to Price Your House Right Today

Even in today’s sellers’ market, setting the right price for your house is one of the most valuable things you can do. According to the U.S. Economic Outlook by the National Association of Realtors (NAR), existing home prices nationwide are forecasted to increase by 4.5% in 2021. This means experts anticipate home values will continue climbing next year. Danielle Hale, Chief Economist for realtor.com, notes:

“We expect price gains to ease somewhat in 2021 and end 5.7% above 2020 levels, decelerating steadily through the spring and summer, and then gradually reaccelerating toward the end of the year.”

How to Price Your House

When it comes to setting the right price for your house, the goal is to increase visibility and drive more buyers your way. Instead of trying to win the negotiation with one buyer, you should price your house so that demand is maximized and more buyers want to take a look.

As a seller in today’s market, you might be thinking about pricing your house on the high end while so many of today’s buyers are searching harder than ever just to find a home to purchase. But here’s the thing – a high price tag does not mean you’re going to cash in big on the sale. It’s actually more likely to deter buyers.

Right now, even when there are so few houses for sale, your house is more likely to sit on the market longer or require a price drop that can send buyers running if it isn’t priced just right from the very beginning.It’s important to make sure your house is priced correctly by working with a trusted real estate professional throughout the process. When you price it competitively from the start, you won’t be negotiating with one buyer. Instead, you’ll likely have multiple buyers competing for the house, potentially increasing the final sale price.

The key is to make sure your house is priced to sell immediately. This way, it will be seen by the greatest number of buyers. More than one of them may be interested, and it will be more likely to sell at a competitive price.

Bottom Line

Let's connect to price your house correctly from the start so you can maximize your exposure and your return.

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Why Pricing Your House Right Is Essential

Monday, October 5, 2020

by Christie Cannon

Why Pricing Your House Right Is Essential

In today’s real estate market, setting the right price for your house is one of the most valuable things you can do.

According to the U.S. Economic Outlook by the National Association of Realtors (NAR), existing home prices nationwide are forecasted to increase 4.7% in 2020 and 4.1% in 2021. This means experts anticipate home values will continue climbing into next year. Today, low inventory is largely keeping prices from depreciating. Danielle Hale, Chief Economist at realtor.com, notes:

“Looking at the sheer number of buyers, low mortgage rates, and limited sellers, the strength of home prices–which are now growing at the highest pace since January 2018–makes sense.”

When it comes to pricing your home, the goal is to increase visibility and drive more buyers your way. Instead of trying to win the negotiation with one buyer, you should price your house so that demand is maximized and more buyers want to take a look.

How to Price Your Home

As a seller, you might be thinking about pricing your house on the high end while so many of today’s buyers are searching harder than ever just to find a home to purchase. You’re thinking, higher price, greater profit, right? But here’s the thing – a high price tag does not mean you’re going to cash in big on the sale. It’s actually more likely to deter buyers and have them looking at the houses your neighbors are selling instead.

Even today, when the advantage tips toward sellers because there are so few houses for sale, your house is more likely to sit on the market longer or require a price drop that can send buyers running in the other direction if it isn’t priced just right.

A Trusted Real Estate Professional Will Help

It’s important to make sure your house is priced correctly by working in partnership with a trusted real estate professional. When you price it competitively, you won’t be negotiating with one buyer over the price. Instead, you’ll have multiple buyers competing for the home, and that’s what ultimately increases the final sale price.

The key is making sure your house is priced to sell immediately. That way, it will be seen by the most buyers. More than one of them may be interested, and your house will be more likely to sell at a competitive price.

Bottom Line

If you're thinking about listing your house this fall, let’s discuss how to price it right so you can maximize your exposure and your return.

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Why You Should Think About Listing Prices Like an Auction’s Reserve Price