Our next podcast discussing changes in real estate is here! Check it out to learn about handling changes in investment strategies.
Today Marcia and I talk about the process behind pricing a residential property.
René Nelson, Eugene commercial real estate broker
Marcia Edwards, Eugene residential real estate broker
Legislative Changes in Real Estate – Part 6
René Nelson: Hey, Marcia, let’s talk about pricing strategy and how you do that with single-family homes.
Marcia Edwards: Well, it’s so unpredictable right now, I don’t know how the appraisers are doing it. I admire their efforts to really find a basis for these prices we’re selling properties at. It’s going pretty well though. The prices are keeping up with the market. I think it’s a realization that it’s not a bubble, it is a supply-side problem, which is a little bit different. It’s not something that’s going to tank and remain and make these buyers vulnerable in the future.
René Nelson: Well, we’ve talked about you receiving multiple offers on a property, so how do you do that when you’re helping advise a seller on where to price their property?
Marcia Edwards: Well, like an appraiser, we look at history to base our planning number on, but that’s not necessarily the optimum sales price available in this market today. If there’s one home for sale under 500,000 in the Ferry Street Bridge area, we should play the heat of that market, and respectful. We’ve gotta honor these buyers and make the process predictable, but let’s say we put the home on the market Thursday, over the weekend people view the property, and by the following Wednesday, they have to get their offer in front of the seller. So we set a deadline, and so what we’re going to do is we’re going to set the price a little tighter than what you’d guess it will sell for because you cannot predict what it’ll sell for. You’re trying to get all the people you can through the front door to start that auction type scenario.
René Nelson: Okay, and do you just call for best and final offers when agents start putting in bids or putting in offers? How do you do that?
Marcia Edwards: There are not a lot of second chances in this market, so to hold your hand is not a wise strategy. I’d say, decide what it’s worth to you, decide what it’ll be worth to you in this market given the other opportunities. On limited opportunities, you may need to move now. Make a smart choice, but also recognize that you’re not going to get it unless you’re really aggressive.
René Nelson: Okay, so what I hear you saying is if you’re advising a seller and let’s say the property would sell or you’d list it for 500,000. You’re recommending listing it slightly below, so you have an auction-like atmosphere and a flood of buyers looking and interested?
Marcia Edwards: Yes, what you’ve got to do is you’ve gotta get as many people through the front door as possible. Like any auction, if you think about an art auction, they do price it out of the gate lower than they anticipate the sale to be, and that is to get the interest and the heat and the emotions going. If you go inside a house, then you’ve got the emotional attachment to it and you want it more, and then you’ll raise your price on your own to get that property.
René Nelson: Yeah, that makes sense.
Marcia Edwards: It’s a fascinating market. I’m learning every day.
If you’d like help understanding the true income value of a property that you’re interested in investing in, schedule a 15-minute discovery call with expert René Nelson today.