It’s no secret that much of L.A. real estate sells for more
than the asking price. And it’s no
secret that Realtors sometimes price their properties for a little less what
they will certainly sell for in order to quickly get offers. The sales price of a particular property –
what qualified buyers are willing to pay for a property, along with
availability of funding, comparable home sales and property condition – usually
winds up being exactly what the home is worth in the current market.
But how much is too much when it comes to underpricing?
Recently, I have been looking for properties for clients on the popular
eastside of L.A. And I have seen places
deliberately priced for more than $100,000 under what they will eventually sell
for. Yup, One. Hundred. Thousand.
Dollars. Less. The Realtors know
it. The sellers know it. A lot of buyers don’t know it, though, and
get excited about the prospect of buying in their desired neighborhood. A lot
of buyers’ hearts get broken.
Why is this extreme underpricing necessary? All it does is disappoint many, many
potential buyers who will never be able to really afford the particular
property. It wastes everybody’s
time. And it creates a lot of unnecessary
drama around the showings and the marketing process. Who benefits from this approach? In a hot
market, the sellers are going to get the best price the market will bear
anyway. Is it bragging rights? Do the
Realtors and sellers need that much attention?
C’mon, guys; let’s try to bring some fairness to a process that’s
already pretty unpleasant.
