Selling my home: Pricing Suggestions HI/LOW

[BayIslandSaver]

Hi All,

I'm racking my brain regarding the list price of my home that will hit MLS next week.
(I have to relocate for a job)

A little background:
Home was purchased as a short sale 5 years ago for $410K.  I've put probably $15K into renovations along with a whole slew of 'sweat equity'.  The local market has been booming lately with similar homes going for 10-15% over list price (SF Bay Area).
The most recent comps sold in the last 2 months were:

5/14 - $453K (listed for 398K)
5/30 - $432K (listed for 432K)
7/3  -  $467K (listed for 399K)
8/9  -  $427K (listed for 399K)

In terms of condition, my listing will be fully renovated, while all the previous similar sales were partially at best.  The location and other factors like proximity to major streets, sq. footage, layout are all similar.

So, my question is should I follow the pattern of listing low ($399K) with the assumption that the price will be bidded up, or should I price on the low end of the market rate ($427K) and hope that its bidded up from there?  The inventory is extremely low in my area (decent schools), and there are a couple of similar units on the market listed for $499K.

My agent suggests to list as low as possible (of course).  Understandably, the market has slowed mainly due to the quick bump in rates.  At the moment, my agent is suggestion sticking to the list low method and come in at $408K.  I'm on the fence between listing here or maybe bumping it to $429K.  I know there is a lot of price psychology out there, but any tips or experiences are welcome.

[Forcus]

Hi All,

I'm racking my brain regarding the list price of my home that will hit MLS next week.
(I have to relocate for a job)

A little background:
Home was purchased as a short sale 5 years ago for $410K.  I've put probably $15K into renovations along with a whole slew of 'sweat equity'.  The local market has been booming lately with similar homes going for 10-15% over list price (SF Bay Area).
The most recent comps sold in the last 2 months were:

5/14 - $453K (listed for 398K)
5/30 - $432K (listed for 432K)
7/3  -  $467K (listed for 399K)
8/9  -  $427K (listed for 399K)

In terms of condition, my listing will be fully renovated, while all the previous similar sales were partially at best.  The location and other factors like proximity to major streets, sq. footage, layout are all similar.

So, my question is should I follow the pattern of listing low ($399K) with the assumption that the price will be bidded up, or should I price on the low end of the market rate ($427K) and hope that its bidded up from there?  The inventory is extremely low in my area (decent schools), and there are a couple of similar units on the market listed for $499K.

My agent suggests to list as low as possible (of course).  Understandably, the market has slowed mainly due to the quick bump in rates.  At the moment, my agent is suggestion sticking to the list low method and come in at $408K.  I'm on the fence between listing here or maybe bumping it to $429K.  I know there is a lot of price psychology out there, but any tips or experiences are welcome.

Split the difference between "low" and "market"? Listing low to me is almost as bad as listing too high. It signals to me that something is wrong, majorly wrong, that lipstick (paint and flooring) can't cover up - true or not.

[Numbers Man]

If your agent knows the area and sells a lot of homes, then listen to the agent. The agent will show you the comps and selling price per square foot of similar homes. That's why you're hiring the agent. The listing price is the most important part of selling your home. If you over price then you will chase the market and end up eventually selling in a year or two at a lower price than today.

Do not micromanage selling your home.

[Forcus]

If your agent knows the area and sells a lot of homes, then listen to the agent. The agent will show you the comps and selling price per square foot of similar homes. That's why you're hiring the agent. The listing price is the most important part of selling your home. If you over price then you will chase the market and end up eventually selling in a year or two at a lower price than today.

Do not micromanage selling your home.

I agree with this as long as your agent doesn't have an alterior motive. If they truly know the market and you are in agreement on the timeline you are willing to bear to get the most out of the sale, that's fine. After all, the more you get, the more the agent gets. But if the agent has other influencing factors - their dog needs surgery, owes to a loan shark, etc etc - they may not be fully working to your benefit, just working to their personal timeline. Just a thought...

[BayIslandSaver]

Thanks for all the quick responses!

I don't think my agent has any ulterior motive, but like all agents they want the sale to close and not linger. 

As Forcus suggested, I'm leaning towards splitting the difference, or slightly below.  Maybe $408K?
I've read that '4' is considered bad luck but '8' is good. 
This is my first home sale, so I'm pretty nervous and excited at the same time :)

[Another Reader]

It depends on where you are and where your home fits into the area pricewise.  The market in San Jose has slowed down a lot, even in the sub-$1MM price range.  If you are in the low-middle of the range in your area, price it a little below recent closed sales.  If it's on the high end, you may have a little more trouble, so you might want to go a little lower on list price. 

Is anything in your subdivision (not just your model) currently for sale?  If so, what are the "days on market" for those houses?  Are they getting showings?  Offers?  Is there anything pending?  The current market is not described by what closed but by the level of activity today.

[SnackDog]

Definitely list it for $399K.  Get a good listing agent who know how to manage a sale in a seller's market and it will ultimately sell for the correct market price (above $400K) just like other homes have.  If you list it over $400K you are guaranteed to miss out on potential buyers/bidders who would eventually be willing to pay over $400K.

[pl28]

I think pricing too low does not guarantee a bidding war. I would price where the market is selling similar homes like yours.  You seem to have a good idea of what the home will sell for, so you should trust yourself. You can also use redfin's website to pull some comps and their "price your home tool". 

I remember reading a study where real estate agents keep home longer on the market when selling their own home vs clients. So if you not in a hurry, I would try to get at least market value.

[zinethstache]

This is a subtle suggestion. Be sure your agent makes the last three digits some sort of number to catch the eye of realtors or buyers who shop like I do. I have an MLS report single line per property and the numbers all look the same so when someone puts a silly ending number like 123 I am drawn to it and always click to check it out. You could use something you feel is lucky like your kids birthday, your birthday, etc. Every little nuance will make a difference.

In my area I study closed properties and right now just about all of them that sell the minute they hit the market are bidding wars, closing at 5k+ higher than list price.

[feelingroovy]

I don't really have good advice, other than if you trust your agent and are confident it's a seller's market, then do what the agent says.

One of the things agents in my area do if they're expecting a property to be bid up is include in the listing "All offers will be reviewed on Date" where the date is usually 5-7 days out.  It's a bit of a code that this is a really great house that will sell right away, and offers will need to be over asking.  I've seen houses get bid up $20-30k, 10-15%.

[Hamster]

...  Maybe $408K?
I've read that '4' is considered bad luck but '8' is good. 
This is my first home sale, so I'm pretty nervous and excited at the same time :)

In Chinese, 4 sounds like death and 8 sounds like prosper, so $408,888, and maybe all the auspicious 8s will offset the inauspicious 4s. At least, if you want to price based on Chinese numerological superstition.