Insights from RE Pros about Listing Price (Denver: sales, real estate)

[Thom Hanks]

Hello all,

I bought a 2BR/2BA condo in Denver a couple of years ago and it was appraised at $180k. I had expressed interest to my realtor for selling the place and he's been in touch with me on and off for the past several months. He reached out to me and said they'd suggest listing my place at $240k based on comps in the area. That's great news, but that also seems very high to me. I'm on the HOA board, and I've heard through the grapevine what others have been selling their places for around the community and the highest I've heard so far is around $225k.

I'm just wondering if anyone familiar with the RE business understands what is going on here. Am I being bamboozled here? Is this some sort of industry-wide sales tactic? Or does this seem like a reasonable assessment? Just curious. Thanks!

[Vision67]

If you are a RE agent and you want to get a listing, do you tell the client the property is worth more or less?

You can always reduce the price after the house is listed.

[Thom Hanks]

Originally Posted by Vision67

If you are a RE agent and you want to get a listing, do you tell the client the property is worth more or less?

You can always reduce the price after the house is listed.

I understand what you're getting at. Is having a listing for the sake of having a listing a big deal? The reason I ask is because I think it'd be more ideal to set a realistic expectation for the seller than to put on a price tag that is far too high, and then end up selling for much less than you expected to sell for. If the offers I received deviated far below that $240k mark, I'd probably decide not to sell it. So it makes you wonder why they'd put all the effort and money into listing a property for a price that they (may or may not) know is too high.

[emm74]

Having a listing is what earns you a commission when it sells, regardless of the selling price.

When was the most recent sale in your building? You should be able to go to recolorado.com, use the advanced search settings and see the actual sale prices of the units that have closed.

If it was more than a couple of months ago, it's possible that a reasonable listing price could be as high as 240, knowing that you'd be likely to end up accepting a negotiated amount somewhere below that. I just posted a thread on the RE forum where I might be low in what I think the reasonable market value/listing price in my neighborhood, and that prices having been continuing to rise pretty quickly

Price high to sell faster?

[Thom Hanks]

Originally Posted by emm74

Having a listing is what earns you a commission when it sells, regardless of the selling price.

When was the most recent sale in your building? You should be able to go to recolorado.com, use the advanced search settings and see the actual sale prices of the units that have closed.

If it was more than a couple of months ago, it's possible that a reasonable listing price could be as high as 240, knowing that you'd be likely to end up accepting a negotiated amount somewhere below that. I just posted a thread on the RE forum where I might be low in what I think the reasonable market value/listing price in my neighborhood, and that prices having been continuing to rise pretty quickly

Price high to sell faster?

I looked around on the recolorado.com website, and found a few places of equivalent size that sold for around $230k earlier this year. I know that the summer tends to heat up the housing market a bit, so maybe that's where the speculation is coming from for that $240k price point. I just thought it seemed like a significant jump from when I originally purchased it.

[emm74]

Yes, it's a big jump from when you bought it. But when I bought new construction in June 2014, by the time I closed at the end of November 2014, it appraised for 7.5% more than my contract price. When I had it appraised at the end of last summer for a re-fi, I was up a total of 20% above my purchase price. And now it looks like it's closing in on 30% above my purchase price.

So 180K to 240ish doesn't seem that out of the question to me. Maybe 240 is a little aggressive but you can always negotiate down a bit from there, and probably end up somewhere in the 230s.

[Mike from back east]

Some over zealous agents will give a prospective client a rosy scenario, high-ball estimate to get the listing. Inflated prices often lead to lengthy timeframes to get under contract or eventual repricing down to more realistic levels. IMO it's an unethical practice.

In your case if there are comps at $230k and your realtor is saying $240k it seems in line with reality. You can always lower a price but it's hard to raise a price if your offering is too low.

[Thom Hanks]

Originally Posted by Mike from back east

You can always lower a price but it's hard to raise a price if your offering is too low.

That's a good point. Maybe they're just setting the bar a little higher so we can get down to the $230k-ish point.

[mic111]

I'm not a real estate pro but I though the reverse was the common tactic nowadays. If it is comped at $225 then set the price at $220 to get a ton of people in the door and multiple bids the first week. Then sell for $230.

[Mike from back east]

Originally Posted by Thom Hanks

That's a good point. Maybe they're just setting the bar a little higher so we can get down to the $230k-ish point.

Most likely that's the case...most buyers dicker for a reduction for various reason, sometimes a 'redecoration allowance' if they don't like the paint or paper or carpet, etc.