Token price reductionsPosted on Tuesday, May 1st, 2007 at 6:08am.
Look at 1413 Oak. Today this two-month-old listing "reduced" its price from $1.679m to $1.645m – a reduction of $34,000, or 2%.
Two percent? Why bother?
One answer is to "freshen" the listing by putting it on the week's "hot sheet." All reductions get treated as news, even if they're bogus. (Yes, even 2507 Valley will be given the treatment, despite the trickery there.)
Another answer is: The sellers are both nervous and stubborn. In this case, the sellers have had no nibbles at $1.679m. But they don't want to "give away" too much, either. They concede that a reduction is necessary, but not a real reduction.
At 2%, you're wasting everyone's time, your own included.
MBC would readily admit: If we sat down at a table and you offered $34,000 for nothing, that would seem like a lot of money. But in the weird world of real estate pricing, we don't pretend that's real money. You're trying to figure out how much to ask, you know you asked too much, so now you want to show movement. Fine. Act like you maybe mean it.
As always, we've inevitably singled out one listing when there are plenty of offenders. Examples abound.
In the Tree Section, 1733 Elm made two tiny steps to reduce asking by $50k, 3312 Maple dropped just $20k, and 758 14th recently dropped $65k to $1.925m. At least two of the three are now obviously overpriced, but they're stubborn.
You make these tiny, token moves at your own peril. Tiny reductions and bogus re-listings appear to be tactics intended to fool buyers, but today's buyers will see through it instantly. In fact, you'll increase the natural skepticism of buyers – they're less likely to think a seller will really deal if they see this stuff on your property's rap sheet.
If you think you priced it right, hold out. Again, in the Tree Section, 2812 Elm has done just that: 230 days at $1.769m. Someone will have to pay that, apparently.
If you think you guessed wrong, make real cuts. 2104 Poinsettia did that. They started at $2.099m in January, but took two separate $150k steps down. They went into escrow immediately after the second step down.
A quick glance at the "competition" among Tree Section listings (see the current MB Market Update) between $1.4m-$2.0m shows a mess of wrongly priced listings. MBC won't pretend to know the "right" prices, but every one of these has issues. Everyone could use a little guidance on where the market's really at to get some of these places sold.
UPDATE: This story originally named, and was unduly critical of, the listing agent. After an apology during a discussion with the agent, MBC volunteered to remove the reference. We would also note that we were wrong to think the home was vastly overpriced at $1.645m, since it sold somewhat later for $1.628m. Lessons learned.
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