It seemed like a can't-miss strategy.
Unsold homes with motivated sellers could be sold quickly. All they'd need was a bold change in price.
Buyers would notice and flock to the homes, whatever the recent market history.
Ka-ching! Instant sales!
Surely this would work, right?
Even in late Fall…
It seemed like a can't-miss strategy.
Unsold homes with motivated sellers could be sold quickly. All they'd need was a bold change in price.
Buyers would notice and flock to the homes, whatever the recent market history.
Ka-ching! Instant sales!
Surely this would work, right?
Even in late Fall 2022, right?
Two unsold Tree Section listings tried this strategy at the same time in mid-November. (With the same listing agent, as it happens.)
And both did sell quickly, but...
Their "come and get it" ultra-low new list prices didn't really draw so much action that they could sell much higher.
Together with a recent, bona fide auction in East Manhattan Beach, these results illustrate the risk of a pricing strategy that amounts to an attempt to generate an auction.
3616 Elm Avenue (3br/2ba, 1714 sqft.) is an SFR at the corner with Rosecrans that was first listed in July at $2.300M, quitting the market in early November at $1.899M.
The bold re-listing strategy?
Drop it $300K more!
The new, mid-November asking price was $1.599M.
The last words of the excited listing description: "This home will sell fast don’t miss out to live in Manhattan Beach."
(Both this property and the other mentioned in this story were listed by Daniel Jensen, Jensen Realty.)
The 15 days between listing and purchase contract qualified as pretty "fast" in this market, especially as Thanksgiving neared.
The sold price, now: $1.653M.
Yes, that was $54K over asking, no doubt reflecting some competition.
And we do often say, if you can get 2 or more qualified bidders competing, you'll find the market price, and should have no cause for second thoughts later.
Still, it must have felt like falling off a cliff to sell a house once envisioned at $2.300M for basically $650K less (-28%). Yikes.
The drop was a bit less dramatic at 3004 Oak Avenue (3br/2ba, 1794 sqft.)
We already featured this result a couple weeks back in "One House's Slide with the Market."
This is a remodeled, expanded home backing up to (quiet) commercial property on Sepulveda. The home has a second story in back where the primary suite was added.
The home was marketed for parts of Summer (July-Sept.) at $2.650M, then re-listed for another month at $2.495M.
The bold re-listing strategy?
Drop it (almost) $300K more!
The new, mid-November asking price was $2.199M.
It took only 7 days to draw an offer.
The sold price, now: $2.200M.
This may have been a letdown, too, only $1K over asking. And, of course, $300K-$450K less than what the sellers once had expected that they could get.
The mission to sell both homes was successful. Ask around, there aren't as many realtors touting successes these days as usual.
We're most struck by these two numbers: After $600K in cuts, we saw only $54K in overbids on two Tree Section home sales.
It's almost like the sellers wound up selling at their reserve prices.
Now, you shouldn't generalize from two late-November sales in a market rife with uncertainty.
But you also can't take away the lesson that "under-pricing" to draw quick bids is going to get you a great result right now.
These examples only add to the uncertainty factor as sellers prepare to test the market over the next 2-3 months.
Please see our blog disclaimer.
Listings presented above are supplied via the MLS and are brokered by a variety of agents and firms, not Dave Fratello or Edge Real Estate Agency, unless so stated with the listing. Images and links to properties above lead to a full MLS display of information, including home details, lot size, all photos, and listing broker and agent information and contact information.
