Am I being too greedy with my asking price or impatient?

Question

Good day BP and Happy Father's Day to all the Dads!

I'm currently in the process of selling my first property. It is a 1500 sqft 3 bed 3 bath condo about a 5-minute walk to the beach. I live in Southern California and my property is currently listed at $1.05m. It has been on the market for about 45 days and has received modest interest from buyers.  The property is part of a large condominium and is located on the backside of the building (i.e., it does not have an ocean view). My agent informed me that comps in the area are selling between $840K-985K, however those properties are not as near to the beach as mine. I should also mention that properties with an ocean view in my condominium have sold between $1.2m-1.3m but also have less square footage and less bedrooms and bathrooms. It was with that consideration that I listed the property at $1.05.

Considering the circumstances, I would really appreciate your opinions on whether I am being greedy with the listing price or whether I should be patient, keep the selling price as it is, and wait for a serious buyer.

Bill B. · Answer

Are you afraid if you trust your agent and lower the price $20k to $985k. (Getting under the $1M mark as mentioned above.) A bidding war will break out and you’ll get $1.05. Or that you still won’t get an offer? Which one’s worse?

Personally I think $1.05 is not a smart listing price. You eliminated your listing from every buyer’s email that told their realtor they wanted to spend $1M or less.

It’s literally a 2% price drop. You don’t think your eventual buyer after this much time on the market will ask for at least that much closing help?

Sherry McQuage · Answer

Hello,

A good rule of thumb in NC I tell my sellers about: if we get lots of showings in the first 2-4 weeks, but no offers, the price is too high by a good bit (15-25% estimated).

If we get showings, and one low ball offer, the price is a little too high (5-10% too high).

The longer a property sits on the market, the more likely you'll end up accepting a lower price ...better to go ahead and do a price reduction now and sell it faster, than letting it sit and eventually the market will do the price cut for you.  Also, don't do incremental price reductions because you're chasing the market down.  Do a noticeable price reduction.

A property is worth what a ready, willing, and able buyer will pay for it.  If none step forward at the current price, then you're the buyer.  Especially if the condo can be a STR, an ocean view makes it more valuable...not to be a "butt head", but people can buy/rent and look at a parking lot anywhere for much less.

If you think you've got a good agent, take their advice.  There's always a slim chance a buyer will appear and pay what you're asking, but it's unlikely.  Many investors actually look for properties that have been on the market longer than the average for that area....and then they put in a low ball offer.

As I mentioned, I'm in NC...the slim chance that a buyer will come offer full price for an over-priced property is what we call "a buyer from California".  No offense intended.

Benjamin Aaker · Answer

This is a place that sellers often end up in: Considering lowering the price and how much to lower it. Time on the market is almost as important to prospective buyers as the price. "What secret defect is there that everyone but me knows about?"

You also have to consider your holding costs - you are paying HOA fees, insurance, and property taxes. You also are over the 1 million mental price point. A 1 million home is way more expensive than one for $999,999 in peoples' minds. You might want to reconsider your agent's expert opinion on price. Get it sold and move on.

Andy Eakes · Answer

Have you received any offers at all? Sometimes dropping the price boosts listing attention and you end up getting offers that you can work with in a counter. But that should really be considered on a case by case basis. It's tough to answer this question without knowing how your property is being marketed, perceived by buyers, stacking up against similar listings around you, etc.

My recommendation is look at the comps yourself and be as realistic as possible. A lot can change in 45 days. If your condo doesn't have an ocean view then don't compare your property to ones with a view. Depending on where you're located, an ocean view can significantly boost value.The best comps will be model matches of your unit within the complex. If that doesn't provide enough info, look for listings within a close radius, similar finishes, comparable HOA and amenities, and parking availability.

Hopefully that helps!

Crystal Smith · Answer

Have any condominiums in your building with an ocean view sold between $1.2-1.3M in the last 6 months.  If not, then your price may be too high and your agent may be right.  What has your agent told you about the average days on market for recently sold listings?  If the average is much less than 45 days then you are overpriced.  If the average is around 45 days then don't panic yet.

Steve Meyers · Answer

@David Minaya when did the condos that have sold between $1.2m-$1.3m sell?  Was this recent or over 6 months ago?  How long ago did the comps your agent provided you close?

The difficult part right now is money is expensive to borrow, a lot of buyers are on the sidelines waiting for borrowing to get cheaper.  I would recommend giving the buyer a 2-1 buydown credit to help offset the high rates.  Your agent can market this in the public remarks so buyers see this.

Yes property values are still appreciating but buyers look at the bottom line of how much is this property going to cost me on monthly basis and with rates in the high 6s the monthly payment is not attractive to a lot of buyers. Good luck

Russell Brazil · Answer

With very little information provided....sounds like $999k is a better price to be at.

Peter Mckernan · Answer

Always push for the bidding war, it will push the price higher than what anyone expects due to the competition overwhelm that buyers get and push the property to new heights. I listed a property in the IE a couple of months ago that the seller wanted top, top dollar for on the property. We listed at $960K knowing the market was about $1,100,000.. We sold for $1,218,000 cash (15 offers, 5 days on the market, and got a cash buyer that was going to live there and make it their own home for their family). Always push for the multiple offers

Peter Mckernan · Answer

First, what does it take in that specific community (timeframe-wise) to sell. If it is 45-60 days are doing well, if this is shorter than you are in a position where you are either priced too high or the condition is not good enough (or both).

Wesley I. · Answer

@David Minaya

Whats the activity during open houses? Any offers?

What coastal area? IB or PB?

I’ve seen a lot of price reductions but also seeing quick movement on properties that are priced right, maybe consider the advice to price it under a $1M.

Wish you the best!

Am I being too greedy with my asking price or impatient?

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