Pricing below market or at market? What yields the best results?

[Jeff Rabinowitz]

Here's the scenario:

1. You have a beautiful property. Everything is new and/or updated. The features are on par with or exceed all of the comps. It has several unique and very desirable features. It is staged great and shows as well as it can.

2. The neighborhood is booming. It is walking distance to a trendy downtown in a popular area. There are rehabs/upgrades and new construction on almost every block.

3. Prices are rising. Homes are selling quickly. Every search shows activity. Price increases are much more frequent than price decreases among the comps.

4. The owner is not facing any time pressures. They are comfortable financially and have either already moved or will be moving soon. They can wait as long as necessary to maximize the sales price.

5. You don't care about the appraised price. Buyer's are bringing large down payments to secure homes. Any offer that is accepted will stipulate that the home may not appraise and that the buyer will be required to make up the difference. You will not allow a buyer to make a high offer and then knock it down to a low appraisal.

Do you price your listing at the market or do you price under the market hoping for multiple bids to drive the price higher? Do you price significantly below market and try to create a feeding frenzy? For those of you who are agents (as I am) I know the under market listing will bring a fast sale (and commission) but what scenario do you expect will bring the best outcome for the seller/owner?

[Amit M.]

yeah, I'm reading your list and thinking...sounds like San Francisco!

The key, IMO, is to be sure the market is still very active and hot. Most SF props I see are 10-20% below expected. Some are way less. I know, i've been in a bidding war like that, and it gets frustrating when the over bid is so high. (Interestingly, I've heard through the grapevine that the winning bidder is getting cold feet, so prop may come back on market...that can happen too.)

Also, a lot of this is regional/cultural. I know nothing about your area, so just make sure you're not doing something way off the norm. Here, for better or worse, it is the norm.