Strategic Pricing in this East Bay Market

by arlene on October 24, 2019

Percentage over list in the East Bay

Percentage over list in the East Bay

I occasionally answer questions in the real estate section of SFGate, participating in a column called Sound Off. When I started several years ago, one agent per week had an opportunity to respond to a question with enough space to give a fairly thorough answer. As demand to participate increased, they changed the format and now three agents are asked to respond to a question in 125-150 words. For someone like me, who likes to give thorough, and even nuanced answers, the size limitation is not very satisfying.

Two Sundays ago it was particularly frustrating to respond to what is really a multi-part question. (And I noticed the other contributors did not stick to the size limitations; I probably won’t either next time!) Here was the question:
“How do you go about setting a list price? Does pricing below market rate always cause a bidding war, or can that backfire?”
The article below is how I would respond, given more space. And even that is not all I’d like to share about pricing. Let me know if this topic interests you!

Right now the challenges of pricing are apparent in our autumn market, as each day, sometimes several times a day, I’m receiving messages from agents whose listings have not received the desired level of attention and price adjustments are required. I feel grateful, but also proud that is not a situation my sellers have experienced.

Pricing a listing is very much an art, not a science. It requires careful analysis of many factors of the property and the market. Local practice for the past several decades has been to price below market value, hoping that the low price combined with broad public exposure will inspire interest, resulting in multiple offers and a sales price both higher than list, and also higher than if the property were listed at market value. Overbidding varies both by City and by neighborhood within each City, with Berkeley leading the practice and commanding prices on average 10-15% over list price. But one needn’t venture very far afield to find communities where sales prices routinely stay close to list, or fall below. It’s primarily within the core of the East Bay and within San Francisco that pricing below market value is a key part of the marketing strategy of most listings, making pricing all the trickier to get right.

Of course receiving numerous offers, or creating a “bidding war” is not the goal, but actually having a strong offer close escrow. In my 23-year career, strategic pricing has indeed resulted in sales above list price for 100% of my listings, during all markets, strong as well as challenged! I could not achieve that remarkable record without staying well-informed of what’s going on in the immediate neighborhood of each listing, and observing first-hand how similar properties have been priced and presented, and how they were received.

Here are what I consider the key considerations for pricing a listing:
• Needs and goals of the seller
• Condition of the property
• Location, and its relative desirability
• Recent sales activity level in the neighborhood
• Recent nearby sales prices
• Time of year
• Approach and reputation of the agent: an important and under-appreciated factor
• General pricing approach in the area
• Overall economic environment

For a complete discussion of each of these key elements, read the article Tips for Strategic Pricing.

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Enchanting Retreat in Sylvan Setting

by arlene on April 20, 2019

03It’s been my pleasure to have several listings in North Berkeley this year, the current one being a very charming cottage in the woods at 1470 Campus Drive in the Berkeley hills. The initial response has been excellent, with many requests to review the disclosures. I always actively market my listings, especially to other agents. For this current listing I chose to do some special marketing in order to capture the unique setting. A short video of the exterior, with a quick fly-through, is helping buyers get a sense of the context of this cottage within the deep wooded lot of over 9300 sq. ft. It’s difficult from the street to fully appreciate that while in the home you are surrounded by views of green from every window! And yet it’s truly only a five minute drive to the heart of Gourmet Ghetto at Shattuck and Vine. My first open house last weekend was constantly busy, with lots of people smitten with the tranquility and beauty of the setting. If you have a moment and want to experience a brief retreat to the hills this Easter Sunday, come visit from 2-4:30, and I’ll have cold lemonade waiting! And you just might catch a glimpse of the three resident turkeys!

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Tremendous Coverage for a Terrific Property! Open St. Patrick’s Day 2-4:30 PM

March 16, 2019

I am always excited to represent a listing, especially one in my own North Berkeley neigbhorhood, and especially such a beautiful property. But my current listing is special to me in many ways. I have known Barbara, one of the three siblings selling this home, since 1976 when we were both active Scottish dancers. I […]

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The 2019 Market Begins…and the importance of Kitchens!

March 3, 2019

The daffodils are blooming, and they have always been my harbingers of the beginning of the real estate market. After what felt like a very mixed but mostly sluggish fall market, 2019 appears to be off to a strong start. But we may see some subtle (and some less subtle!) changes. At least for January, […]

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Transformations: Magic in Materials, Paint and Staging!

April 18, 2018

A particularly satisfying part of my job is to use a seller’s funds, often quite limited, in the most cost-effective manner possible. And I also enjoy the artistic component of choosing materials that will make a major difference in the appearance of a home. At my latest listing at 68Northampton.com, an elegant Mediterranean in North […]

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Tastefully updated Tudor in a sylvan setting

March 19, 2018

Bringing on a new listing can be tremendously satisfying.  I especially enjoy debuting homes in the spring, as the real estate emerges from dormancy along with flowering bulb and budding trees. Last week I debuted a home that I’ve come to love ever more each time I spend time there. 2577 Rose Street sits at the top of Rose […]

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Be Prepared!

November 15, 2017

The unprecedented damage caused by the North Bay fires has shaken assumptions about what is a “safe” area.  As we recover from the grief, as well as face the phenomenal physical damage, I hope this tragedy will serve as the most compelling wake-up call possible. Gentle readers, please make sure you take action now to make a […]

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Behind the Curtain: How I Distinguish Myself as a Listing Agent!

August 26, 2017

I recently had one of the hottest listings possible, so I thought I’d share some information from behind the scenes. The listing was 10700 Lochard (see link below), unusual in being a small house in a neighborhood of much larger homes. It had a large lot–over 1/4 acre–and a huge amount of character. As you […]

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Seasonal Shifts: Normal…and Crazy-Making!

July 27, 2017

Dear Neighbors and Friends, It’s easy to forget that in fact every year, even during very active markets, real estate experiences seasonality. There is a significant difference in behavior between the early spring with its characteristic very low inventory, and the summer, when generally buyers have more choices, and more fatigue. You would think that […]

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New for 2017: CA Law for Low Use Water Fixtures

January 11, 2017

California now leads the nation with standards that could save over 10 billion gallons of water in the first year and eventually over 100 billion gallons of water per year according to the California Energy Commission. Effective January 1, 2017, new water conservation regulations took effect for interior water fixtures in almost all single family […]

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