Recently heard on the ground from a client.
“Why didn’t I even get any low ball offers?”
Short answer. Because you were overpriced.
Do People Make Low Ball Offers?
Not really. Because buyers and their agents don’t really believe they will be successful. If a seller seems delusional with price chances are they will remain delusional during a negotiation.
Is this reflected in the numbers?
For Scottsdale here is all of the sold data for the last 6 months. Data taken from Arizona Regional Multiple Listing Service.
|Number of Sales||Original List Price||List Price At Time of Sale||Price Reduction||Final Sales Price||Negotiated Discount|
To make a sale happen sellers are more likely to compromise price themselves than during the negotiation. Total discount from original list price is 13.3%.
If the market was showing evidence of low ball offers sellers would remain firm with their original sales price and then the negotiated discount would be higher. As you can see home sellers who were overpriced felt the need to price reduce on average 8.6% to get into the focus of buyers.
What Does This Mean If I Am A Home Seller?
Well if average negotiated discount is 5% pricing more than 5% above fair market value is going to be a bad decision. Pricing at market value from the start is far better. You get the most viewings, the most chances for offers and if you have a nice home and it’s priced fairly you have a good chance of getting multiple offers.
Fair Market Value
Remember when pricing your home fair market value is not related to what everyone else in your neighborhood is pricing their home for sale at. Unsold homes never provide a good comparison. You have to run the numbers on what is actually being snapped up by buyers normally this means closed home data.
As the market in Scottsdale seems to be on the turn I suggest also keeping an eye on homes that are currently under contract. While you don’t know if these homes will close for sure, and at what price. You do know the listings were attracting buyers.
It’s a pretty good time to be a seller in Scottsdale right now. But remember pricing way above fair market value and hoping for low ball offers to get a negotiation started is not a good strategy. Either your home will sit on the market or you will end up reducing price which shows significant weakness to buyers.