Misleading metrics #1: "Sold over asking price"

Before I got my real estate license, I used to sell my own houses without a conventional real estate agent. It’s a high stakes, relatively risky and time-consuming path to take, so I always met with two or three agents first to check if there was a better option out there for me. (There wasn’t.)

One agent in particular stood out from all these meetings - and not for good reasons. Things started going south shortly after he arrived at the house, when he told me I needed to repaint the exterior because it was the wrong color. (It was an older Mediterranean-style house, painted yellowish-brown - the sort of color you often see on, er, Mediterranean-style houses.). Next, he refused to go down into the basement - which rather begged the question of how he’d answer buyers’ questions about what was down there.

But what really killed his pitch was when he boasted that he’d just sold a house in the neighborhood “over asking price”. Strictly speaking this was true - the house he was talking about sold for about $50,000 more than the list price. But that wasn’t the whole story. As someone who buys, builds and sells houses, I spend a lot of time analyzing local markets - and I knew he’d originally listed the house at a much higher price and then had to cut it. Twice. In fact, the house sold $200,000 lower than his original asking price - which suggests he either priced it wrong in the first place or did a pretty lame job of selling it.

Worse, the concept of selling “over asking” has long been devalued in many Bay Area cities. In hot housing markets here, it’s standard practice to price single family homes below market rate to drum up interest and generate multiple offers. Selling a house “over asking” is a bit like saying I sold it while wearing clean underpants - it’s just what everyone does.

The real issue isn’t the asking price. It’s whether the agent’s pricing and marketing strategies attracted a wide enough pool of buyers to generate the maximum number of offers, and whether they then negotiated the best possible deal for the homeowner. But that kind of analysis doesn’t fit into a snappy marketing message - and there’s no easy way of proving it. 

Which is why I sent a neighborhood mailshot after my last house sale boasting that it went “$300,000+ over asking”. And, yes, my underwear was in pristine condition. Go me.

IMPORTANT NOTICES:

All content provided here is provided for general informational purposes only. The Dachshund's Undercarriage and Keith Rodgers:

• Make no representations or warranties regarding accuracy, completeness, or timeliness

• Assume no responsibility for errors or omissions

• Are not responsible for any results obtained from use of the information

No Professional Advice. Nothing on this Site constitutes legal, financial, real estate, or other professional advice. You should consult appropriate licensed professionals before making decisions.

All content is provided “as is” and “as available”, without warranties of any kind, express or implied, including merchantability or fitness for a particular purpose.

Please review our full “Terms and Conditions”, which govern your use of this website.

If you are represented by a real estate broker to sell your property or purchase property, this is not intended as a solicitation.

The views expressed in this article do not necessarily reflect the views of Pinnacle Realty Advisors. Pinnacle Realty Advisors is a licensed real estate broker (02220139) in the State of California and abides by Equal Housing Opportunity laws.