The problem with pricing a home is that the “target is always moving”

Nothing stays the same forever… we all know that and this is true for Palos Verdes home values or home prices in any real estate market … the Best Cities of Redondo Beach, Hermosa Beach, Manhattan Beach, and Torrance.

Prices are always changing.

There are tons of reasons for this. Each seller’s reason and motivation for selling is different … each buyer’s reason and motivation for buying is different.

Look, I’m not trying to make excuses here but if you’re thinking of selling your home and basing who you hire on what that agent thinks your home is worth …. well, you’re nuts. A real estate agent is the last person that knows what your home is worth to a buyer. What better proof is there than the massive volume of price reductions we see every day throughout the South Bay area.

Sure, in hot markets like the one we’re experiencing now, there are fewer price reductions but there are still a significant number.

So how do you price your home when values are rising? Is it as bad as a guy throwing a dart while blindfolded?

I know what you think I’m going to say … A competitive market analysis right? Look at past closed sales and compare and contrast those home sales to your property. Ok fine, that’s important. But it’s not nearly as important as looking at the sales now in escrow! These are the sales that are indicating what the market is doing NOW compared to the dance that buyers and sellers danced months ago. That was then… this is now. It’s that simple. So what’s in escrow right now that’s competitive to your home?

The key question to ask about your home’s market value

If your home were on the market at the time these homes went into escrow, would a buyer buy your home or the one that you’re studying that’s in escrow now?

Now let’s think about the statement I made above about hiring a broker based on what they think your home is worth. This is really a math question and a human emotion question. Here’s what I mean.

You do realize there are over 6,000 real estate agents in just the South Bay, don’t you? In 2018, 2019, and 2020 there was an average of 612 sales per year. Think about that a second, that means there was about 1/10th of a sale per agent. You understand that no human being can live off the commissions from 1/10th of a sale per year. Can we agree on that? That’s the math part. The human emotion part is fear. Because of those numbers, the crushing overwhelming odds are that whomever you interview, they are going to be afraid of losing your business.

FEAR

So when an agent is experiencing that fear, what does the typical agent do that is afraid of telling you the truth? They lie. Oh maybe they don’t intentionally lie, but the result is the same. They tell you a price that they think you want to hear. Not knowing any better, that’s the agent most homeowners selling their homes end up listing with. The fallout is predictable and you see it all the time; price reduction after price reduction after price reduction resulting in one outcome.

You end up selling your home for less than what you could have sold it for had you priced it right with an agent that had the courage to TELL YOU THE TRUTH!

Ok fine, I digressed a bit off the message and the message is this … when prices are rising at the rate they’ve been rising (this article is written on 3/5/2021), then the best thing to do is focus on those homes in escrow now and asking what you would have had to list your home for to make that buyer buy your home instead of the one they did had yours been on the market at the same time.

What’s an easy way to find what homes are in escrow now? For Palos Verdes homes, it’s easy, just follow this link and bookmark it. It will ALWAYS update with what’s in escrow right now.

By the way, have you ever wondered how many buyers are actually searching for a home like yours? Enter your address here and find out for free

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