A column in my local paper by Arthur White, titled “Change is in the air,” describes how he and other agents at Red Oak Realty in Berkeley and Oakland have “noticed a swell of real estate transactions that encountered multiple offers.” They list ten examples of homes that received between two and 21 offers, which naturally leads to “pushing prices up.”
Meanwhile, I can point to plenty of houses around Berkeley and Oakland that are sitting unsold, or sport “price reduced” signs. How is a seller supposed to enter a market that seems to be simultaneously hot and cold — and how is a buyer supposed to place intelligent bids?
For sellers, the advice White offers is the same as has been true throughout this tough market — though the message is still not penetrating to every seller: “Remember, not every listing gets into a bidding war. The difference lies in the listing price: Buyers don’t compete for overpriced properties, they compete when a property is priced in a way that is ‘too good to be true.'”
I know firsthand how emotionally difficult it can be, not to mention financially worrisome, when you advertise a price for your home that seems like you’re ready to give it away. But it has been proven to work over and over again, as the years of slow-moving real estate sales have dragged on.
Meanwhile, for buyers, White advises “courage and prudence” in a competitive situation. Don’t lose your head just because you imagine that the other buyers are going to outbid you by some unknown amount. Looking at average prices of comparable sales in the past few months should continue to be your guide. And if you lose out on this house, well, the market is still far from super-hot — and another one will come along. (In fact, maybe you’ll find one that’s been sitting on the market so long that the once-unrealistic seller is ready for a major price reduction.)