It's Still Possible! Why Some Homes Sell for Asking Price (Or Less)
In the past few years, we have seen home prices skyrocket, and often sell well above the asking price. Although many buyers and sellers are getting accustomed to that scenario, it is important to keep in mind that not every home in Redwood City sells for 10-15%+ over the asking price.
There are some obvious reasons that some homes sell at, or even below, the asking price. The property could just be overpriced and end up selling closer to market value. Some properties are also not exposed to the market, and therefore avoid the cut-throat competition that often drives prices up. That could mean anything from the property being sold off-market, to the seller or listing agent not actively marketing the property, or not making the property available to the masses.
In other cases, the property doesn’t show well. Many buyers have come to expect touches like a fresh coat of paint and professional staging, so if a property is shown with clutter or hasn’t been updated, it can definitely have an impact on the bottom line. Finally, some properties have issues that can’t be overlooked, even in a market as hot as the Bay Area’s. Things like being located on a busy street, a funky floor plan, not having outdoor space, or parking can all drag the price down.
There are also some less obvious reasons such as timing, financing, and listing strategy that can mean a property will sell right around the asking price, without stirring up a competitive bidding war.
Timing is everything, especially when it comes to real estate. There may be several comparable properties that all come on the market at once. While Redwood City is a pretty diverse place in terms of architectural style and pricing, many homes are similar in size and age. For example, if five different 4bd/2.5ba homes all pop up for sale in the same neighborhood in the same week, buyers will have more options to choose from. Some of the homes may sit longer than others and ultimately sell for less than if they had come on the market a few weeks earlier or later. And as with every market, there are times when sales will slow down a bit, purely because of the calendar. May through August are typically slower months because of graduations, holidays, and summer vacations.
Limited Financing Options
There are a lot of homes in Redwood City that have been in the same family or under the same ownership for a long time. If a property is in bad shape and not considered habitable (the roof is leaking, there is foundation damage, or no working kitchen/bathroom) a buyer may not be able to get conventional financing. This limits the amount of people that can buy the property, ultimately keeping the price low due to lack of competition. If the owner of a home dies or if there isn't money to fix/update the home before putting it on the market, there may be no other option other than to list the house for sale as it is.
In most cases its 7-10 days from when a property hits the market in Redwood City to when a seller will accept an offer. There are typically multiple offers and it's not uncommon for a property to sell 10-15%+ over asking. Active agents and buyers alike are aware of the local market and are used to quickly preparing strong offers. Other parts of the Bay Area, state, and nation are different. Working with a realtor from out of the area, or someone who hasn’t been very active in the market recently, could mean that the property ends up with a listing and marketing strategy that doesn’t jive with current, local trends. In this fast-paced and competitive market it’s more important than ever to work with a local realtor who has a recent track-record in Redwood City.
Here’s a look at homes that have sold either at asking price or a little above or below in the past 30 days: