By Mark Penn
I had lunch today with eight other agents from around the Bay Area. We were all singing the same songs: “If only I had more properties to sell…” and “Where are all the listings?” In just a couple of years, most of the Bay Area markets have gone from far too many properties on the market, at rock bottom prices, to the present condition of near-starvation. An agent in my office has buyers who were just recently the “winners” on a property that commanded 32 offers. One of my lunch buddies today told us that he had over 60 offers on one listing. While those examples may be somewhat extreme, they are indicative of the rule and not the exception on properties that are appealing to buyers and priced aggressively. Marin County reports a decrease in inventory of 70% over the same period last year, and one office in SF has experienced an astonishing 100% of their contracts as being in multiple offer situations.
Last month, I wrote about dealing with multiple offers from the buyers’ perspective, and kicked around some general strategies about how buyers might construct offers when there is competition for the same property. Now – let’s turn the tables and look at this from the sellers’ point of view.
First of all, we are in a window of great potential for sellers. There’s not a lot out there on the market, and that translates to less competition between sellers who are currently marketing their properties. Less competition means you can be a little more demanding in the terms (yes, that includes price), which the lucky buyer must fulfill. Prices are up in almost all Bay Area markets. In fact, the March statistics show a 33% increase in Bay Area single-family-home median prices. This will undoubtedly level off—of course, we don’t know when. But, as my manager says, “While we don’t know what will happen next month, we DO know what’s happening today.”
So it sounds pretty good, doesn’t it? What’s the downside? Well, for one thing, it’s safe to say that it’s rarely “fun” to sell your house. Even the best listing agents will still have to make some demands on you and your family that might make you squirm a little, in terms of preparing your home, how it should be shown to potential buyers, etc., and you should be prepared to swallow the “reality” pill. Just because the market is favoring sellers, it’s still critical to be realistic, even aggressive, in establishing your list price.
This “sellers’ market” is still highly price sensitive throughout the Bay Area. A competitive list price will produce competitive buyers. An inflated or unrealistic list price will produce a haze around your property that will make it almost invisible. And yes, in most cases, you should expect your agent to make some suggestions that will help your home “show” better and entice buyers into that multiple offer frenzy. A property’s “blemish,” which may be something that you lived with for years, might be enough to keep buyers at bay with no offers in sight. And lastly, LISTEN to your agent when they give you all that advice, even if it pains you. He or she will give you the professional guidance that will get your home sold.
A Bay Area native, Mark Penn has been a REALTOR® with Coldwell Banker since 2004. He is also active in animal welfare, and is a former educator, facilitator, and air traffic controller. Mark can be reached at mark@MyHomeInSonoma.com.
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