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Should You Price Your Home Under Market Value to Create Multiple Offers?

Many homes priced below market value are creating frenzy of multiple offers. Could this strategy backfire?

Let's say your home is comparable to others in your neighborhood that are in the 900K range. Your Realtor suggested to list the home in the low 800K range to "create excitement", what would you do?

Could this strategy do more harm than good? Lets just say a potential buyer is searching for a home and sees the perfect home at the price range she can afford. Her Realtor tries to explain the under market value ploy to encourage multiple offers. Wouldn't you as a buyer be a little ticked off? 

What if NO offers came in and this buyer offered the exact asking price? Doesn't the seller HAVE to accept the offer? That is one question I never want to have to answer.

I'm not as brave as some of my colleagues, my thoughts are to price a home AT market value, not under value. With inventory at an all time low and multiple offers are the norm,  it's frustrating for buyers to have to compete with over bidding. Isn't that how we got into trouble a few years back?

A town home in Foster City was priced a market value and sold quickly. In San Mateo  a condo was priced at market value and received 9 offers.

My feelings about pricing a home is to price it correctly and it will sell.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Michael Talis May 30, 2012 at 06:58 AM
The listing price to me is a marketing tool that helps achieve my clients' goals. With current instabilities in the economy the confidence in the market place can shift overnight and change the perceived property values really fast. After the early spring feeding frenzy, I see a number of homes in the area reducing prices after only one weekend of open houses.
Phyllis McArthur May 30, 2012 at 01:59 PM
thanks for your comment, Micheal, Foster City thankfully, has held it's value. I just listed a home here and will have it ready in about a week, owner was horrified at the thought of under pricing.

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