When home prices are going up, and going up fast, you should be concerned about under pricing your home. Boston real estate prices have been coming out of the slump, most prominently in the last few months. And as more sellers are getting ready to finally sell, under pricing can be a problem.
It is hard to imagine discussing the danger of under pricing just a couple months ago. But then I saw it done to a condo in Brighton. The condo, two bedrooms plus parking in an excellent building in Cleveland Circle, was barely on market before the seller accepted an offer. Because it didn’t close, I don’t know the final sale price yet.
I am so sure this condo was under priced because two comparable condos were off market just as fast, even though they were priced 30K more – about 10%.
There are two reasons the condo could have been deliberately under priced. First, the seller may have been under duress to sell quickly. Second, the seller may have been advised an under-pricing strategy to encourage multiple offers and thus have higher bids.
I don’t know the seller’s motivation, frankly. But I speculate a third reason the condo was under-priced – lack of knowledge on current market conditions. Brighton condos have been flying off market as first time home buyers are ready to buy, and there is very little inventory. The fast turnaround limits an agent’s ability to price accurately on recent sales.
The only way for an agent to know about this market pressure it to go to the jam-packed open houses with buyers writing offers on the steps of buildings. If the agent didn’t come to see Brighton condos in open houses in the past two months, accurate pricing would be almost impossible.
I hope, and expect, the condo sold well over asking. I’ll keep you posted.