Is listing price important? Episode #198

Todd: Hello! Welcome to Todd Miller TV. Joined here today with Oana, and Oana so I have a question that/it’s a misconception out there, What List Price really means? What is List Price? What does it mean?
Oana: List price is an invitation to make an offer.
Todd: Okay. An invitation to make an offer. So, tell me about the consequences of List price not matching market value.
Oana: Well, a low less price means it’s going to invite a lot of offers. And that the property is going to sell for more than the asking price. And were seeing that a lot right now. The Las Vegas value due to dwindling inventory.
Todd: Okay.
Oana: A high List Price means that, either you’re not going to get any offers, or you’re going to get some unrealistic offers versus the list price. You’re going to have some low-blow offers.
Todd: Okay. Alright. So, let’s talk about perception and I’ll give you an example: Some people in some cultures, when they see that price, they can’t ever pay what’s asking, because in their culture, everything’s over priced, and this is some countries you go there, everything is overpriced. So whatever is being asked for, you have to offer less because everyone know you can never pay what the asking price is. You have to like feel like you got a deal on it. So I’m gonna give you an example: This is how a lot of people work that I see, the asking price is 110,000, the actual market value is 105,000. So they get/or 100,000. So they get for 105, they feel they got a deal, because they got it for less than what was asking. And now a lot of people have that perception.
Oana: Well, the answer to that is an old answer.
Todd: Okay.
Oana: When in Rome, do as the Romans do. When you’re in Las Vegas and this present Real Estate market, where we have dwindling inventory, and we have multiple offers, then you have to offer what the property is worth to you. And a lot of times that means List Price are over less price because properties are well priced. We are seeing some increases in values in certain zip codes, in certain areas, and just over all, with the dwindling inventory, there is more demand and you’re going to have to compete with other people to purchase a property and you’re going to have to compete on price, primarily. And also sometimes on terms. So yes, sometimes you’re going to have to pay 5-$10,000 more that the List price and pay cash in order to get it. And that’s just a fact of life. And we’re seeing that all the time. Anywhere from $80,000 properties selling for $90,000, to properties that are going or $160,000 and selling for $180,000. I mean, it is happening all o0ver the market right now and it’s very rapid. Las Vegas right now is an incredibly fast Real Estate Market. We went up fast, we came down fast, we’re going back up fast.
Todd: Okay.
Oana: It is fast! And you have to know what you’re doing and that’s where Real Estate professional is key. They have to have their thumb on the post of what’s going on the market which is changing literally daily.
Todd: Okay. Do the banks typically, do some banks tend to list over list price, do some tend to go under list price, I mean how do you see that market value versus list price based on banks?
Oana: You know, it is! It’s definitely client specific.
Todd: Okay.
Oana: Definitely client specific. I mean, there are clients out there that will/that have other restrictions. So for example, if the home that we’re talking about maybe subject to reverse mortgage, and it’s a HUD home, and odd month even here with the full moon kind of thing, it has specific qualifications. And sometimes those properties are priced high for the market. And they can’t take anything less than asking price for the first so many days and that sort of thing. So there are particular things. So, each property is unique but if we were talking about the market as a body and what’s happening out there now, then yes! We are looking at buyers having to pay more than list price and pay cash to get properties.
Todd: What do you think the best strategy is for a seller to list below, above or at market value?
Oana: If we’re talking about the Las Vegas Market, and again I go back
Todd: Las Vegas.
Oana: Because you mentioned different cultural issues. And the culture in Las Vegas is that you price your property at market value. That’s where you’re going to maximize your/ that’s where you’re going to maximize the amount of money you’re going to get for the house and it will sell in the shortest amount of time. And that, that is key. Because the longer the property is on the market, the less that property will bring that seller. Because buyer’s will think there’s something wrong with the property, and the longer it sits on the market the more they will discount it.
Todd: Okay. What do you/what’s your advise for buyer out there who’s running into this issue of “Over paying” if they have to go above the list price?
Oana: They’re not over paying. That’s the short answer. They are not over paying. Look, prices are at historic loads, you can’t build for what you’re paying for a house now. So you’re not over paying.
Todd: So if a house is worth $300,000 five years ago, it’s listed for $80,000 today, and you have to/ that’s the list, what/how far they picked that number and you end up getting for $85,000 or $90,000 it’s still probably a smokin’ deal or is that like what your thought?
Oana: Exactly! You cannot build that house for what you’re buying it. So if you can’t build it for what you’re buying it, the you’re doing great. Real Estate is not a, it’s not like you’re buying something that you’re going to be able to sell tomorrow. Okay?
Todd: Right.
Oana: Real Estate is a long term approach and the idea is that these homes are historic loads right now and that 5 years from now or 10 years form now, this house will be, will appreciate substantially and that’s where you’re going to see your profit. If you’re looking to buy a house today and flip it tomorrow, you know, Real Estate is not the place you should be.
Todd: Good. Thank you very much.
Oana: You’re welcome.
Todd: Well, so I just wanna share my philosophy, Oana’s philosophy on List price. Oana listed probably what, 400 home last year?
Oana: Yes.
Todd: You have a really good idea for what list price means, what market value is, and how to deal with the differences between the 2. But I agree with you completely, I’m saying prices starts to increase, our clients are having to pay more and more as they buy houses in certain neighborhoods. And I predicted it about 6 months ago that by now in the Spring we would start to see prices go up, despite people that reported saying that they would go down 20-30%. So I think, I would say I was more accurate on that count than they were.
Oana: Yep.
Todd: So, anyway, that is my update for today and hope to see you on another video. Thanks!