Original question: What would you advise these sellers to do?

Suggestion: Make a counteroffer to the people that have made an offer. I'm serious. How under priced is this unit?

If there is no reason it is listed low, except to generate multiple offers, then price it at its value so the market responds accordingly.

I'm a Realtor. I have seen this under pricing strategy work and I have seen it backfire. The question most buyers ask is the one you mention: what's wrong with the house/property? Naturally I explain that the idea is to get multiple offers over the list price and a surprising number of buyers just don't want to get into a bidding war. That is the terminology they use: "bidding war".

Sounds like the strategy is not working in your neighborhood. The agent and the seller need to reassess their selling strategy and re-price accordingly.

I have a question: is the 10% off of actual market value or 10% less than what the seller thinks it should sell for based on the changes/improvements made to the property? The answer to this makes a difference. A new roof isn't an improvement. It is supposed to come with a functional roof. That is a maintenance item, not a capital improvement. Same theory with the furnace. Appliances depend on your customs in the neighborhood.

You're welcome. There is nothing wrong with increasing the price to market value. Especially if you have appraisals and comps to support it. I see it in our MLS frequently.

Interested to see how this turns out.

What completely bizarre advice to underprice a newly updated house in a hot neighborhood. If the neighborhood is hot and the home truly maintained, you can generate a good bidding war listing it at a competitive price.

Buying a house is seldom fun (lots of money on the line), and when it looks like it might transition into an auction or flea market format (a bidding war), I believe many buyers just don't want that kind of conflict. They already feel uncomfortable about making the biggest purchase of their life, and now its going to be a direct competition with a bunch of other buyers. Time sensitive haggling is not a comfortable buying process for most Americans.

Bruce

Not something I would ever agree to. Just price the house what is fair for the area it is in. Forget all this under pricing silliness. That realtor has cost the owners valuable time and potential buyers.

Quit playing games. Take it off the market, then relist for a higher price consistent with other properties in the area.

Take it off the market and re-list at the prices the other four townhouses have sold for. In some areas, just painting and re-staging with new professional photos is enough to justify being re-listed at a higher price. "New paint" will get a new crop of buyers in.

Too bad the pricing history will be there for all to see.

This is such a bad idea. IF a realtor under prices a home and only one offer comes in at the asking price, the seller could be sued for specific performance. A ready, willing and able buyer was found for their asking price. This seller is very lucky the buyer came in under the asking price. Now, they can counter at whatever they want. Counter with market value! If that buyer doesnt accept the offer. Pull the listing and re list at the higher price.

I don't know why everyone is saying to pull the listing. It is simply a price adjustment to the market pricing. The history shows anyway as ncrealestateguy points out. The history shows in the MLS and on Zillow and a few other websites. Address the pricing strategy by increasing it now. Pulling the listing isn't going to erase the history. Having a gap between listings isn't going to erase the history. The only reason to pull the listing is to move it from one agent to another because you have lost confidence in the current agent.

Like a lot of posts in forums like these, I can bet that there is more to this story not being completely told to us.

Yes, some buyers do not want to get into a multiple offer situation, but out of those 9 showings, if the price is actually WAY lower than market price, someone would have offered on it by now.

I have a hunch the problem is not the asking price.

There was one posted a year or so ago in a town just outside Atlanta. They couldn't understand why the house hadn't sold. They included a link to the listing (one not posted for this one). It looked fine on the listing. When you googled the address, you could see how close the train tracks were to the house.

Good points about seeing if we have the whole story. It would be great if the OP could post a link with the address and/or the listing....

I find it hard to believe that 9++ parties are so opposed to a bidding contest or suspect "something's wrong" that they pass on a house they REALLY want. This realtor called "many" of the other realtors....2, 3, 4?? I doubt he called 9 or so. Is this realtor someone you know or are you friends with the sellers or is this info third hand? There's so much that doesn't sound right.

You mentioned as a plus it's being next to a national park. This isn't always a positive as the "night life"/ drug use can be an issue in parks these days...depends upon the type of park etc. I personally have passed on 2 homes in the past that abutted parks...very nice parks but I don't want that exposure. This might be part of the problem.

Let's see a link to the property?? As many have said, there would seem to be something else going on here. Too many people have looked at the house to not have ONE offer at list...esp if it's an updated home in a great location.

I still can't figure out for whom the OP is inquiring. If it's not your own property, or a sale/buy you are involved in- can affect change- what is the point?

Thanks for the update. You're in a tough spot, but appreciate your sharing.

Yeah there you go - fun and games. Reminds me of why I got tired of E-bay. Just tell me what the frikkin price is and then Ill decide if I want to pay it or not.

I don’t get why people freak out about a bidding war. I would figure out what I think the house was actually worth as well as what my top price I’d be willing to pay and wade in. It’s not like you are actually at war lol. It’s phone calls. If my max amount was surpassed then so be it.

I have a few friends who got into bidding wars and lost, only to have the winning bid fall through. Then they got a call and were able to renegotiate and had a great outcome. If they hadn’t gotten in the fray to begin with they would have missed out.

^This is the right attitude. Keeps you from paying too much (usually).

ncrealestateguy-

The strategy is called "snatching defeat from the jaws of victory"... ;-)

"They had an offer from another person at the asking price and countered about $10K more..."

I think that might be just about the most bird-brained negotiating strategy I've ever heard - who does that?!? Fun and games is right...

One of the reasons people don't like bidding wars is that even if their offer gets chosen, if something turns up in the inspection and the owner often won't negotiate to have it fixed. The owner figures there are other people that will buy the house without the repair. Sometimes that is true, sometimes the potential buyers have already found other homes or think there must be something wrong with the one that is now being offered again and no longer are as interested. If the people with the originally accepted offer don't have a lot of wiggle room financially, or time wise, bidding wars can cause them to miss out on other homes that are available.

Either they or their realtor has watched too much HGTV.

Ok, walk me through this like I'm slow.

Sellers have a home worth between $850K - $975K they want to sell.

Sellers under priced their home by about 10% (actually more since "improvements" are done), hoping for multiple offers.

Sellers get a full price offer and, strangely, counter at $10K over list. Not $85K over list. Not $97K over list.

$10K represents just over 1% of the listing price. The home is allegedly under priced by more than 10%. So the sellers actually countered their own price by just over 1%. Why bother?

Instead of realizing the enormous deal they just got, the potential buyers got spooked by a dip in the stock market and conditions that favor higher interest rates, neither of which is rational or even realistic.

What am I missing?

Patrick-

I walk into the car dealer and he has a car listed at a guaranteed price that I think is a good deal. I offer to buy it for the guaranteed price and he says: Ok, but I want another $1000. I walk out....

So why did they not just accept the offer and then they are done OR if they absolutely wanted offer plus 10% did they not price it at that to start with?

Spooked was a nice way of saying you are crazy and we want nothing to do with you. Your house is not the only one for sale and we think we can find a less flaky seller.

Kudzu9 - I'd scratch my head, too.

But all the other houses, similar to this one but not as nice, sold for more. And it's allegedly under priced by at least 10%, so upon closing I immediately have equity of $75K to $85K in a hot neighborhood in a great home in a seller's market.

Assuming we know all the facts, those buyers are just as whack as the sellers. But it's their money, so....

I'm not really curious about the buyers because it makes zero sense. I'm more interested in the sellers countering with a dollar amount that equals about 1% of the listing price.

The sellers look foolish and the realtor looks incompetent. There's nothing "good faith" about that counter offer. Someone is getting or giving very bad advice.

The realtor needs to be fired. The first mistake was misjudging the market. Barring a specific clause in the contract the sellers could have been sued. The second mistake was that game playing counter offer he or she signed off on.

If your house is underpriced, the market will tell you.

We probably dont have the whole story.

Yes, but the fear of bidding wars is real. My dad's home had 5 buyers all interested in making an offer. When the agent told their agents about the multiple interest, 4 of the 5 walked. And the house was priced appropriately. Something $75-100k underpriced would make me wonder what was wrong. Especially in a time where homes are improved for flipping rather than living. Those improvements may be suspect and buyers wonder what they are hiding or what corners were cut -- how much it will cost them down the road.

As a buyer, if one house in a hot neighborhood was priced significantly lower than all the others, I'd wonder what was wrong with it. I'd still look at it, but with a constant eye to what's wrong that's keeping the price down.

If I made an offer on a house and the sellers countered with a number higher than their listing price, I'd walk because I'd feel like they were not negotiating in good faith. If the sellers aren't even willing to accept their own listing price, then what are they even doing?

I can't imagine why the realtor didn't price the home in line with the others in the neighborhood. If the neighborhood is so hot that there's a possibility of a bidding war, then there will either be one or there won't. But to price the house below what you're willing to accept is just foolish. Honestly, I'd find a new realtor.

I agree that there may be something going on with this particular house. That said, I have just moved to an area where offers over listing price are common. I moved from an area where they are not. On the house I just sold I received a full price offer before my house was publicly listed. In that area for me to have then asked for more would have been a very odd thing to do. The buyer would have been justifiably puzzled and irritated.

On the other hand, I am currently under contract on a house where I am paying over listing price. In fact, my initial offer was over listing price because I knew I wasn't getting it at listing price. Having been looking for a house for a few weeks by the time I offered on this house I knew the market. Sometimes, I did feel houses were priced close to market value, sometimes overpriced. But, if a house was updated and in a certain area and had a "great" price then it was obvious that the sellers were hoping to get multiple offers above listing price. And, that did work. There were a couple of houses that we chose not to offer on where I know the house got multiple offers. I will say that in those instances I did consider the fact that I didn't think I could buy the house for close to listing price and I felt what it would ultimately go for was more than what I wanted to pay. It wasn't so much that I wasn't willing to go above listing price...I just wasn't willing to offer what I thought it would take to get those houses.

I don't feel that the houses that I saw that went for more than listing price were necessarily priced far below the value of the house. I do think that the sellers expected to get offers above listing price. There may be times when that expectation isn't met. And, if the house receives only one offer at the listing price then maybe the house isn't really worth more. Houses that stay on the market more than a week usually are overpriced. Typically these are houses that need more remodeling and aren't as updated and move in ready.

When you expect to get offers over asking, the pricing is usually a bit low -- $10-20, maybe $25-30K -- a few percentage points and within the range of a selling price. When you go too low, you risk looking like a problem house.

There is also the possibility that all these upgrades and updates didn't add value. Poor choices or very personal choices can be a negative on a selling price.

While I agree with your point that too personal of upgrades and updates will negatively affect a selling price, I don't see any reason to price a property below asking price as much as you say, especially in a hot market. IME, most highest and best multiple offer bids are usually just slightly over the asking price. When pricing a property too low below market rate, the highest and best offer may well still be below fair market value.

Price it fairly, market it aggressively, and use stall tactics if needed.

Well, we dont know if this is Los Angeles or somewhere else. All we know is its a "big city" that aparently has a national park in it. Maybe Canada? Who knows.

The OP is long gone. Wish we knew the outcome!

ncrealestate -- If you were replying to my post, I am not saying anyone should price below well below market. I'm saying that even in a hot market where homes go over asking, this house, from what we do know and not taking into account what we don't know, would seem to be priced far enough below to look like there is a reason -- whether it be deferred maintenance, bad or chopped up floor plan or overly personal choices in finishes other than paint. Paint doesn't get that expensive.

I'm agreeing with the crowd -- we don't know the home's location or condition, but it would seem the realtor either missed the mark or there is something the HO and OP are not being honest with themselves about the condition of the home. Even if the realtor missed the mark and priced low in a hot market that has jumped since last selling season, it might not be the first house to sell, but someone smart would come along and see the value and snap it up. Either way, time will tell. Even if the OP doesn't tell us.

Sorry for misreading your post, lascatx. I agree with your last post. There is more to the story.