What’s the Right Asking Price for Your Home?

Pricing a home for sale is an inexact science — some owners might call it a crapshoot — and determining the right asking price involves both psychological and practical reasons, according to a recent article in The Wall Street Journal.

An asking price is primarily a negotiating tactic, Michael Seiler, professor of real estate and finance at The College of William & Mary, told The Wall Street Journal. “When you set a list price, you’re sending a signal to the market.”

Mike McCann, a real estate professional in Philadelphia, said in the article that most sellers overestimate the value of their home, and some real estate professionals may start with a price that’s too high to avoid hard feelings or to get the seller’s business. Or, they may price it too low for a quick sale.

Setting the right asking price depends on a variety of practical factors, such as the condition of the property and recent sales activity in the area, but pricing research offers a few tips:

Precise prices suggest you are inflexible. Setting an exact asking price — say, $795,475 — could lead buyers to believe that the price is not negotiable. A round number such as $800,000 can indicate that you’re willing to consider other offers.

A few dollars can make a big difference. Pricing a property at $499,900 rather than $500,000 can subconsciously influence a buyer. It seems to defy logic, but researchers say $499,900 is perceived as a huge bargain compared with a home priced just $100 more.

A low starting price can backfire. A lower asking price may net a flurry of offers, but it may not lead to a higher sales price. “It creates a havoc that doesn’t serve anyone well,” Rebecca Walter, a real estate professional in Portland, Ore., told The Wall Street Journal.

Pricing strategies only go so far, however. Ultimately, determining a home’s real value of requires knowledge of the local real estate market and access to recent sales data. That’s where the assistance of a local real estate professional can be most valuable.

Real estate professionals typically compile neighborhood sales data to prepare a comparative market analysis, which provides a sensible starting point for price negotiations.

Seiler, the real estate professor mentioned in the article, said that without comparable sales data, “an appraiser will have no clue what a property is worth, and a buyer wouldn’t know either.”


(Image: Flickr/OTA Photos)

Real Estate Roundup: Bay Area Home Prices Spike 33 Percent in a Year

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:

BAY AREA HOME PRICES SET JUNE RECORD
Bay Area home prices set a new record for the biggest June increase, rising 6.9 percent from May and 33.1 percent from a year earlier.

The median price paid for a home in the nine-county Bay Area last month was $555,000, the highest since December 2007 when it was $587,500, according to the research firm DataQuick. The median price was $519,000 in May and $417,000 in June 2012.

DataQuick said prices rose because of “disappearing distress sales, an improving economy, and mortgage rates that, while up off bottom, remain very low.”

The Bay Area median home price peaked at $665,000 in June and July 2007, then dropped to $290,000 in March 2009.

“We’re still bouncing off the bottom,” said DataQuick President John Walsh. “This next part of the cycle should be fairly self-adjusting: As prices go up, more homes will come on the market. Price pressures will ease.”

HOPEFUL SIGN IN INVENTORY LEVELS
The supply of homes for sale in the Bay Area remains far below year-ago levels, but the tide is slowly turning, according to the latest figures from Realtor.com.

In the San Francisco metropolitan area, the number of listings grew 3.9 percent from May to June, although June’s numbers were still down 21.7 percent from a year earlier. Oakland-area listings jumped 12.1 percent from May to June but also lagged 21.2 percent behind last year’s level.

The data showed a more pronounced spike in Southern California listings from May to June, with inventories rising by 51.5 percent in Orange County, 45.7 percent in Los Angeles, and 18.1 percent in San Diego.

BANKS MAY EASE LOAN REQUIREMENTS
The recent rise in interest rates may be a blessing in disguise for homebuyers.

A recent Inman News story noted that fewer homeowners are taking out second mortgages as higher interest rates make them less affordable, resulting in falling profits at U.S. banks. To generate more business, “banks may be more likely to extend credit to a larger swath of borrowers.”

According to Zillow senior economist Svenja Gudell,“Because refi activity is down, you have a little more room to do business with people who don’t have an 800 credit score.”

HOUSING MARKET HAS BUILDERS UPBEAT
Builders continue to feel more optimistic about the market for newly built single-family homes.

Builder confidence rose six points in July to 57, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Any number above 50 indicates more builders view conditions as good rather than poor, and July marked the index’s third consecutive monthly gain and its strongest reading since January 2006.

“Builders are seeing more motivated buyers coming through their doors as the inventory of existing homes for sale continues to tighten,” said NAHB economist David Crowe in a statement. “Meanwhile, as the infrastructure that supplies home building returns, some previously skyrocketing building material costs have begun to soften.”

(Image: Flickr/Bhautikjoshi)

San Francisco Metro Area Home-Price Increases Fall to No. 2 in Nation

After leading the U.S. in year-over-year average home-price gains in May, the San Francisco metropolitan area fell to second place in June, according to the monthly S&P/Case-Shiller report released earlier this week. Nevertheless, San Francisco was one of just two regions included in the report to post yearly increases of more than 20 percent.

The report shows that average year-over-year home prices in the San Francisco area grew by 24.5 percent since last June and now slightly trail the Las Vegas region, which showed price gains of 24.9 percent over the same period.  Other Western metropolitan areas–Los Angeles, Phoenix, and San Diego–rounded out the top five, in that order.

“The Southwest and California have consistently led the recovery, with Las Vegas, Los Angeles, Phoenix and San Francisco posting at least 15 months of gains,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices.

The Case-Shiller report also noted that San Francisco has shown the most dramatic improvement in home prices since the depths of the recession, up 47 percent since March 2009.

Though average home prices in San Francisco showed the exact same rate of yearly growth in June as they did in May, month-over-month price hikes cooled slightly, from 4.3 percent in May to 2.7 percent in June. Of the 20 U.S. metropolitan areas included in the index, San Francisco home prices experienced the fourth-largest monthly gains.

Overall, the Case-Shiller index showed year-over-year national home price gains of 10.1 percent, but according to Blitzer, the pace of growth may finally begin to slacken.

“Thirteen out of twenty cities saw their returns weaken from May to June,” stated Blitzer. “As we are in the middle of a seasonal buying period, we should expect to see the most gains.” Blitzer went on to note that rising interest rates could help to prevent home prices from seeing large increases.

Both Case-Shiller’s 20-City and 10-City composites have now returned to their spring 2004 levels but remain well below their 2006 highs.

Weird Real Estate Facts You (Probably) Never Knew: Google's Goats and More

By Courtney Craig

We bet some of this trivia about home and habitat will stun you:

1. Google rents goats to do its mowing.

Rather than use gasoline-guzzling, noisy mowers at its Mountain View, Calif., headquarters - the Googleplex -- Google has been known to keep its lawn coiffed with rent-a-goats.



Google rents goats from a cool company called California Grazing, which swears it can maneuver a herd of goats through crowded city streets. It's an eco-friendly approach to landscaping -- and you can't beat the cute factor.

2. Swedes and Danes use dead bodies to heat their homes.

It's an idea that makes a lot of sense when you think it through. Crematoriums heat up to 2,000 degrees, which can be a lot of energy going to waste -- until someone got the bright idea to pump that heat into local energy companies, where it's used to warm homes.

3. In parts of Germany and Poland, when a couple marries, guests break a whole lot of porcelain.

And leave it to the couple to clean up. They do this right in front of the bride's home, usually the night before the wedding. It's called "Polterabend" and it's meant to symbolize the struggles the new couple will face as they build a home together, with an emphasis on working together through those struggles.

If you're invited to participate, make sure you break only porcelain (old toilets welcome) and not glass, which stands for happiness, and therefore should never be broken.

4. Brass doorknobs disinfect themselves.

It's called the oligodynamic effect: The ions in the metal have a toxic effect on spores, fungi, viruses, and other germs -- eliminating the nasties within eight hours.

5. The original housewarming party was -- literally -- a housewarming.

Guests brought firewood as gifts and lit fires in all the fireplaces in the home. Obviously this warmed up the place for the family, but it was also believed to ward off evil spirits. Uninhabited homes were thought to attract roaming ghosts, so a new home would have to be rid of that bad energy before it could become a happy abode.

6. A man started with one red paper clip and traded his way to a home.

Kyle MacDonald made his first trade -- one red paperclip for a fish-shaped pen -- in July of 2005. Less than a year and several trades later, he finally traded a film role for a two-story farmhouse in Saskatchewan. Who knew that bartering could be so lucrative?



7. In Scotland, homeowners paint their front door red when they pay off their mortgage.

Throughout history, a red front door has symbolized many things - the ancient Hebrews believed it would protect firstborn children from the angel of death; in the early days of America, it meant the home was a safe place for travelers to stop for the night. And according to feng shui, a red front door invites positive energy into a home.


8. You can buy a missile silo.

The most popular use is to turn the old silo into a home. It might be an ugly home, but a little nonconformity never hurt anyone. (P.S. AOL Real Estate was on this one long ago. See our video of the home here.)

9. There's a chain of bathroom-themed restaurants.

At Modern Toilet, a restaurant chain based in Taiwan, patrons sit on toilets, sip soup from sinks, and wipe their mouths with toilet paper. While the latrines aren't functional (except in the actual bathroom, we hope), you'll certainly have something to talk about until the food comes.

10. Here's a house you wish you grew up in: The slide house.

The slide goes down one side of the 3-story Nakameguro house, while a staircase on the other side lets you climb back up. If that's not enough of a dream-come-true for kids, the house also features a ball pit! (P.S. AOL Real Estate knows of another slide home. See it here.)


11. There's a garden in England dedicated entirely to plants that can kill you.

And apparently, it's kid-inspired, too. Alnwick Garden's founder, the Duchess of Northumberland, said:

"I wondered why so many gardens around the world focused on the healing power of plants rather than their ability to kill.... I felt that most children I knew would be more interested in hearing how a plant killed, how long it would take you to die if you ate it, and how gruesome and painful the death might be."

No wonder it's nicknamed "The Poison Garden." It features 100 famous killers such as hemlock (which killed Socrates), strychnine, and nightshade.

12. According to an old superstition, if a bird flies into a home, death is soon to follow.

Long before "put a bird on it" became hipster decor, birds were thought to symbolize imminent death for the home's occupants. People have long connected birds to the spirit world, and it's evident in our culture -- just think of Edgar Allen Poe's poem "The Raven" and Alfred Hitchcock's movie "The Birds."

13. There's a house that levitates.

A Japanese company has developed a residential earthquake-proofing system that raises a house off of its foundation as far as 3 centimeters using just air pressure.

When an earthquake hits, compressors activate, forcing an immense amount of air under the home. The house will levitate there until the earthquake ends, then be placed gently back on the foundation.

14. The people of Easter Island have a word, "tingo," which literally means "to take objects one desires from the house of a friend by gradually borrowing all of them until there's nothing left."

We suspect they may not stay friends for long.



This story originally appeared on HouseLogic.

http://realestate.aol.com/blog/2012/08/07/weird-real-estate-facts-you-probably-never-knew-googles-goat?ncid=edlinkusreal00000001&ts=1375727018