How to Create a Market Bottom in Real Estate: Part One
January 3rd, 2008 Categories: Encinitas, Real Estate News, San Diego Market Trends, San Diego Real Estate, San Marcos
There are no shortage of buyers in the San Diego real estate market, but most are sitting on the sidelines waiting for what feels like a market bottom. It is a scenario that is likely repeated in real estate markets throughout the country.
Through a process of trial and error, we have learned to attract serious and qualified buyers utilizing value range marketing, with very alluring bottom pricing. Using value range pricing, we establish a price range which will be acceptable to the seller.
Here are three recent examples:
Case One: An older 1900 square foot home in San Diegos Clairemont Mesa. The home was clean and vacant, but in dire need of updating. Other unsold homes in the neighborhood were priced in the mid $500s to low $600s. Our seller was motivated and did not wish to be bothered with updating the home We knew there would be buyers who would be happy to remodel a home to their own desires if the price were attractive enough. We priced this property with a value range of $479,000 to $525,000. Within a week we had two offers and ended up settling on a price of $465,000 in as-is condition. The buyers are delighted with their buy and the sellers is relieved to have sold her home with no required repairs.
Case Two: A home in Encinitas Ranch is rented to uncooperative tenants, who refuse to allow the home to be shown to anyone. It languished on the market at $950,000, in danger of going into foreclosure. We reduced the price to $700,000 to $800,000 and within five days had six offers. The top negotiated price is $50,000 over the high end of the range and the bank is delighted. The buyer is also ecstatic to be buying a home in upscale and coastal Encinitas Ranch at such a reasonable price and is willing to collect rent and await lease expiration in April.
Case Three: This home in Lake San Marcos gathered few lookers when priced at the high end of the market: $499,000 to $525,000. Destined to be a short sale, we slashed the price to $300,000 to $400,000 and currently have two offers in mid range with others promised in the next few days.
None of these offers come from buyers seeking 100 percent financing. All are putting down a minimum of 20 percent and a couple are all cash offers. These are serious home buyers who have been waiting for San Diego buying opportunities such as these. They are not looking at homes with yesterdays pricing; they are seeking below market pricing and the security that brings in turbulent real estate markets.
Stay tuned for Part Two, where we will reveal an innovative real estate pioneers plan to free locked-up equity in homes whose owners are wishing to move up or down in the San Diego real estate market.
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