How Sellers Price Their Cabin In Big Bear

One of the most commonly asked questions that I am asked when showing property in Big Bear is, how much should I offer? Is there a set rule that says I should offer 30% less than the asking price?

This is an excellent question and it is also a difficult question to answer. The reason I say this is because if you haven't gone through the education phase of looking at homes, you're not going to have any idea what a good value is. When you review 30 to 50 listings on line, drive by 10-20 of them, and then look at 5-10, you will recognize the cabins that stand out as a great value. You'll also recognize the cabins that stand out as being anything but a deal. Seller's price their homes differently reasons. Let's take a look at some of them.

1. Ridiculously Overpriced Big Bear Cabin!

In this case, the sellers have listened to a real estate agent over price the home in an effort to obtain a listing. There are sellers out there who choose their listing agent solely on what agent will quote them the highest price. I have been on many of those types of listing appointments and I walk away if I can't get the listing at a price that will sell. This type of seller doesn't want to hear about your marketing strategy, all they want to hear is what you think the house will sell for. If that price is high enough, they'll talk to you. If you are not quoting the highest price, then they want you out if there as quickly as possible. Even here in Big Bear, there are real estate agents who give the seller a high "value" in an effort to obtain the listing. These homes can easily be 10-20% overpriced and they won't sell. Some sellers figure it out in a month while it takes other buyers much longer to figure out why their home isn't selling. The longer an overpriced home is for sale, the less it is worth. In time, the seller will see that other homes are selling and start asking himself why his home isn't selling.

2. The Big Bear Cabin That Is A Little Overpriced!

These sellers fall into 2 categories:

1) There is the seller that feels their home is worth every penny of their asking price. I have run into this group of sellers here in Big Bear. They listen to you as you explain the value of their home, yet they aren't quite prepared to accept the price. The normal response on the price is "Let's Give It a Try" This is not a market to "Give It a Try"

2) Then you have the seller that want to leave a little room to negotiate. We all know that most offers that are presented in today's market are low. So, it is not surprising that sellers want to pad their asking price a little bit. But this strategy can hurt you more than it helps. The reason I say this is that in the current market, the longer the home sits, the less it is going to be worth. Because of this simple fact, the goal should be to price the cabin to sell. You don't want to be one of the many who have priced their cabin so that it sits on the market and depreciates.

These homes can be 4-10% overpriced. Perhaps 75% of all homes for sale are priced in this range.

3. Priced At Fair Market Value

Some sellers carefully and realistically studied the local Big Bear real estate market and they know what other homes in their area sold for. These sellers have priced their homes with the knowledge that they need to compete with the bank owned properties if they are going to sell their home. These homes usually sell within 4 weeks at or very near the asking price.

4. Priced Below Fair Market Value

There are some cabins in Big Bear that are priced far below the market price. In most of these cases, these listings are bank owned properties or sellers who need to sell the home as quickly as possible. The bank may wish to unload their properties quickly as they have a large inventory of homes. They know that the best way to decrease their inventory is to list these homes below the market value. In some cases, the real estate agent made a mistake and recommended too low of a price to the seller. Whatever the reason, these homes usually sell within 7-10 days. These cabins usually have multiple offers and sells for asking price or more.

Summary

If you listen to the evening news, you hear nothing but bad news about the economy and you hear that no one is lending. Yet, with all of this bad news, the buyers are still coming to Big Bear to buy cabins. These buyers are taking advantage of the current market conditions and are buying cabins in Big Bear at sometimes fifty cents on the dollar. Now, the sellers who understand that price will overcome any objection and is prepared to compete with the bank owned properties will sell his cabin. The seller who owes more on his cabin than it is worth is going to have a difficult time selling it. He is not going to be able to reduce his price to where it is going to need to be to sell. The advice that I give potential sellers when I go out and meet them is that if they don't have to sell, if they can wait it out or a couple of more years, then don't sell. But if you must sell, then price the cabin so that it is competitive with the bank owned properties.

As always, if you own property in Big Bear and have been thinking of selling it, please get in touch with me. If you are a buyer who has always wanted a cabin in Big Bear and have held off until the prices come down, your time has come. If you're tired of the roller coaster ride of the stock market and want to invest some money in real estate, let's talk.