Buyers often comment that it’s very hard to figure out the price at which a home should sell in Sewickley. The North Hills are far more predictable, with sales prices normally at or above 95% of asking price. But in Sewickley, realizations can be far lower. Over the last two years, for example, the overwhelming majority of homes sold outside of Sewickley Village that were priced in excess of $1,250,000 sold with reductions ranging from $150,000 – $650,000. Given that huge spread, it is very difficult for listing agents to price homes. Many agents have a very good sense of the likely sales price of a home – but they must leave room for expected negotiations – and how much room should one leave? This is a strategic decision that varies by agent, making it almost impossible for buyers to navigate the market, nevermind feel good about value.
What makes the task of understanding value particularly difficult for a buyer is that there are as many different approaches to pricing as there are agents pricing homes. Some agents approach value as an appraiser would, price within a 10% band of expected realization, and don’t accept listings from sellers whose personal goals exceed the realities of our market. Those agents are often rejected by potential sellers for providing listing prices that seem to be too low. Other agents prefer a softer approach – test the market – some for longer than others. In the end, the seller will never realize more than the market is willing to bear, but it can, sometimes, take agents years of gently coaxing their sellers down to the realities of our marketplace if its not what the seller wants to hear.
Depending on which agent the seller chooses to list with and the strategy adopted, the home could sell immediately for 100% of asking or take a couple of years and sell for less than half of original asking price. For buyers, this makes for a tricky and frustrating marketplace. You may be fortunate and find a home that the seller has had independently appraised (separate from a refinance), and that will provide you with a more certain assessment of value. Aside from that, you will need to do your own homework and look at historic trends for each listing agent to determine what the likely realization on a particular listing will be… or hire a buyers agent (like me) who will do that for you!