Selling a home in Carmel or Pebble Beach California can be challenging for a number of reasons, not least of which, this is a discretionary market:No one is ever forced to move here. There aren’t companies sending employees here or demanding that people live here to work for them. Many of the homes in our area are second homes.
How Most Home Buyers Approach Carmel and Pebble Beach
Proper pricing of a Carmel or Pebble Beach home is even more important because of the way most buyers enter the market. While it is dangerous to describe anyone as “typical” there are a few commonalities amongst the majority of buyers in our area.
- They have been here in the past on vacation, to visit a friend, attend a wedding etc.
- During their visit they started thinking about how great it would be to live here full time or own a second home.
- Maybe during that visit, or follow on visits, they picked up magazines, attended a few open houses and started to explore the different neighborhoods and communities.
- Eventually that process (which can take years) lead them to get more serious about looking for a home.
- And then on their next trip, they dedicated a day or two to work with a Realtor and tour homes with the intent of finding a home and making an offer.
This is where the seller’s pricing decision impacts the buyer.
- Very few buyers have the luxury to spend endless days looking at homes. They quickly (hopefully working with a Realtor…such as myself) reduce the list to between five and ten homes to tour and consider.
- If a home is not correctly priced it won’t make the initial cut!
- I cannot stress the importance of this fact. If a Realtor has a client in town for a day they will select properties where they expect there is a reasonable chance for a meeting of the minds between their buyer….and you.
- If you are listed at well above market value and they have no way of knowing what offer you might entertain, what are the odds that they will spend their limited time showing your home to a prospective buyer?
- Furthermore, even if a Realtor suggests an overpriced home many buyers will strike it from the list with the same logic as above. Why invest the energy in looking at a property that is priced well above what I am willing to pay for it?
There are lots of different ways to depict this reality graphically.
Half way up the pyramid is the “Market Value” line. As your price moves above this market value, you attract much smaller percentages of prospective buyers, greatly reducing the chance of a sale. Conversely, as you move below market value, you attract a larger percentage of potential buyers.
I realize this may sound theoretical but it is confirmed time and again in national pricing surveys and experience in our local market. My next post will look at a snapshot of sold homes in the last 60 days…..and you will see that there is a real world consequence of pricing in terms of days on market and ultimate sale price.
