I did an interior BPO a week or two ago on a rural property out in a kind of exclusive part of Santa Cruz county. None of the homes are alike, the parcel sizes and qualities are all different, the houses range from brand new estate-type properties to...well, older estate-type properties. There are probably a few normal houses thrown in here and there, tucked away behind different hills and knolls.
One thing I sure hate to do is tell a client the asset is worth more than it is. Hate it. So I spent a long time on that BPO, weighing various factors, and came up with a price that I was sure it would sell by in 30 days. This is in a very desirable area, where there have not been any REOs in recent memory.
The listing hit the streets today (not mine): $100,000 lower than what I said in my BPO. Yowza. That ought to sell in a matter of days. I expect I'll see it 'pending' here by this time next week, unless they get multiple offers (very possible) and the process drags on a bit.
But it's a point well taken. I have another REO listing - big, beautiful, 5-year old house, the kind that everyone in town wants to buy (if they can afford it). I listed it based on the active comps and recent solds - lower than all the active comps, lower than all the recent solds (most of them also REOs - or short sales). Actually, lower than all solds for all time in that subdivision.
And then, one after another, new REOs came on up and under-cut my asking price by 10%. And they went into escrow, blip blip blip. And then the short sales in the neighborhood dropped their price. And now, suddenly, in a matter of 3 weeks, the listing goes from the best priced in the neighborhood to practically the highest priced.
The lesson here? Get super aggressive with the pricing. The asset manager sets the price, anyway - better to price it a little low then to risk getting stuck with a listing that can turn out to be priced too high and have everyone beat you on a race to the bottom.