A home in Oakville, California was originally listed for $1 million. When no buyers were taking the offer, the price was dropped to $1 in the hopes of fomenting a bidding war.
All the owners got, however, were even weaker offers and claims of false advertising – effectively forcing them to take the property off the market.
Legality aside, the concept (of $1 real estate listings) was doomed to fail from the very beginning. Mark Weisleder, real estate lawyer, says that many prospective buyers do not even take these $1 listings seriously.
He goes on to cite the importance of proper pricing in order to attract potential buyers. “Testing” the market with an overpriced listing will drive away buyers while making other cheaper but comparable properties more attractive.
Under-pricing a home, however, will not automatically mean that more people will be interested. Buyers, agents and brokers are more likely to become suspicious with grossly undervalued property; fearing that something is wrong with the house for it to be so grossly underpriced.
A value between the fair market value of the property and five percent below that level will appeal to the widest number of prospective buyers, Weisleder says. Being open and honest will make it easier to find and work with serious buyers, he adds.