Secret Calculation for Home Prices

Brian Ayer

Brian focuses on home sales in the mid-Peninsula and draws upon his deep market knowledge to explain value to buyers and marketing strategies to sellers. His territory from Burlingame to Palo Alto represents some of the best housing stock across an entire spectrum of prices. Brian regularly shares his insider knowledge with relocation clients who target the Peninsula/Silicon Valley, and with sellers seeking to attract the most qualified buyers. Competing and cooperating with some of the top real estate professionals in the industry, Brian has earned the respect of his colleagues because of his ethics and professional demeanor. He remains a top producing agent with Dreyfus Sotheby's International Realty and continues to grow his business through exemplary referrals from his past clients. Brian is a devoted resident of Old Redwood City, one of the most desirable neighborhoods in the entire peninsula. When not with clients, he is regularly found running through the neighborhood with his dog Coda, or in the garden. From a client: “Every couple of years you might meet a person who is exceptionally motivated, highly disciplined, and loyal. Brian is one of them.” "Brian was able to help us understand the difference between valuation and value - what the property is worth objectively, and what it is worth to us. He understood the trajectory of the market, and could really read the dynamics of where the market was going."

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A buyer client recently asked me, “What percentage or dollar amount should I add to the list price so I can figure out how much over asking a home will sell?” If only learning the secret calculation for home sales prices was that easy. The short answer: that depends. It depends on the pricing strategy of the listing agent – and if they know the market in which they are listing. It depends on the condition of the home and how much it appeals to buyers. It depends on a lot of factors for which one cannot always account.

Yes, in (most of) the rest of the country, an owner asks a price, there is an offer, sometimes some negotiation, and an agreement is finalized. But not here. Not in Silicon Valley. In the mid-Peninsula, an owner asks a price, buyers scramble to calculate how high over the price they can afford, they guess what the other competing buyers will offer, and an offer is written. Most likely that offer will be one of many, many others. Some hand-wringing takes place while you wait for a decision, and then the news – another buyer just had to have this house so they outbid you by $200k. And you were already $200k over asking.

$400k over asking?!? Yes, in this instance. In another, it was $175k. And one home that recently closed sold for $985k over asking. Yes, a WHOLE HOUSE over asking.

One of my clients actually said “I feel like I won the lottery” when our offer was accepted. They were so elated that our calculation of value won in the bidding process without feeling that we overpaid for the home. They got what they wanted, well within their comfort zone. They are now trying to publish the secret calculation.

So how do you predict the price at which you should write your purchase offer? You can’t. Instead, work with the best agent you can find, he/she studies the market and researches the activity level of that property, and you write your best offer where you feel comfortable. You present your best case, and remember that it’s not just about winning the offer, it’s also about being comfortable in that house. And if you are outbid by an overzealous buyer the first time, there will always be another property. Want the secret caculation? Let’s talk.