Often, buyers ask us: how do we know how much over the listing price a house will go for?
And while we can never know for sure, our common refrain is this: there are micro market averages, but there are also listing agent norms.
Meaning, the list price often has more to do with who listed it than the house itself. Let me explain.
Listing agents… we all have styles. We gravitate toward certain paint colors, stagers, and yes, even pricing strategies. Some agents have had a lot of success listing consistently low, sometimes dramatically low, while others are more conservative. When we see a house listed by an agent or team that typically fetches 40% over asking, we mentally add 40% to their new listing.
But why do this in the first place? Glad you asked. This is where my other love comes in: marketing.
In traditional marketing, there’s a concept called the funnel. A wide opening at the top to capture as many leads as possible, narrowing down to the one who converts. In real estate, sellers don’t want one great offer. They want a room full of them. So we price low to widen the funnel, flood the top with eyeballs, and let the market do what markets do.
Does this feel like a nightmare for buyers? Yes. (And for their agents too. We won’t pretend otherwise.) But flip the script for a moment. If you’re the seller, or the agent representing one, your job is to get the best possible price. Pricing high and “waiting for the right offer” is often the riskier move. Price too high, and buyers assume you want even more and quietly move on.
It’s also worth noting that most other markets don’t underprice this aggressively. You don’t see it as much in Marin, Sonoma, San Francisco, or even through the tunnel in Walnut Creek and Lamorinda.
But in Berkeley and the surrounding neighborhoods, a handful of top agents have set a pattern that’s pretty entrenched. For now, we’re all playing the game.
Now, for the armchair enthusiasts in the back, here’s your insider nugget:
Not every house is priced this way. Every so often, a listing hits the market from an agent who doesn’t work this quirky little pocket often, or from a seller who got cold feet on the strategy. The result is a more transparent price, sometimes with a willingness to accept an offer at any time. No circus, no bidding war, no adrenaline hangover.
We know it’s incredibly hard to decode the “real price” without someone on your side. Truthfully, this is one of the most important parts of our job, helping you make sense of it all. It can feel like a shock at first, but there is a method to it.
If you’ve been scrolling Zillow and are ready for the cheat code, our inbox is open. [email protected]