This week, I’ve got my eye on a jaw-dropping Spanish-style home that just hit the market in one of Silver Lake’s most sought-after neighborhoods. Listed at $995,000, this beauty is bound to turn heads. It’s not my listing, but I can already tell it’s going to be the talk of the town. My guess? This home will rack up at least 18 offers. What’s your prediction?

This got me thinking about a question I often hear: Why do listing agents price homes below market value? Here’s the scoop:

The Official Answer: It’s All About the Market

Many agents price homes slightly below market value because, let’s face it, no one has a crystal ball to predict the exact final sales price. Agents typically have a range in mind, but it’s the buyers who ultimately dictate the market value. By pricing a home a bit lower, the goal is to generate buzz, attract more foot traffic, and create a competitive bidding environment—and it works!

The Real Deal: A Business Move

Underpricing is more than just a strategy to sell a home; it’s a smart way for agents to grow their business. In a hot market like Silver Lake, a well-priced listing can attract dozens of eager buyers. For teams or agents managing multiple clients, this influx of interest translates to new leads and connections—the fuel that keeps their business thriving.

Who Wins in This Scenario?

• Sellers: In most cases, sellers benefit the most from this approach. A flurry of offers often leads to an emotional bidding war, driving the final sales price well above the asking price.

• Listing Agents: Not only do they deliver a stellar result for their client, but they also build valuable relationships with prospective buyers.

However, it’s not always sunshine and roses for everyone.

The Buyer’s Perspective: A Double-Edged Sword

For buyers, this strategy can be a mixed bag. On one hand, a lower price may pique their interest and get them in the door. On the other, bidding wars can quickly spiral into a high-stakes (and emotional) competition. The result?

• Higher-than-expected prices: Buyers often find themselves bidding far beyond the initial listing price.

• Buyer fatigue: Constantly losing out on homes in a competitive market can leave buyers feeling frustrated or disillusioned.

That’s why it’s critical for buyers to stay grounded. Know your budget, stick to it, and don’t be afraid to walk away if things start to feel overwhelming.

What’s Your Take?

Do you think pricing homes below market value is a genius move, or do you see it differently? I’d love to hear your thoughts—and your guess on how many offers that Spanish-style charmer will snag!

Let’s keep the conversation going.