If You're House-Hunting on Instagram…Read This First

If you're on the Los Angeles Homes For Sale side of Instagram, you know this scene by heart.

You're scrolling. A beautiful home pops up. It’s exactly what you envision for yourself. Then the price tag pops up and you want to scream.

You keep scrolling. Another home comes up. It’s in the same neighborhood, with the same aesthetic, but the price is $300,000 less. You think, wait… this is actually attainable. Same zip code and it's $300K cheaper?? You leave a comment. "DETAILS PLEASE."

The trick is…that house isn't $300,000 less than the others. It's likely about to sell for $300,000 more than the listing price.‍ ‍

The Trick Has a Name

It's called underpricing, and it's one of the most effective marketing tactics in real estate. The listing agent and the sellers intentionally price the home low, and so that it gets as many eyeballs as possible. Every one of those people asking for details on TikTok is a future Open House visitor. Then the weekend comes, and that Open House is FLOODED with people.

Now, probably only a few people walking through are actually prepared to pay the home's true market value. But that doesn't matter, because of the effect this frenzy is having. These buyers walked in already planning to offer over asking with strong terms. But now, they're standing in a crowded living room, watching everyone else circle the same kitchen, and they’re asking themselves: how high am I really willing to go? How tight can I actually make these terms?‍ ‍ ‍

So the "underpriced" home suddenly gets much more expensive. Nothing sharpens a buyer's offer like watching ten other people write one too.

I'm Part of the Problem

I'll be honest with you: I post underpriced listings all the time. I’m giving you the cautionary tale, because I’m part of the problem. It’s hard to avoid because it’s happening everywhere, from Woodland Hills to Burbank to Pasadena.

But when you actually reach out to me about an underpriced home, I'm going to tell you the truth about the price. If a Sherman Oaks listing hits at $1.15M and I know it's likely to close closer to $1.4M, I'm going to say so before you fall in love with a number that was never real.

‍Then we're going to have a real conversation about what you can actually, comfortably afford, in this market, at today's rates.‍ ‍

The Test I Actually Use

When I know your affordability range, here's what I do:

I pull every home that has sold at that price point in your ideal neighborhood over the last several months. Not what's currently listed for sale...what actually closed in your price range. You will look through them and for each home, ask yourself: would I have bought this?

If you flip through and only one or two homes make you pause and think "yeah, I might have bought this," that's useful information. It might be telling us your expectations and your real budget aren't quite lined up yet, and we need to talk about what's realistic before we start touring.

But if you get to five, six, seven homes where you're nodding along thinking "I could see myself there," you're in great shape. That tells me your range and your taste are already aligned with what Los Angeles is offering, and I would expect we find your home within a couple months.

The Takeaway

‍An underpriced listing isn't a “deal.” It's really just bait, and it captures your attention because it's designed to. As your agent, my job is to set realistic expectations for you before you start looking seriously, so that you don’t end up on a quest for the “hidden gem” that will never show. When you finally do make an offer, you’ll know you’re coming to the table with a strong bid.‍

If you want to see what's actually closing at your price point right now, reach out and I'll send you the realistic picture of your budget.