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As a recent first time home buyer, I now get a lot of mail from Realtors and agencies. I've noticed that often times advertisements will boast that a house has sold in one day. In my mind, if a house sells that quickly it seems likely to have been underpriced.

Is this just appealing to potential sellers' need for instant gratification, or am I missing something here?

  • I would tend to agree with you. Either that or its an incredibly hot housing market, in which case this doesn't necessarily say anything remarkable about them. It _ could _ be a matter of brilliantly reading the market, or it could mean they went the auction for, or they might just have gotten lucky. – keshlam May 21 '16 at 1:02
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    I'd assume it's the realtor's desire to portray working with them as being as painless/easy as possible. – Pluto May 21 '16 at 1:39
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    Certainty and liquidity have nonzero value. If you value the fullest market clearing price less than "an acceptable price to you" in one day, that's a rational trade on uncertain information. – user662852 May 21 '16 at 20:52
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Is this just appealing to potential sellers' need for instant gratification, or am I missing something here?

Timing matters for some people.

If you are moving cross country, it's important to be able to sell your house quickly if you want to sell.

This can also matter if the seller is interested in buying another home. If their existing home takes three months to sell and they have already picked a home they want, it can make the timing of funds transfers quite inconvenient - often people need to sell their existing home in order to make a down payment on a future home.

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In a hot market, aka a "sellers market", rates are low, money readily available, housing inventory low, and demand high. It's not rocket science, and in fact, the only thing the buyer is likely to need from his agent is advice on price. Is it possible the fair price attracts a buyer on day one? Sure. But it's far more likely the house should have been listed higher. Perhaps a lot higher.

(Disclosure - I am an agent) I'd rather set a price too high, and agree with the seller that we have room to go down, than to sell on day one at a low price, wondering how much money I just lost my client.

Even if an offer came at asking price on the first day, in a hot market, the right answer is "we are entertaining a number of offers, please confirm your best and final by next Friday."

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