When did buying a home turn into a casino where the house always wins?

Last week, I watched a client—let's call her Amy—lose her mind over a listing in Live Oak. Cute ranch style, listed at $1.35M, which already was above her comfort level. But it offered everything she was looking for. And she did everything right: got pre-approved, had strong terms. It was truly a great, clean offer package.

Her offer? $1.45M.

The winning offer? Somewhere close to $1.6M.

That's about $300,000 over asking. Yes, even in today's economy.

Amy called me, voice shaking: "Why would they even list it at that price? This feels like a scam."

And honestly? She wasn't entirely wrong.

Welcome to the Underpricing Olympics

Even though 2025 has been a downward trending market, many neighborhoods in Santa Cruz are still experiencing a HOT sellers market with multiple offers.

What's happening across Santa Cruz right now is a pattern so predictable that's been going on for YEARS.

Out-of-area agent lists a home significantly below market value → generates massive buzz and 30+ showings in the first weekend → creates bidding war → accepts an offer $150K-$300K over asking → everyone loses their minds except the seller and that agent.

Rinse. Repeat. Every. Single. Week.

And look, I get the strategy from a seller's perspective. Multiple offers feel exciting. Competition drives prices up. It works.

But here's the issue: this isn't a savvy marketing tactic. It's manufactured chaos that wastes everyone's time, energy, and emotional bandwidth.

Why Out-of-Area Agents Keep Doing This

Let me be blunt: agents who don't actually work in Santa Cruz County full-time don't understand the micro-markets here. They don't know that a house in Pleasure Point will perform completely differently than one in Seabright, even though they're three miles apart. They don't understand that Boulder Creek pricing has its own universe of logic that has nothing to do with Capitola.

So they do what agents everywhere do when they're uncertain: they underprice to create activity.

It's the real estate equivalent of throwing spaghetti at the wall. List it low, generate buzz, let the market "tell you" what it's worth through offers.

Except here's the problem: this isn't transparent market discovery. It's a bait-and-switch.

Because buyers like Amy see that $1.35M listing come up and think, "Finally, something I can afford!" She spends hours researching the neighborhood, takes time off work for showings, emotionally invests in the idea of this being her home—only to discover the "real" price was always $1.6 million. She was never a real contender. She was just part of the show. The worst part? The listing agent hyped us up saying that exact scenario was "unlikely to happen"...

The Zillow Problem

"But can't buyers just look at comps and figure out the real value?"

In theory, yes. In practice? Not even close.

Zillow shows you numbers, but it doesn't show you context. It doesn't tell you that:

• This neighborhood routinely goes $200K over asking
• That recent sale closed low because of inspection & infrastructure condition issues
• This one had family connections
• That comp isn't actually comparable because of location nuances only locals understand

Zillow gives you data. It doesn't give you insight.

And that gap? That's where buyers fall through the cracks and lose their sanity in the process.

The Ethics Problem Nobody Wants to Address

Here's where this gets uncomfortable: is this even ethical?

Technically, yes. There's no rule against pricing a home wherever you want. Sellers and their agents can absolutely list at $899K knowing full well it'll sell for $1.2 million.

But just because something is legal doesn't make it right.

When I list a home, I price it based on reality—not fantasy, not manipulation, not to generate artificial buzz. Because here's what I believe: real estate should be built on trust, not trickery.

When you underprice a home intentionally, you're:

• Wasting the time of buyers who were never realistic contenders
• Creating false hope and emotional devastation
• Making the entire process more stressful than it needs to be
• Eroding trust in an industry that already struggles with credibility

I didn't get into this business to play games with people's dreams.

How This Actually Plays Out (And Why It's Exhausting)

Let me walk you through what this looks like for buyers:

Week 1: New listing drops. It's priced $100K-$200K below what it should be. You get excited. You schedule a showing.

Week 1, Day 3: You see the house. It's fine. Not perfect, but at this price? You could make it work. You start imagining furniture placement.

Week 1, Day 5: Your agent tells you there are already 5+ offers. You panic. You write your best offer—over asking, aggressive terms, maybe even waiving contingencies you shouldn't.

Week 1, Day 7: You lose. By a lot. To someone who offered $200K more than you could ever afford.

Repeat this 3-5 times, and you're ready to rage-quit the entire process.

This isn't house hunting. It's emotional whiplash. It's just wrong.

Why Local Expertise Actually Matters

This is where having an agent who actually works in Santa Cruz County daily makes all the difference.

I can tell you:

• When a listing is genuinely priced to sell vs. priced to generate offers
• What a home will actually go for based on neighborhood trends Zillow doesn't track
• Whether you should even bother writing an offer or save your energy
• How to structure an offer that's competitive without being reckless

I can help you opt out of the circus.

Not because I have magic powers, but because I've been doing this here for nearly a decade. I know which agents consistently underprice. I know which neighborhoods have the most aggressive bidding wars. I know when a listing is realistic and when it's theater.

My Approach: Radical Honesty

When I list a home, I price it at market value. Not $100K below to create fake buzz. Not inflated to "leave room for negotiation." Market value. Based on real data, real comps, and real neighborhood knowledge.

Does this mean my listings sometimes sit for a week or two instead of getting 15 offers in 72 hours? Sometimes, yes.

But it also means:

• Buyers know what they're walking into
• Offers come from people who are genuinely qualified
• The process is transparent, not theatrical
• Everyone's time is respected
• My sellers are still selling for top dollar, ethically

I'd rather have three strong, real offers than fifteen that were never going to work.

Because here's my belief: real estate should help people build futures, not play mind games.

What You Can Do as a Buyer

If you're trying to navigate this market without losing your mind:

1. Work with an agent who knows these patterns. Someone who can tell you, "This is underpriced by $200K—let's take it with a grain of salt" or "This one is actually realistic—let's move fast."

2. Don't trust the list price. In this market, it's often just a starting point for negotiation theater. Ask your agent what it will actually sell for.

3. Protect your emotional energy. Not every listing deserves your hope and time. Be selective about which ones you tour.

4. Know your walk-away number. Bidding wars make people do irrational things. Decide your max before you fall in love with a house.

The Bottom Line

The underpricing game isn't going away anytime soon unfortunately. It works too well for sellers and listing agents to stop.

But that doesn't mean you have to play along.

With the right agent—someone who prioritizes honesty over hype, who knows this market inside and out, and who genuinely cares about protecting your interests—you can navigate this chaos without losing your sanity.

So after we walked away from that negotiation, I couldn't help but wonder: maybe the real luxury in real estate isn't finding the perfect house. Maybe it's finding someone who tells you the truth, even when it's not what you want to hear.

Tired of the pricing games and ready to work with someone who'll shoot straight with you? I promise to tell you what homes will actually sell for, which listings are worth your time, and when to walk away before you're emotionally invested.

Let's talk: [email protected]

Because buying a home should be exciting—not a psychological experiment in frustration tolerance.