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- A stated list price anchors every conversation and can bear on your commission. An unpriced listing with an offer date asks buyers to name the number by a deadline.
- Whichever you choose, the number has to trace to the rent roll, the expenses a buyer will use and sales the buyer can look up.
- A final round of offers holds up only if everything the bidders hear is true, and a dual agent may not reveal what you would accept.
- A price reduction tells buyers something about the first number, so decide before launch what response would trigger one and who approves it.
Pricing an apartment building listing means choosing between a stated asking price and an unpriced launch with a date by which offers are due, then backing whatever you choose with the rent roll and the sales behind it. The method does not change what the building is worth. It changes how buyers arrive at their offers, and what happens if the first number turns out wrong.
A stated price or a call-for-offers date
| Question | Stated list price | Unpriced, with an offer date |
|---|---|---|
| Who names the first number? | You | The buyers |
| What happens to the bidding? | The asking price can act as a ceiling | The top is left open |
| Who may pass? | Buyers who cannot reach the price | Buyers who want a number before they tour |
| What do you still have to decide? | The figure below which you would keep the building | That figure, and the date offers are due |
A stated price tells every buyer where the conversation starts and gives the broker a number to defend. It can also work as a ceiling, since a buyer who offers the full asking price has little reason to go higher unless someone else is bidding. An unpriced listing sets a date instead. Buyers tour, run their own numbers and submit by that day, and the competition among them sets the price.
You still need a number. Agree in writing with your broker on the figure below which you would rather keep the building, and keep it between the two of you. If the brokerage also represents a buyer, Civil Code section 2079.21 bars it from telling that buyer you would accept less than the listing price without your express permission.
A stated price can also bear on your commission. Under a listing form that treats the fee as earned when the broker presents an enforceable offer from a ready, willing and able buyer on your listed terms, a full-price offer on those terms can earn the fee even if you turn it down. So list at a price you would accept, and read the trigger in the commission clause before you choose one.
Tying the number to the rent roll and the sales behind it
Buyers of apartment buildings are buying income, so the asking price has to start from what the tenants pay today and the expenses a buyer will use. Market rents are upside. Show the path to them. In the City of Los Angeles, an RSO unit's rent resets only when the unit turns over on grounds the ordinance allows, such as a voluntary move-out or an eviction for unpaid rent, and until then its increase is limited to LAHD's allowance. The expenses should carry the property tax a buyer will pay once the sale resets the assessment under Proposition 13.
The sales behind the price should be ones a buyer can look up, with the broker's account of how each differs from your building in unit mix, condition, rent control, parking and date of sale. A price that rests on one sale, or on sales from a stronger market than the one you are selling into, will not survive the buyer's own comparison.
Keep in view what a broker's number is. Business and Professions Code section 11302 says an opinion of value that a licensee gives in the course of licensed work is not an appraisal and may not be called one. Ask each broker to show the inputs, using the questions to ask a listing broker, and compare the reasoning behind each number more than the numbers themselves.
Inside the City of Los Angeles, check the price against Measure ULA. For transfers on or after July 1, 2026, it taxes the whole price once the price exceeds $5,400,000, at a higher rate from $10,900,000. The tax works as a cliff, so a sale just over either line can net you less than one just under it, and the asking price should be set with that in view. The Office of Finance adjusts both thresholds every July 1.
Running a final round of offers
When several offers arrive by the date, the broker can go back to the strongest of them and ask for a highest and final offer by a second deadline. Decide the rules before you need them:
- who is invited back, and whether every bidder hears that a final round is under way;
- what the invitation says, which should be only what is true, such as that more than one offer is in hand;
- which terms count besides price, including the deposit, the length of the due diligence period, the loan terms, the closing date and the buyer's record of closing;
- whether you will accept a final offer as written or counter one of them.
The round holds up only if every statement in it is true. An invented competing offer is a misrepresentation, and section 10176 of the Business and Professions Code lets the Real Estate Commissioner discipline a licensee for a substantial one. Dual agency limits the round from the other side. If one bidder is represented by your broker's own office, section 2079.21 also bars the brokerage from passing that buyer's confidential information to you, such as a willingness to pay more than it offered, without the buyer's express permission.
What a price reduction tells buyers
A reduction tells the market that the first number was higher than buyers would pay, or that your plans changed. Every buyer who saw the first price can fairly wonder whether the second one is the floor.
Base the decision on what the market has told you, meaning the number of buyers who toured, what they offered and what each one objected to. If buyers are pricing a problem, such as deferred work or an unpermitted unit, fixing or documenting it may do more than a lower number. If they are pricing the income, close the gap they named in a single cut, since a string of small ones reads as a seller still looking for the floor. You can also change the method instead of the number, relaunching a listing that sat at a stated price with a date for offers.
Whoever proposes the change, the listing agreement should require your written approval for it.
Settling the pricing plan before launch
- The asking price, or the offer date and how offers will be reviewed.
- The figure below which you would keep the building, known only to you and your broker.
- The date you will review the response, and what response would lead to a change.
- Who approves a price change, in writing.
- For a building inside the City, where the price sits against the Measure ULA thresholds.
Before you commit to a number near a tax line, have your CPA show you what each price nets after tax. Shaya can tell you what the building's income and its sales support. He is not a CPA, and the after-tax arithmetic is your CPA's to run.