It’s coming around again

It’s coming around again

by Rona Fischman

I got a call from A last week. She said that there was a new listing she wanted to check out at open house. The address sounded familiar to me — not in a good way. I warmed up the agent MLS database and my suspicion was confirmed; this house had been on the market a couple of times already. I couldn’t remember it, even after looking at the pictures. (Now, that is a bad sign. I usually remember something about a house beyond the address.) A and her husband saw it and didn’t care for the place. However, the open house was swarmed and the house went under agreement by Monday.

2/17/2012  Listed for $699,900

2/22/2012  Listing Alert Flag set to: Yes – Accepting Additional Offers

2/22/2012  Status Changed to: Under Agreement

Days on the market = 5

Someone new to the market would think this is a great house, a hot house. If it sold immediately, it must be wonderful. That’s because they don’t know about the other attempts to sell it. It looked like this:

This house went unwanted since 2008. It was actually on the market for 152 days.

3/4/2008  Listed for $879,000

9/8/2009  Listed for $799,000

11/18/2010  Listed for $799,000

The problem with this house, by and large, was the price. I have no way of knowing whether the agent recommended the price of $879,000 in 2008 or if the seller insisted on “testing the market.” It doesn’t much matter. Nothing sells for that much over its real value.

It was a good house for $699,900, as demonstrated by its quick sale last week. But, when I saw it at $799,000 last year, my clients instantly rejected it. It does not compare to housing that is worth $799,000 and therefore looked like a hopeless dud. It got filed in my brain that way. The lesson for sellers is that overpricing doesn’t work.

This brings me to a question I get asked all the time: “Should I, as a buyer, look at property that is over my price range?” The answer, of course, is “it depends.”

I have found that going into a property that is WAAY over your price range is not going to hurt you. It is fantasy. So, if you go past a $2M open house, go on in and see how the other half live.

Avoid properties that are around 10-15% over your price range. These will make your choices look just a little shabby. A $699,000 house trying to be a $799,000 house looks like junk. If you are spending $699,000 and you go look at $799,000 houses, the places you can afford will look like junk. This will “ruin your palate” for houses you may actually buy.

I have a way to let my client find overpriced properties that should be in their range. It takes sellers a while to accept that they have overpriced. So, I create a set of searches to find overpriced properties that have had some time to demonstrate their unsalablity at that price to their owners.

Suppose the price limit is a firm $690,000. I will set a search with $690,000 as the limit. Then, I will set an additional search with $720,000 as the limit with 14, 30, or 45+ days on the market, depending on the town and the season. If sales are slow there, I may even set another search with 45, 60 or 90+ days with a limit of $750,000.

I also keep an eye on things that I have seen, and know to be overpriced and I have a buyer for it (if the price gets down to reality level.) The house my clients saw at open house last week was not good enough for that, but some are.

By | 2016-12-28T14:01:17+00:00 February 27th, 2012|Categories: House Hunting|

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