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Sellers Mr and Mrs. X received 4 offers in two weeks, sparking a bidding battle, and took an over listing price offer, with 20% down, and solid financing... In Phoenix! yes even in Phoenix, the crumbling market I've chronicled on here all these months...
Sellers Mr and Mrs Z have been on the market for six months, not a lowball offer at all. Next week, they close on their new Million dollar home, thanks to bridge financing on their own home, and the time bomb fuse is lit. Latest plan? remodel their older home and RAISE THE PRICE to recoup the remodel expenses. In a market where prices are dropping 1 to 2 percent each month, while you pay contractors full retail price for a remodel, your home value is actually dropping. (not do it yourselfers)
Both had tons of equity since both pairs bought their homes many years pre-bubble. Why such a different result?
Sellers X underpriced the market by a good 10%. I seriously couldn't find a matching deal on the mls today, or sold in the last 3 months. If you wanted a small 3/2 in their area, they were it, period pure and simple.
Sellers Z have chased the market down, and remained irrational the entire time. The latest plans smacks of lunacy: toss 20 to 20K more into a home, and hope to sell for more in a declining market. While now paying interest on a bridge loan, plus two mortgages... A recipe for how to lose all the money you've saved in 20+ years of working and conservative living...
The moral of this story: take your freaking reality pills, it is about price and reality...
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Funny you should mention this. I've got neighbors doing something similar.
They were on the market last year. Starting list price in the $540's (give or take). Similar house to us, possible comp but no central air or gargae (unlike us). They are, however, on the "better block."
They had been on for a while before we listed without any bites. Then we come on listed lower and they drop to meet our price. So it begins. Every time we drop, they drop to just below us until finally they get an offer in September (give or take). Then, it disappears off the MLS but I can't find a closed price for it. A few weeks later it comes back on at the last listed price bragging about the floors had been refinished, central air installed, etc., etc. Still, no one bites by the holidays and it disappears again.
Guess who's back this spring? It's rented until the end of May and is listed at $549k, about $40k above the lowest listed price last year. Can't wait to see how this turns out.
Reality, its for people who can't handle drugs...
It's true once we found the "magic number" we had two offers.
Making small price cuts in a sharply declining market is like p*ssing on a forest fire. There is a house I like where the owner is doing that. Since I'm not going to buy until the fall, (s)he is just keeping it warm for me.
Does anyone think that the value of our homes in the area of Bel Air (in Los ANgeles) will increase again by next Spring?
No. But that said, your starting point for "the value of our homes in the area of Bel Air" is what they are selling for today, not what the Zestimate is on your home.
So if the Zestimate on your home is 200K but similar homes are selling for 300K today, you don't have to worry about your home decreasing from "today's 200K price". But, you should be concerned about your home decreasing from "today's 300K price".
If you know you will need to sell, price aggressively low and sell quick.
Anyone who owns in Bel Air and has only lost $100,00 of their property value has nothing to worry about. That is a drop in the bucket for Bel Air. WHat's your house worth? $2 million? $3 million?
They said "another 100k since last month," Alpine (2 Big).
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