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Where are the offers?

Most sellers with overpriced houses don’t understand why no one extends an offer, at any price on their property. Having spent many weeks recently with a very nice couple who are ready to buy but haven’t extended an offer on anything we’ve seen, here’s my conclusion: unlike, say, corporate take-over targets, houses are personal. The same hard-bitten business man or business woman who’d think nothing of extracting the lowest possible price from another corporation’s shareholders seems to balk at tossing a lowball, but realistic price at the owners of a house. “Call me if they lower the price” is the almost universal response to these situations, even though I argue that the time to present an offer is before the price is lowered and more buyers flood in. I think buyers don’t want to insult people personally, so they won’t go there. Too bad, because we’ve been looking at a huge range of houses recently, ranging in price from $6,000,000 to over $12,000,000, and so many of them are asking literally millions of dollars more than they’re worth. My folks are ready to buy, but they aren’t going to over-pay. So your house sits.

More on overpricing

A builder client of mine just walked from a deal when the seller (actually, his agent) of a building lot told us that they already had an offer roughly $500,000 more we offered, far than it could possibly be worth. I told the agent to sign the deal up before the alleged buyer was recaptured and returned to the loony bin but we, at least weren’t interested. Was there such a buyer? I suspect not, which makes this an even dumber tactic than it seems – nothing worse than making such a claim and then having to return, hat in hand, begging for the original offer but if there was, God bless both buyer and seller – they’ll need such blessings. Builders have to make money on a deal. While it’s true that both builder and land seller have conflicting interests as both want to maximize their profit, a successful transaction has to make sense for both parties or it’s never going to work. At the height of the market in 2005 sellers got away with some astonishing coups but the buyers ended up in a very poor position. A house off lower Lake Avenue, for instance, sold for an insane price in that year and the developer (doing his very first project, I’ll bet) dumped hundreds of thousands of dollars into its renovation. It sold last week for, after commissions, $25,000 less than he paid for it, not even including the money spent on improvements, carrying costs, conveyance taxes and so forth. In short, the buyer lost his shirt. There may still be innocent naifs out there, convinced that they can’t lose money on Greenwich real estate but the professionals I know have stayed in business for decades by refusing to overpay for projects. If you want to sell to them, adjust your expectations.

Merit pay for teachers?

The head of our local teachers’ union claims that it would be degrading for her members to have to compete for wages, to which I say, welcome to the real world, honey. I know of no other industry where three years of indifferent performance guarantees you life-long employment with pay raises each year based solely on your waking up to breath each day. I remember the (very few) excellent teachers I encountered in my passage through the Greenwich school system and they were of all ages; the very worst were usually old frauds, going through the motions, who should have been fired years before they were inflicted on me and my classmates.
And now, “magnet schools”

The committee to examine diversity in our grammar schools was headed by our Superintendent of Schools and supposedly included a number of parents for their feedback. From what I hear from those parents, they were never intended to have a voice and that the Superintendent simply held meetings without inviting their presence and then announcing a ‘consensus” that magnet schools were the solution, a pre-ordained conclusion. I still don’t get it: if better schools are the answer, why not improve all of them, rather than a select few? One way to do so might be to improve the quality of our teachers by, for instance, eliminating tenure and instituting merit pay.

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