Beware of Bidding Wars!
Not long ago, at the height of the spring market, the owner of 20 Partridge Hollow Road conducted a bidding war for his property. Several buyers bid, one won, the others lost. But one of the losers, frustrated at not getting what he wanted (a situation buyers in this price range rarely encounter) contacted the seller directly and offered to top the winning bid. The seller reneged on the first deal and accepted the loser’s offer. Not nice, perhaps, but certainly entirely legal – in real estate, no deal is final until both parties have signed a contract. But now the property has been returned to the market so I presume something went wrong. I wish no ill to the seller or his buyer (who is rumored to have forfeited a $700,000 deposit) but the original wining bidder could surely be excused some small measure of shadenfreude here at other’s discomfort. Morals of the story are one, curb your enthusiasm and, two, if you’re dealing with people who don’t like playing by the rules, don’t be too surprised if they walk. Good faith goes a long way in this business.
I just reviewed this May 1- June 14th’s sales activities with the comparable period from last year and, all in all, I think sellers should be reassured. We’re not in any sort of boom but neither are we slumping. In essence, sales activity is just about where it was last year. A couple of exceptions: thirty-three houses went to contract for under a million dollars compared to twenty-five last year; sixteen went in the $1-$1.5 this year, thirty-three last; and ten went for $2-2.5 vs. only five last year. Other than that, there is not much difference. A total of one hundred ten houses went to contract in the past six weeks compared to one hundred nineteen last. Top price this year was $18.750 (asking – originally priced at $44,900,000!). Last year, $15,000,000 (from an original price of $25,000,000). Neither a bubble nor a bust, in my opinion. And as always, well-priced houses move quickly, pie-in-the-sky houses linger.
Case in Point
510 North Street was originally placed on the market September 30, 2002 for $11,500,000. After a long series of price reductions and a change in brokers it was finally marked down to $6,850,000 and was sold (by Diddle McCalister of Round Hill Partners – yeah, Diddle!) for $6,550,000. September ’02 to June ’05 is a long time to keep your house in showing condition, in my opinion.
A friend of mine who lives on Beechcroft Road recently showed me three neighbors’ houses all of which are scheduled for or in the process of being replaced with larger homes. At least two of the projects are being done by the owners themselves, who have rented elsewhere for the duration. I think these are smart people. Beechcroft is a very nice street with a great location: far enough off North Street to escape the noise, close enough to town to be really convenient. In effect, the street’s value has grown past the houses originally placed there in the 1950s.
The retirement of Herbie Salamon from our police force removed the last traffic cop who was willing to yell at errant pedestrians. This is too bad, for a number of reasons. One is that I miss the street theatre – nothing more fun than watching Herb bark at breezy jaywalkers. Another reason is more serious – when I’m in a car and am directed to proceed across the Avenue by a cop, I don’t (or didn’t) expect to encounter any obstacles in my way, like mothers pushing their kids in strollers right into my path. But they do so now, without so much as a harsh word from the cop controlling the intersection. I really don’t want to run over a small child and I wish we’d get back to enforcing street crossing rules.
Do It Yourself
I see in the paper that the owner of a small house in Riverside sold it himself for $665,000.00. That move saved him from paying a real estate commission, but I wonder how pleased he’d be if he knew that his house was worth, at least in my opinion, somewhere close to $750,000? We’re hardly geniuses in this profession but what we can bring to the game is experience and knowledge. If you’re tempted to sell your house yourself, at least make a diligent effort to learn what comparable houses are selling for. Owners can over-price their property just like Realtors, and then the house will sit, unsold. But if you under-price the place, then, unlike what happens to a house exposed to the market on the Multiple Listing Service, someone will snatch it for a bargain price. And you’ll never know it.