A pricey house in Riverside recently came on the market and almost immediately had an accepted offer. The owners then received, and accepted, a still-higher offer and told the first buyers to pound sand. In real estate, of course, buyers and sellers are perfectly free to go back on their word until signed contracts are in hand (although I find it interesting that so many people who do this are from Wall Street where, my father told me, “your word is your bond”). But there is a danger in doing so: buyer’s remorse. Everyone likes to think they’re getting a bargain or, at worst, paying no more than a fair price for something. When a potential buyer in a flush of enthusiasm bids way over an asking price, he then spends his weekend wondering if there’s a “Chump” sign flashing over his head and on Monday, calls his broker to kill the deal. That’s what happened in Riverside and, when the seller went back, hat in hand, to the original buyer, guess who was told to pound sand then? If you want to sell your house to the highest bidder, and who doesn’t? then, if you are lucky enough to have more than one person interested, conduct a bidding war – sealed bids, contracts picked up at your lawyer’s office, whatever. Don’t do it piecemeal, accepting, then discarding a succession of bids. If you do, you’ll anger a lot of buyers who may never come back and you stand a good chance of accepting an offer that, a day or two later, vanishes in a puff of smoke. You’ll be burned, and perhaps appropriately so.
Scum-sucking Bottom Feeders
I received an offer on one of my listings the other day that was so low (1/3 of asking price) that my officer manager burst out laughing when I passed it on. My reply (oh, I do love this job, sometimes) was the following letter: Dear (Ms.X):
A formal reply to your clients’ offer on the above property will be found in next week’s (October 28th) column but, while they are waiting to learn yea or nay (hint: its headline reads, “Scum-sucking Bottom Feeders”) I thought to pass along to them a map of Red Star, Arkansas, population 20. I think that Red Star’s inbred, shallow gene pool might prove a more comfortable atmosphere for them than they’ll find here in Greenwich. Of course, I also admire their threat to rent until the end of the world comes next spring, and I look forward to monitoring their progress in buying a comfortable little place in Conyer’s Farm next May for, say, $450,000. Keep me posted. Best, etc.
Making readers laugh out loud is effect I strive for in my novels; it’s not what you want when you’re bidding on property. Low ball bids of that magnitude are just stupid – they’re the mark of unsophisticated yahoos who, year after year, wander into town determined to find a “real” bargain. It is a complete waste of time dealing with these people, either as a seller or an agent because they never, ever buy. Where do they go? I assume they get sidetracked into one of those “real estate with no money down” schemes out in Oklahoma but I do know this: they don’t find what they want in Greenwich. Want to negotiate a price? Go ahead, it’s the American way, but if you want to be taken seriously, make a serious opening bid.
But Having Said That,
Here’s a note to sellers: price your house right, which means, for today’s market. Interest rates are rising, inventory is growing and buyers are looking more and more like tire kickers. If you wanted last spring’s price for your house, you should have listed it then (and if you did, and it is still unsold, you over-priced it). Prices have flattened and you aren’t going to get your pie-in-the-sky dream price. In short, don’t base your asking price on “what I’d love to get” but on what comparable houses are currently selling for. You will still make a tidy profit, but not necessarily as much as you would have in a stronger market. So don’t be so greedy that you can’t sell your house, eh?
Third Quarter Results
The Greenwich MLS has just sent out the third quarter book. I’ll discuss that data next week (“nothing to see here, move along, move along”) but I did find it amusing to see a number of houses that finally sold at prices ranging as low as half of their original listing price. Of course, the listing agents don’t like to reveal their misjudgment so openly; these houses, some of which were on the market for literally years, are yanked from the MLS and then relisted at a sensible price so that the record will show, say, 15 days on the market, selling for 96% of the list price. Uh huh.