10 Taconic Rd
I get a tremendous amount of flack from fellow agents, all blaming this blog for the death of the Greenwich market. (My favorite quote: when someone defended me to a broker by saying, “well he’s just telling the truth” the broker responded, “how dare he!”).
But as I’ve suggested before, I’m not the one driving this death spiral, I’m just reporting it. Every day, buyers receive a message that is exactly contrary to what some agents are telling them, to wit: prices are falling, and if you wait, or toss out a low ball offer, you will benefit. Take the lovely home pictured above. In July 2008 it was priced at $8.6 million. Today it’s been marked down nearly $2 million, to $6.750. 84 Meadow Wood, in Belle Haven, asked $7.150 last June and today will accept $5.950. 34 Perna Lane, in Riverside, wanted $975,000 in October ’07 but will accept $750,000 today.
And so it goes. I represent a buyer who bid $4 million on a $7 million house last summer. The seller wouldn’t respond but has now lowered his price to $5 million. $4 million may still be unacceptable but the lesson my buyer learned is that by waiting a bit, he saved $2 million. He’ll wait a bit longer, and who can blame him?
Same thing, by the way, for rents. Today two price reductions were posted for houses on Milbank. Each started out a few months ago around $8,000, and now the owner will accept $4,000. So don’t blame buyers, or other agents, for low bids. Experience is telling buyers that they’d be chumps to offer anything like full asking price.
During the past 15 months I’ve presented some very low offers on behalf of my clients to sellers’ agents and they were all rejected. I’m not uncomfortable with presenting any offer – that’s my job – but it’s been an interesting learning experience because offers that were rejected out-of-hand last spring now seem to be too high. I’m currently working with another handful of buyers and may soon be repeating that process. Will low bids be accepted now? Probably not.
Here’s the problem, as I see it: I can tell a buyer, with a reasonable degree of certainty but with occasional huge error, what a house is worth today. In the past, that was usually enough to help a sale go thorugh because we all “knew” that the house would be worth at least as much, if not more, a year later. Not now, so while I can say that a house is worth, say, $4.5 million, give or take $250,000 today, I have no idea what its value will be six months from now. Nor can anyone else.
So my buyers, at least, aren’t willing to pay what a house is presently worth – they want a protective cushion that will shield them from a further precipitous decline. I don’t blame them and I’d want the same thing but it’s tough on sellers, especially those who have already pared their price down from an extrapolation up from 2005 prices to a figure that reflects today’s market. They feel as though they’ve done their part, and balk when more is demanded of them. Stalemate.
But for sellers, if you do receive a low-ball offer from your agent, don’t bite her head off or get angry at the offeror. Haven’t you been saying, “just bring me an offer”? Well, someone just has.