Overpriced listings. They are freakin’ everywhere! I could cite you a dozen (or more) examples right off the top of my head, but here’s my favorite….
We have a buyer who looked at a $599,000 home. It was a very nice home, never lived in. Great subdivision.
We comp’ed it at $540K, tops. Offered $530K and the seller countered at $545K, IF we’ll waive the appraisal contingency.
So they just admitted they don’t think it will appraise for $545,000. But they listed it for $599,000???? What’s up with that?
Pure unadulterated greed, that’s what’s up. Or a clueless agent, or hopes for clueless buyers. Whatever the case (and it’s probably a combination of all those things) these overpriced listings are out there and are screaming “BE CAREFUL!” to all the buyers. Please don’t just assume a home you’re interested in is priced correctly. Many are not.
Likewise, don’t assume everything is overpriced either. Many are not.
Bottom line, have your agent run comp’s before you submit any offer. If your agent won’t do that, do not walk away, RUN!!
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I agree with all the things you said… but most comp’s are meaningless in such a fast-track downturn!
I’m not sure I’d agree that MOST comps are meaningless (or that we’re in a “fast-track downturn”, but that’s a post for another day. Thanks for the idea!)
MANY comps can indeed be meaningless in ANY type of market. You, or your agent, must be in tune with the current market dynamics to get good comps. With the big sites that offer comps or “free home valuations” (ie: zillow.com), one has to be extremely careful as comps can be aged. And aged comps are not good in any market that has been changing (such as the Phoenix market).
A good agent can get valid, current comps. It takes a lot of work. But it can (and should) be done.
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Look up MLS 2517555 (to my right) and 2486641 (to my left). I ask myself WTF are these people thinking? The bubble is over! Ah, such foolishness. I bought the
larger one with *every* upgrade except flooring for 243 8 months ago.
Man, I’m not in your business and I can’t figure how it must be to tell people their listing is Sofa King Outta Line.
Mark –
Thanks for the comment! Maricopa, as I’m sure you are well aware has been crazy the last 12 months or so. But the insanity is over. The house to your left has been reduced in price, and it’s been on the market for 96 days (the listing agent should seriously consider taking out the “HURRY…this won’t last long!” statement in the description. But that would entail what, 12 seconds of work..). It was purchased 14 months ago for 212K. So the owner is hoping to get a $100K profit. If he’d settle for “only” 50 – 75K, I could have his house sold tomorrow. Meanwhile it sits vacant while they make payments on it..
The house to your right has only been listed for 18 days, and I predict a price reduction in the next two weeks, tops. The owner there is looking for a $200K+ profit on a home they’ve owned for roughly 17 months. Seems a wee bit excessive to me.
I’m all for people making everything they can, but agents and sellers need to wake up and smell the coffee. The craze of last year is over. Very handsome profits can still be realized. But insane profits can not.
It is **very** difficult to get sellers to understand this. There are many agents that will take any listing they can get, hoping to talk the sellers down in price as the weeks roll by with no buyers. Sooner or later, people will learn (I suppose…). A lot of people blame it on greedy sellers, and that is part of the problem. Another HUGE factor is ignorant agents.
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It seems that the Republic is reporting the 45,000 listings. I don’t agree. I would estimate that 60 – 70% are still 10% overpriced — which means they aren’t really in the market. So if you subtract the overpriced listings (27 – 31,000 ), you get 15,000 – 20,000. This isn’t as much of a “flood” of resale homes as thought.
And if you subtracted all the new “flip” homes, how many would you have then? We’re talking less than 10,000 homes. That’s not really a huge overstock for a 3.5 MM metro area.