When you're pricing your own home for sale, sometimes you can feel unbounded.
Your property is like no other.
The comps are all so different. Yours is so much better.
So price it to the moon.
The temptation is always there.
And, sure, sellers listen to their brokers (or should!), but the ultimate decision is the client's.
This is how, sometimes, a listing starts out quite a bit above market.
Maybe it's obvious, maybe it's not. Buyers are going to come take a look, and then they'll watch and wait.
A listing can get stuck in "overpriced limbo" for a long while. Truthfully, the market will probably speak within a couple of weeks, and the listing agent should know the price range where it's likely to trade, but sellers aren't always listening to the market. They want their buyer who will bring them their price.
Once in a while, a neighbor hits the market and changes everything.
Suddenly, the comps out there aren't so different. In fact, the neighboring property shares multiple attributes – similar location, home style, vintage, square footage, updates.
And not only is that listing not a sold comp (where you can argue "yeah, but that sale was before the xxxx and the yyyy which caused values to increase"), it's right there on the market as direct competition.
Here at MBC, we find this fact pattern so interesting, we've written countless posts about cases where a neighboring sale helps with "price discovery" for one that's stuck on market.
Oh, sorry, did we say helps?
Maybe we meant: "cases where a neighboring sale undercuts the value of a property on the market."
Guess it's all in the eye of the beholder.
The latest example is pretty stark.
2215 Bayview (4br/4ba, 2630 sqft.) began in mid-February this year asking $6.250M.
The oversized, rear-unit townhome is actually one of 4 units developed at the same time in '06-'07.
It's been substantially remodeled inside, and gets good views. These are good factors in its favor.
The price wasn't working, though, and they cut $300K to $5.950M after about a month.
After two months, the bomb dropped.
Neighboring 2212 Manhattan Ave. (4br/4ba, 2600 sqft.), part of the same 4-unit development, came to market far, far lower: $4.800M.
Just 10 days later, they had a deal.
Immediately, 2215 Bayview canceled off the market and re-listed lower, at $5.600M.
(All of this was noted in our post, "Neighbor Undercuts Neighbor and Sells.")
It turns out, the neighbor's pricing and quick sale were exactly what the doctor ordered.
2215 Bayview found a buyer in 9 days on the "new" listing.
The sale has now closed at $5.200M.
In between, 2212 Manhattan had closed for its asking price: $4.800M.
The differences between the units have been noted here: 2215 Bayview is up higher and off of Manhattan Ave., and has been thoroughly updated inside. Those factors were definitely worth something above the price on 2212.
Specifically: $400K.
You can observe that the closed price on Bayview is more than $1 million below their original ask, but what does that tell you? See the first part of this post again.
There may have been a temptation to list Bayview high because it was unlike any other property in the comps. And this year's been rolling. And the fires. And...
And then a bolt of lighting struck right in front, and helped them sell for a fair market value.
If you lost a million dollars, you'd feel some hurt. But if all you really wanted to do was sell for a fair price, the clarity and focus provided by a neighboring sale should really be welcomed.
Sometimes it takes two to sell.
Please see our blog disclaimer.
Listings presented above are supplied via the MLS and are brokered by a variety of agents and firms, not Dave Fratello or Edge Real Estate Agency, unless so stated with the listing. Images and links to properties above lead to a full MLS display of information, including home details, lot size, all photos, and listing broker and agent information and contact information.
