Is That Over Asking, Or Under?

A recent Sand Section sale poses something of a philosophical question:

When is a home sale over asking, and when is it under?

Oh, you say, that's easy! Math 101. Compare the asking price to the sale price. 

But sometimes, there's a wrinkle, and it's not so simple.

We actually discussed a case like this in February, relating to once-new construction at 724 13th (6br/7ba, 4844 sqft.), which recently sold for more than its first asking price from way back in 2019, but below its most recent asking price. 

The newest sale to pose this question was listed and sold this year only. 

It's 124 33rd (3br/4ba, 1720 sqft.), a walkstreet townhome (that's rare!) with ocean views and a nice corner location.

The listing was officially on market in late February, asking $3.799M. 

After a week, it was under contract, where it remained for 19 days. 

Alas, sometimes things don't work out during escrow. This home came back to market. 

When it did, they raised the price dramatically to $4.088M (+$289K). 

This may be the time for a brief disclosure: We had a client who participated in multiple offers that drove up the price as this listing first went under contract. It was not our client that got the property, or who quit after 19 days.

Speaking generally, it's often rough for a listing that is under contract but then falls out of escrow. Everything can be the fault of a buyer, but the perception is still that there is "something wrong" with the house. It requires extra explaining to say no, no, that's not the case – if it's not the case. 

A seller kinda needs to prepare to take a hit on price when escrow fails and the listing goes back to active. 

That's what made 124 33rd look so different. Here, the escrow was canceled, but the price went up 8%. Bold move. 

Now that the sale has closed, we ask our philosophical question. 

The closing price was $3.850M. 

That's over the start price by $51K. 

But it's under the last asking price by $238K. 

So was the sale over asking, or under? 

Can we get a ref out here?

Ah yes, the MLS, source of truth.

In our "backend" view of the listing in the MLS, we see a cheerful little blue "up arrow." 

That's the indicator for when a home has sold above list price. In this case, the MLS defines it as the start price.

But there's another way to view it, perhaps closer to the seller's perspective. 

There was once at least one offer in hand high enough to redefine the market value as nearly $4.100M, not just the $3.799M start. Even falling out of escrow, this must have seemed like a number that the market should hit again. 

But the market did not do that. The market was well below the revised asking, and apparently below the level of that originally accepted offer. 

So we'd say this one sold under asking.