No War on 29th After All

By Dave Fratello | August 23rd, 2010
This year in the Trees, we've seen 2 homes try the strategy of "underpricing" to draw multiple bids. Now both have sold. How'd they fare?

The first case was 2708 Pacific, which first failed to sell at a high price (as high as $1.849m) early this year, then dropped starkly to $1.399m as part of a conscious strategy to start a bidding war. (See "Get 'Er Done.")

On Pacific, the strategy worked.

Tax records show that it sold last week for $1.530m, though there's no MLS entry yet of the closed sale. (Having seen people moving in, we were curious and looked up the sale through other means. Also, we hear this was a second winning bidder's deal after the first winners left the scene midway.)

Just 2 weeks after the huge price cut on Pacific triggered multiple bids in early June, along came 637 29th. They wanted to repeat the feat. (See MBC's "Betting on a War.")  

The home was quite comparably sized – Pacific had 5br/4ba, 3400 sq. ft., while 29th was at 5br/3ba, 3350 sq. ft.

29th had a much better location going for it – between Flournoy and Blanche on a sleepy block.

Countering its location advantage was its condition – Pacific was move-in ready with good updates, while the mid-80s home at 29th was going to need some work.

29th launched at Pacific's bidding-war start price: $1.399m, full of confidence that what would follow would be a bidding war.

The listing boasted: "multiple offers are expected." Deadlines were given. Buyers were to start with their "highest and best" offers.

At first, it looked like the strategy had worked again. There was a quick deal posted.

But a week later, 637 29th was back on the market again for another round. There was a new deadline set. Bidding instructions ended with "good luck!"

Lucky or not, the winning buyers didn't have to overbid that $1.399m start price after all.

They paid less: $1.347m.

So maybe you can't draw a bunch of overbids at $1.399m automatically in the Trees. Maybe the market will find its level regardless of a seller's designs.

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