It was just last week that the fashionably remodeled single-level East Manhattan home at 1707 10th debuted at $3.499M.
And then, on the seventh day, they cut. Big.
It was a quick drop to $3.200M, a cut of $299K (-8.5%).
That's an unusually fast change in strategy and price.
It's interesting to see today, as we fill in a little backstory.
We had a client with potential interest in the property as it came out, so we did some digging on the buyer's behalf.
Even before talking to the listing agents, we learned that the sellers of 10th St. were under contract on another specific property, which also had at least one other offer, and that this would be a contingent sale. (They would need to sell this to buy the new place, and any buyer for 10th would have to understand the sellers needed to be able to close on the "upleg" [new house].)
When our client said the price looked pretty high at $3.5M, we had to say we agreed. Almost all of the recent comps were significantly lower. Except one, in what seems like an outlier, but a very recent sale: 1632 Ruhland (4br/3ba, 2638 sqft.), which was asking $3.500M (what?) and got $3.700M (wow!).
So the discussion with the client was: If they don't get an immediate offer on 10th, the sellers are going to have to make a move real soon or they risk the upleg. Go see it. We'll stay close.
Alas, the buyer visited 10th and said it was beautiful, but didn't suit their needs for now.
And then... Turns out we were right.
Along came the big price cut, with this language added up front, all caps, to the beginning of the listing:
"PRICE IMPROVEMENT OF $300K FOR CONTINGENT SALE!!"
Since, in today's world, everyone wants to see more transparency on commissions, we can also mention something else. When this listing first emerged, the sellers & sellers' broker were offering a 2.0% commission to buyers' agents. Commissions are always negotiable, but that buyer agent fee was below what has been standard in Manhattan Beach for a long time.
With the change in price, they also increased the buyer agent fee to 2.5%, the more typical fee offered on local listings. (MBC displays the commission offered to buyers' agents on all listings, as is permitted under the MLS rules.)
So at once, they're trying to attract more buyers with the price, and more buyers' agents by offering full-fare, typical commissions.
(There is really no evidence that any buyer's agent has refused to show or offer on a listing that offers lower fees, but we'll probably never convince you, plaintiffs' attorneys or the federal DOJ, since common sense appears to argue the opposite.)
As we said recently of a different listing, anyone can start out too high, for any reason.
The question is what you do about it.
If you have a contingent offer under contract, the question is also when you do something about your high price on your listing.
Really fast is the best answer to "when," like here on 10th St.
Root for 'em!
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UPDATE: Unfortunately, the strategy didn't work, the upleg fell out of escrow and the listing for 1707 10th was canceled.
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.
