Friday, October 17th, 2008 at 11:47 AM
Circus Time
Two people have already inquired about the new listing of a 5br/4ba, 3,492sf house on Grivetta in SW Carlsbad. It came on the MLS yesterday at $550,000, or $158/sf.
It’s at the end of the street where it backs to open space, and it probably has the least impact from the I-5 freeway as any house in the tract.
The same model on Gabbiano is pending, listed at $735,000, and the flipper we saw on Whimbrel a block away just closed his 2,888sf house for $757,000 on 9/29/08.
List price of $550,000? What gives?
It’s a short sale, and the loan is over $700,000. According to the MLS, the agent already has an accepted offer, and he included this note; “now accepting backups”. I called, but had to leave a message, and of course, no call back so far.
This is happening more and more; agents are listing properties that are underwater, and because the seller has nothing at stake, putting an ultra-low list price on them. Then they either put them on the open market – creating a frenzy - or they snag their own buyer and open escrow.
Those agents that input them after the fact, like this guy, aren’t doing their reputation among other realtors any favors. Do you think I feel like having this guy sell my listing, when he won’t let me have a shot at selling his?
Either way these homes are marketed creates more frustration with the buyers. There are a lot of people that wouldn’t mind buying this house for $550,000 – when new it sold for $411,000 in 1998.
But hardy har-har, the listing agent already sold it.
The take-away sales gimmick can drive buyers crazy, and could backfire in the coming months and years. If buyers get fed up with the sleazy nature of these practices, they’d have another justification for not buying.
If buyers are willing to endure, it could cause a much swifter downdraft in pricing, and limit the overshoot. If the banks approve these low sales, we could see quick stepdowns in pricing. For those of us that would prefer to take our medicine and get on with it, we might see the speed pick-up. If this one sale caused more 3,400sf houses in Aviara to sell in the $500,000s, we’d be seeing the end of this a lot sooner.
Update – the agent called back and said they already have a negotiator at GMAC who has given them some reason to think that the $550,000 will get approved. He said he was approached by the buyer as he was pounding his sign in the front yard.
They are having open house Sunday from 1-4pm for some reason.
Posted on Friday, October 17th, 2008 at 11:47 AM in Listing Agent Practices | 13 Comments » | 
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While it is sleazy to list something that’s already been sold, I really hope the sale goes through since it will motivate sellers (and most important banks) to adjust to market conditions and start pricing things to sell rather than sit on the market. It’s not as though we’ll be seeing an economic boom anytime soon to have . . . .
Hoping to Buy | October 17th, 2008 at 12:13 pmAgreed, this is sleazy but if approved it’s going to move houses. These days first thing I check when I see a good deal is if it’s a short sale. On short sales, if the price is too good it’s just a teaser. The price has to be right on a perfect house to get a second look from a serious buyer. Otherwise it’s just a waste of everyone’s time.
BDiego | October 17th, 2008 at 12:56 pmThere are a lot of Refi/Cash-out junkies living in Aviara…more of these deals to come! People who owe hundreds of thousands more than they paid initially in the late 90′s. I lived there for 5 years…most homes were all 300-400k. heck, even some in the high 200′s!
doughboy | October 17th, 2008 at 1:05 pmCircus or not, I would buy this house for $550K.
I’m one of the biggest bubble sitters, but in my book, that’s a good deal. Plain and simple.
We’ll see if the bank really will take that price.
Chuck Ponzi
Chuck Ponzi | October 17th, 2008 at 1:08 pmFor those thinking of buying and want some help in this area, contact me. My last two non-REO closed sales were of this exact nature – creating a sale where there wasn’t one, neither of the two properties were on the open market.
But I represented the buyer only in both, and had no obligation to the seller to expose his property to the entire marketplace (both sellers had their own agents).
The ones that bug me are the listing agents that have the fiduciary duty to the seller, but then kind of forget that part once a buyer walks up.
Jim the Realtor | October 17th, 2008 at 1:13 pmI just bought a short sale (well two months ago) and we are closing in two weeks. The bank discounted 150 on a home that once sold for 1.1 mil. The process took a long time (imo) and we never heard any updates which drov eus crazy. The final sales price is 700k even. We actually were the third highest bid as tow others bid 760 and 770k. However, we offered cash and the bank took ours.The others needed to qualify for financing.
psmith | October 17th, 2008 at 1:51 pmHe is lying. no way he sold it while pounding the sign in. i no believe!
oh brother | October 17th, 2008 at 3:11 pmIt’s possible, at that price. But what happens if, now that it is on the market, other buyers offer way over that low asking price? Can a back-up offer push the original offer aside because of the fiduciary duty to the seller and all?
Simone | October 17th, 2008 at 3:55 pmAny possibility that the Realtor in question personally knows the buyer @ $550,000?.. who may then turn around and flip it to $730,000??? Sounds a bit shady to me. Put it out on the market for 1-2 week(s) and see what the bids are.. but than Realtor’s buddy would not be able to get a quick $180,000 on the flip! I wonder what the bank would think to this…
ucodegen | October 17th, 2008 at 4:15 pmpsmith,
So you put in an offer and it took two months before the bank gave you any updates?–you just waited? How patient you must be! I hope you love the house. It would drive me crazy, too–but I’m not sure I would be hanging around for that long….
Good job on the cash deal–I think that’s going to be the way to go and get the bank’s attention these days.
shoppingaround | October 18th, 2008 at 7:23 amThose agents that input them after the fact, like this guy, aren’t doing their reputation among other realtors any favors. Do you think I feel like having this guy sell my listing, when he won’t let me have a shot at selling his?
Whoa, back the truck up!
It is a realtor’s job to present all offers to his client – not to pick and choose which he submits based on how well he likes the buyer’s realtor!
Lord Selkirk | October 18th, 2008 at 9:23 amThanks Lord, but I’ll present his offer.
I just closed one with the agent who is #1 on my all-time hate list. My point was that this is a cooperative business among agents, and their reputation precedes them. If they are known to sand-bag their listings, it doesn’t sit well.
I can’t stop him from making an offer on my listing, but I’ll think twice about making one on his. If he is willing to sell-out his own client, what is he willing to do to mine? Is that the right situation for my client? Only if we can get a good price, and control it to the finish line.
Jim the Realtor | October 18th, 2008 at 11:21 amIsn’t there some adjective in the contracts about realtors are to present the seller with all “sensible (bonafinde? realistic? something?!?) offers” ? And that gives realtors some “flexiblity” to not present trash toi you? (But one man’s trash is another’s treasure?”)
shoppingaround | October 19th, 2008 at 12:12 am