The astute observers can pick out the suspicious deals from a mile away. But how do they play into the decision-making on the street? How can you capitalize on the extra knowledge?
If there was an area that had a bad comp but had more good comps and was generally free of foreclosure activity (i.e. older areas), you might want to try to leverage the shady comp to justify your lowball offer. But beware in areas that are ripe for future foreclosures (i.e. tracts built at peak), because those short-sale and REO listings are likely to be listed at a price that considers all sales as normal:
After weathering the fear of federal prosecution and competition from drug cartels, California’s medical marijuana growers see a new threat to their tenuous existence: the “Wal-Marting” of weed.
The Oakland City Council on Tuesday will look at licensing four production plants where pot would be grown, packaged and processed into items ranging from baked goods to body oil. Winning applicants would have to pay $211,000 in annual permit fees, carry $2 million worth of liability insurance and be prepared to devote up to 8 percent of gross sales to taxes.
The move, and fledgling efforts in other California cities to sanction cannabis cultivation for the first time, has some marijuana advocates worried that regulations intended to bring order to the outlaw industry and new revenues to cash-strapped local governments could drive small “mom and pop” growers out of business. They complain that industrial-scale gardens would harm the environment, reduce quality and leave consumers with fewer strains from which to choose.
“Nobody wants to see the McDonald’s-ization of cannabis,” Dan Scully, one of the 400 “patient-growers” who supply Oakland’s largest retail medical marijuana dispensary, Harborside Health Center, grumbled after a City Council committee gave the blueprint preliminary approval last week. “I would compare it to how a small business feels about shutting down its business and going to work at Wal-Mart. Who would be attracted to that?”
Oakland’s four retail marijuana stores did $28 million in business last year, and if sales remain constant, the city would get $1.5 million this year from a dispensary business tax that voters adopted last summer. A similar tax on wholesale pot sales from the permitted grow sites to the dispensaries would bring in more than twice that amount, the city administrator’s office has estimated.
LOL, yeah, allowing legalization will lead to even more unemployment for small business.
Good point. Those look like pretty good values at 600K.
I forgot to mention the other low comp on Lapis, the 4,193 square footer that sold for $815,100 without ever hitting the open market ($194/sf).
When you put several of these questionable deals together in the same neighborhood, it means one thing – La Costa Greens is $200/sf or less, until further notice.
At end of video: voice over “I’m Jim the Realtor”.
Fixed it for you.
“Shady deals” drove comps on the way up, and everyone used those sales to determine credit limits for cash-outs and HELOCS without any problem. Funny how nobody (but us bears) was complaining about the fraud then.
Also, it seems that “seller concessions” are included in the recorded prices, too (in the MLS, at least), but nobody complains that prices are being artificially inflated by 3-6% (or more).
Now, the “shady deals” for lower priced homes are supposed to be excluded when buyers are comping nearby homes. Quite frankly, these lower comps are more valid than than the artificially higher ones, especially when one considers all the artificial housing props used by the Fed, banks, and govt entities.
Just saying that how housing values are determined depends greatly on which side of the fence one is sitting. As a buyer, I’m always going to look at the lower comps as valid comps. There is so much fraud propping up prices right now, if it takes fraud to unwind the fraud that’s pushing prices up, so be it.
But how do you convince sellers to consider the low camps as valid? Do buyers just wait and hope no one pays their asking price (that is based only on higher comps)?
Do buyers just wait and hope no one pays their asking price (that is based only on higher comps)?
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That’s certainly what we’re doing. Not saying it’s going to work out for us, but we see no other option. We absolutely refuse to overpay just because sellers want buyers to cover for the sellers’ foolishness during the bubble.
Of course, we do have to accept the fact that this might make us “perma-renters” if things don’t work out as we anticipate.