You’ve been waiting patiently for the right house – preferably an older home with character.
One that’s been well cared for, and if it were on a canyon lot, great.
You see a video on the internet of a new listing in University Heights, which doesn’t have the refinement of Mission Hills, but is still a pretty good neighborhood. The last sale on the street was the house next door, which sold for $735,000 in 2008. So even though the list price of $799,000 seems high, you reluctantly decide to join the bidding war.
But someone with more horsepower blows up the field.
The house on Arch just closed for $900,000 cash, and 13% over list price.
http://www.redfin.com/CA/San-Diego/4448-Arch-St-92116/home/5286660
Hat tip to our friend Auntie Agent, who was involved with the sale: “Good listings in that area are SO limited. The house is nice but nothing overly special, it is just its siting and location in the neighborhood. It is so highly prized in that area and being on the canyon just brought buyers out in droves creating the frenzy that propelled the price skyward.”
O.K., so someone with more money overpaid for the house. The solution if you are a buyer? Don’t get sucked into a dumb bidding war.
This tactic simply doesn’t work with me. The instant an agent tells me we’ve “had multiple offers,” or I need to “move fast,” or there’s a lot of “traffic,” my first internal reaction is to be skeptical. Maybe lots of people want the house. Maybe they don’t. Perhaps no one has made an offer in months.
My second reaction is, if you truly have lots of action on the listing, good for you and good for the seller. Those people can have the house. Because I won’t be cajoled into rushing a deal on the unverified representation this particular property has lots of “interest,” “action,” “traffic,” “offers,” etc.
And a postscript: time and again I’m told a particular property has lots of interest and I need to BUY NOW. Yet months, and even a year later in a few cases, there’s that same property, for sale, often with a price reduction. Hence my default position is to simply ignore any chatter about a feeding frenzy, because in the very very remote chance there really is a frenzy, I’m avoiding it. Period.
Maybe I’m just closeminded, maybe the house has a view to kill for, but I just can’t imagine paying more than $400k for an University Heights address. I know the house is kinda up in the canyon side away from the hustle and bustle of El Cajon Blvd. but still.
But then again, I’m not thinking like a guy with $900k burning a hole in his pocket with a strong desire to be a bike ride away from Hillcret.
@ Rich. You are right ! The moment any real estate agents say there are mutiple offers close to asking prices, I just stop looking and walk away.
The passion is palpable on premier properties priced with precision.
(just watched Mr Popper’s penguins)
Jim, did you see this?
http://blog.redfin.com/orangecounty/2012/03/redfin_brings_transparency_to_title_inspection_mortgage_in_orange_county.html
Any thoughts?
Guys, clearly you didnt read the listing agents notes regarding the walls stuffed with cold hard CASH and newspaper insulation from the 1920s! lol
The listing agent is right about that area. Nothing particularly mind blowing about the house itself, but there are VERY limited spots along that canyon so close to the 163.
Granted 900k does not seem justified to me. You just REALLY want to live in UH to pay that. Maybe its a local business owner that wants to ride their bike to work everyday.
Thanks for the follow up JtR.
Rich and Rc,
Thanks for staying out of the bidding wars – keep spreading that around!
I second Jim’s sentiment. You should tell everyone you meet that they’re overpaying in this market if they’re in a bidding war.
I need less competition.
Chuck
$900K??? That ain’t no regular mustard, that’s some Grey Poupon right there.
Cool, people are still overpaying. That means more unwinding to come.
Did someone overpay, or did we overpay?
During the bubble I couldn’t believe people were overpaying so much for houses, but then I found the joke was on me – they didn’t pay for the house with their money!
Anxious, emotional buyer definitely overpaid for that one.
I think the buyer overpaid for this. There is something called “Value in use” in the Appraisal field, the idea being that a certain property may have a much higher value to a particular person than to any other buyer,here? I was only involved in one bidding war last year and my client won it. It was a one of a kind and very nice piece of property and one of the losers has subsequently offered my buyer $50k more than they paid for it. That is a rare situation. Once the price exceeds what YOU think is fair,walk away.
Ha Ha..in my opinion, this way too much for such a house.. but what do I know. I recently saw a Zaha Hadid designed 900 ft2, 1 bedroom condo goes for over
US $ 1 million in Singapore.