Recently a seller (through their listing agent) was justifying their full-price counter-offer with a pending model-match that they said was in escrow at $15,000 OVER its list price.
The pending listing was in an inferior location and had no obvious features that would compel someone to pay over list price. It had been on the market for almost 3 months, was ‘re-freshed’, and then still took another month to find the buyer.
Last week it closed for $42,000 UNDER the list price.
1. If it ain’t closed, it doesn’t count. There could have been an excited buyer in the beginning who got suckered into paying over list, but when the market is getting a little crumbly around the edges, buyers are more likely to come to their senses a few days later. However, that seller had likely told his neighbors about his good fortune by then, and the braggadocio spreads quickly.
2. There are a lot of new agents. Since the frenzy began, over 50,000 real estate licenses have been issued in the state. These agents have only known a frenzy condition, and are used to telling their buyers to offer over list. But they haven’t had much experience with keeping a deal together.
3. Revelations about the sale are not required to be disclosed in the MLS. There is a ‘Concessions’ box in the MLS for listing agents to complete when marking a listing sold, but it’s a suggestion, not a requirement.
Regardless of what actually happened, once the sales price is published, it becomes the #1 fact that buyers will use to make decisions about what to pay for the next house. Zillow and the other portals don’t have an ‘excuse box’ for anyone to clarify what happened in a sale – and if they did, buyers would still want to shrug them off.
Putting a value on an house is an inexact science, and everyone has a different opinion. Future buyers will always look to skew down the value of the comps – even if there was a good explanation for a low sale, it won’t get full traction.
Get good help!