Quit underpricing your homes!

"Neil drives a beetle and a fancy beetle" (1500sand535) 02/08/2018 at 16:13 • Filed to: None

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(New house on MLS)

Thoughts-“it’s in the neighborhood. Ooh brick. Nice Garage. Perfect city inspection. It’s from the 50s so central heat and air. Asking is Exact midrange of our budget so we can offer $10k over and be freaking done. Wait a minute... Seems big for the price, it’s underpriced by $5 or so... might have to offer $15 over to seal the deal. That’s okay, that’s okay; we can finish this within four budget.”

(Get comps from realtor and it’s more like $10-15k under market)

“Bahhhhhhh, no you a-holes. Now I’m going to have to offer $20k over asking just to be in the consideration. That’s so tight on the budget. Plus you are going to feel artificially confident because anyone within spitting distance of your asking is going to come look and probably not realize how underpriced it is.”

Damnnnnnnnnnnnnnnnnnnnnn

fintail > Neil drives a beetle and a fancy beetle 02/08/2018 at 16:34

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Isn’t this the strategy to create a bidding war?

That’s how they do it in Seattle (and Vancouver). List for 50-100K under market, end up at 100K over market due to speculative animal spirits and the like.

Dr. Zoidberg - RIP Oppo > Neil drives a beetle and a fancy beetle 02/08/2018 at 16:39

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Very few homes here are price at “value.” They’re intentionally listed lower to get more interested parties. They get you in the home, someone says, “We HAVE to get this house!” The budget is thrown out the window, there’s 12 offers, and then I lose. Err, other people lose.

Galileo Humpkins (aka MC Clap Yo Handz) > fintail 02/08/2018 at 16:49

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Damn, 50-100 below?! I feel like I usually see 10-20 below to start a bidding war.

BrianGriffin thinks “reliable” is just a state of mind > Neil drives a beetle and a fancy beetle 02/08/2018 at 17:11

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You people and your west coast problems. Houses here are generally $25-50k overpriced. Actually they’re like 100k overpriced, but ya know.

fintail > Galileo Humpkins (aka MC Clap Yo Handz) 02/08/2018 at 17:16

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It might be closer to equal in terms of market value. In the county where I live, the median price is now over 600K, and in some zipcodes, 600K won’t get you a vacant lot.

Galileo Humpkins (aka MC Clap Yo Handz) > fintail 02/08/2018 at 17:32

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Here, in Chicago, the median price varies a lot by zip code - plus we have a surplus of houses for sale - so maybe that also has something to do with lower than, but close to, market value pricing. If they price it too low, it would have it’s fair share of risk.

fintail > Galileo Humpkins (aka MC Clap Yo Handz) 02/08/2018 at 17:36

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It varies here, too, to a point, but most everywhere that isn’t a real mess has become insane, and even many “up and coming” areas are now somewhat unrealistic. But no surplus here, and a lot of odd factors at play (sketchy offshore money, tech transplants, still a flow from California, etc.)

Galileo Humpkins (aka MC Clap Yo Handz) > fintail 02/08/2018 at 17:50

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Pretty similar with regards to a lot of areas here have pricing that is unrealistic/ridiculous. For example, we bought our place (2400 sq foot duplex down, detached garage, 3 bed/2.5 bath, built in 2006) in 2016 for $505K. A few months later they completed construction on a nearly identical building 4 doors down from us.

They’ve tried selling (asking about $675K for a comp to ours, or $525K for a 2bed/2.5 bath) and renting (asking $5800/month for comp or $4500/month for 2bed/2.5bath). Both rent prices are at least $1K above average for comparable places for rent in this zip code.

After 18+ months, only one unit is occupied, not sure if bought or rented. I believe they’re back to trying to rent them, and I’m hoping they’ve lowered the prices because they didn’t make sense at all. Not to mention, we have a front and back yard and they don’t.

It’s the Chicago real estate equivalent of an “I know what I have” Craigslist ad. Also shows how inconsistent the home prices here are.

Neil drives a beetle and a fancy beetle > BrianGriffin thinks “reliable” is just a state of mind 02/08/2018 at 20:44

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I used to be out west. I’m in MN now. Mostly these shenanigans happen for us poors shopping the 200-225 range. Which is awesome.

Neil drives a beetle and a fancy beetle > fintail 02/08/2018 at 20:45

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It is to create a bidding war. But when 60% of houses do it; you play the shitty game it is.

Neil drives a beetle and a fancy beetle > Dr. Zoidberg - RIP Oppo 02/08/2018 at 20:50

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I’ll be honest we broke down for this house and put family on notice we may need a little help(which we have fought so hard to not do). But it’s all brick, with a double freaking garage with a fire place in it. Ughghhh if I could offer $240 I woulda but I got a butt load of student debt and a kid. So if this don’t happen I’ll keep looking but I’ll be pissed cause we offered $25k over asking and only 1.5% seller paids. And getting 2-3% seller paid is still pretty standard around here.

fintail > Neil drives a beetle and a fancy beetle 02/08/2018 at 21:17

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Or find an overpriced listing and buy it, or just don’t buy :)

fintail > Galileo Humpkins (aka MC Clap Yo Handz) 02/08/2018 at 21:21

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Do you own the whole duplex and live on the lower floor, or just have the lower floor? Duplexes are not so common here - land is at a premium, so “affordable” housing tends to be condo or townhouse, unless you want to live in a demilitarized zone or have a 2 hour each way commute. In my zipcode, you won’t find a very habitable detached house for under 7 figures (hence why I live in a <600 sq ft box). If I wanted a house in my price range, I’d often have 2-3 hour commutes.

Because of the lack of land within reasonable commuting distance for most people, there’s no surplus of housing where anyone really wants to live. Everyone “knows what they have” here, I don’t think there are legit bargains.

Galileo Humpkins (aka MC Clap Yo Handz) > fintail 02/08/2018 at 21:47

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It’s a 3-Flat building. Simplex on floors 2 & 3, we have a duplex down on the first floor, it’s not split into separate spaces in that way. We own it all and use it all. Future goal is to buy out our upstairs neighbors and convert the building to a 4 floor single family home.

Damn, 2-3 hour commute is nuts. No bargains, crazy prices, that’s the literal real estate definition of stuck between a rock and a hard place.

fintail > Galileo Humpkins (aka MC Clap Yo Handz) 02/08/2018 at 23:17

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Do you own the building or your floor? That type of housing stock is virtually unknown here, I think it might be an upper midwest thing. I haven’t really spent time in Chicago, I am only familiar with the tony areas on the north shore, as being John Hughes movie filming spots.

Home ownership just isn’t a thing for many normal income people in the Seattle area, especially singles or those without family help.

Galileo Humpkins (aka MC Clap Yo Handz) > fintail 02/08/2018 at 23:49

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We own just our unit (two floors). Each unit is technically a separate property. This kind of building is exceedingly common for Chicago. In fact, a damn ton of them got built in the ‘boom’ pre-2008 crisis. But, they’ve been common here for a long time. Fun kind of fact: if/when we were/are to purchase our two upstairs neighbors units, getting this officially changed to a single family property is exceptionally difficult and exceedingly expensive. The city frowns upon people doing that, even when there is a surplus of housing.

My wife and I have considered moving to Seattle but found what you’re saying to be true. In our budget we’re limited. In fact, her former co-worker lives in Seattle. I couldn’t tell you any specifics about her situation or place, but from what I understand she was priced out of buying very quickly and had to overpay for a smaller apartment. All worked out in the end, I guess, she’s moving to Minnesota where shit’s pretty cheap.