Back to 2003 Prices in the Heart of Lakeview: 3232 N. Halsted
This 2-bedroom unit at 3232 N. Halsted, or Plaza 32, in Lakeview is in a mid-rise building that was, I’ve been told, at one time so popular that there was a wait-list for future buyers in the building.
It is one of the few doormen buildings in Lakeview that is not on or near the Lake.
Built in 2000, Plaza 32 has 130 units and the building has underground parking.
Currently, 12 units are for sale.
This 2-bedroom unit has 1419 square feet and southeast corner views.
It is priced just $5,000 over the 2003 purchase price.
The kitchen has granite counter tops and stainless steel appliances.
It also has the other bells and whistles the buyers look for including central air, deeded parking and washer/dryer in the unit.
Mary Blackburn at The Real Estate Group has the listing. See the pictures here.
Unit #H201: 2 bedrooms, 2 baths, 1419 square feet
- Sold in November 2000 for $216,000
- Sold in September 2003 for $374,000
- Originally listed in May 2010 for $419,000
- Reduced
- Currently listed for $379,000 (parking included)
- Assessments of $501 a month (includes, heat, a/c, doorman, cable)
- Taxes of $4657
- Central Air
- In-unit washer/dryer
- Bedroom #1: 15×12
- Bedroom #2: 11×12
I still own a unit in this building and although I never have lived here, I can tell you that the building is AWESOME. It is one of the only buildings in Lakeview that has garage parking, 24 hour doorman, and an extremely nice private park. It has EXCELLENT management and the people who live here are extremely professional. It is truly one of the best kept secrets in Lakeview. AWESOME AWESOME place – seriously, check it out.
A wait list? Seriously? I owned a unit here and, although I sold it relatively quickly, I don’t recall buyers outnumbering sellers. Nevertheless, I agree with Clio, it was a nice building.
Was that 2000 sale an early pre-con (or friends and family) price, or was that the prevailing sale price for these places? Because at that price, I understand why it was in high demand.
Question for the Cribbers,
Say you find a house you really, really love. It has almost everything you are looking for in the neighborhood you desire to live. Now the asking is price is X (let’s say $500K just for kicks). The most optimistic comps say a similar home should sell for $375K (by similar I mean apples for apples, oranges for oranges). But the seller will not come down one penny. Has turned down offers for $495K!
Now, say you can afford their price without significant sacrifice. By that I mean, you can still eat, save for retirement and go out to nice dinners but maybe you wouldn’t be able to take an exotic vacation for a while.
Do you walk away or buy the house? Why or why not?
Walk away. As much as you love it, when you try and sell it at some point, the market will bear out the true price of the property and you’ll be hung out to dry.
Whether it’s houses or women — never settle!
“Walk away. As much as you love it, when you try and sell it at some point, the market will bear out the true price of the property and you’ll be hung out to dry.”
You like it $125k more than the comps? Can you afford to spend $125k for (lets say, just for kicks) paint color? If both are yes, and you are confident (a) you’ll be happy with it, the way it is today, for quite some time (5, 7, 10+ years) and (b) you’ll continue to be able to afford it w/o significant sacrifice (meaning, in addition to cashflow, you won’t stew over the $125k or the foregone vacations), then why not? You’ll spend the money on something, may as well be the “perfect” house for the next 10 years.
Icarus,
If it is a house that you will stay in for awhile (at least 7 years) and you really like it, I would buy it. I have seen so many people bargain hunt and end up w/ a place they didn’t really like because they got a great deal on it. They are miserable. I would buy it and do NOT feel stupid about paying what you consider a “premium”. Life is about enjoying yourself, not getting the best deal and hoarding money!!
“Was that 2000 sale an early pre-con (or friends and family) price, or was that the prevailing sale price for these places?”
Those were pre-construction prices and, in 1999-2000, new buildings/new construction properties were still a relatively unknown entitiy in this area (therefore prices were very low). Had this building been built in 2005, I bet even the pre-construction prices would be much hight.
Icarus:
1) The house will never sell at $500k, so if you have patience, the sellers will eventually have a come to Jesus realization and drop the price.
2) If you need financing, the bank isn’t going to lend above the appraised value which is likely going to be $375k. The only way you would be able to buy it at $500k is if you bring in the difference.
3) It makes no sense to over pay by $125k just because you like the house and can afford the payments. There are plenty of properties to choose from.
I agree with EJ but a dream house should be the house you are going to live in the rest of your life, not strickly an investment.
I have said it numerous times on this time, a house is worth what you are willing to pay for it. Regardless of comps etc…if you think the house is work a half-million then go for it!
“Say you find a house you really, really love. It has almost everything you are looking for in the neighborhood you desire to live. Now the asking is price is X (let’s say $500K just for kicks). The most optimistic comps say a similar home should sell for $375K (by similar I mean apples for apples, oranges for oranges). But the seller will not come down one penny. Has turned down offers for $495K!”
How sure are you about the comps? If there are recent comps that are truly apple for apple, do you have any reason to doubt that another place will come buy that you can pick up easily for e.g. $400K? If that’s really true, I’d say wait for that place. If that’s not true, maybe the $500K place has something extra and if it’s worth it to you and you’re comfortable financially with it, then my short answer is why not! My longer response would inquire into your timing etc. How much urgency to buy now and how special is this house?
Interestingly, Unit H401 (same exact unit 2 stories up) sold in less than 2 weeks for 430k in DECEMBER, 2009!!! The price on this current unit (H201) is a bargain basement price = someone who is smart will hopefully realize this and snap it up.
That’s about a 30% premium. I’d say pay the premium over the comps if it’s only 10-15% more at most. Otherwise, you will lose out quite a bit. In addition, your RE taxes would likely be higher as well, than if you paid at the level of the comps.
Also, Clio if you own a unit in the building, why are you trying to convince others to buy in? To enhance the value of your unit as well?
“Also, Clio if you own a unit in the building, why are you trying to convince others to buy in?”
Actually, I don’t need to convince anyone of anything. The building and unit will do that themselves!! Sersiously, at this price point in this location, this IS probably the best deal.
The residents of this building are GREAT. Really really nice people who are incredibly professional. Many of the residents travel for work and love the security of being able to walk out of the condo and not worry about it.
Most units (maybe not this one) are decorated to the extreme with tens of thousands of dollars spent on upgrades. If I liked this area and worked in the city, I would definitely move into my unit!!
“If I liked this area and worked in the city, I would definitely move into my unit!!”
Aren’t you worried about this area backsliding into it’s “scary” 70s/80s state? Or does that risk only start west of Sheffield?
kewl a place with a grand piano and bongos (i’m sure they are the most popular people on the floor)
“Aren’t you worried about this area backsliding into it’s “scary” 70s/80s state?”
I don’t think that is going to happen. If you look at the real estate in this particular neighborhood, it is (and has been) quite ridiculously expensive. Most of the people who live in this neighborhood love it and are not going to move. These are hard working upper middle class families who are very secure – not a transient neighborhood by any standard.
“I still own a unit in this building and although I never have lived here, I can tell you that the building is AWESOME. It is one of the only buildings in Lakeview that has garage parking, 24 hour doorman, and an extremely nice private park. It has EXCELLENT management and the people who live here are extremely professional. It is truly one of the best kept secrets in Lakeview. AWESOME AWESOME place – seriously, check it out.”
Clio, I don’t mean this in a snarky way at all, but are you talking your book?
The unit is “worth” the Sept 2000 price, where by “worth” I mean intrinsic value. At $220K an all cash buyer can get a decent cap rate renting it. Don’t matter where prices goes from there, you’ve got a good investment and don’t have to think about selling it. Will it ever drop to its “worth”? Very very very unlikely. However, let’s be clear that when you pay more than intrinsic value you’re speculating that the next guy will buy it for an even greater markup over intrinsic value. As we’ve all learned in the past 10 years, the speculative portion of the price can change rapidly for better or worse.
Is the price a bad bet (vs investment) in this case? I like this building. But with 12 of 130 units currently listed for sale I’m not sure it’s a good bet. I don’t think it’s crazy to think that there are another 10-12 units that owners wish they could sell but have held off the market. That’s a lot of inventory to clear.
“I don’t think that is going to happen. If you look at the real estate in this particular neighborhood, it is (and has been) quite ridiculously expensive. Most of the people who live in this neighborhood love it and are not going to move. These are hard working upper middle class families who are very secure – not a transient neighborhood by any standard.”
I was making specific reference to your comments about the Fletcher condo (or house) over in BelPort, about which the same could be said.
I understand what you are saying Marc, but my point is that the place is a great place for someone to LIVE in (not as an investment property). It offers advantages over any other building in the area which will keep its prices higher:
– 24 hour doorman – EXTREMELY secure. this is the reason many single women live here (not being sexist – this is what they told me).
– beautiful private landscaped park – an absolute wonderful oasis in the summer
– secure garage parking – great garage with pretty big spots and good layout. several units have 2 spots. this is a HUGE bonus in this area.
– great common areas – very nicely done and elegant.
– AWESOME management. Not only is the management company great, but the live -in head manager is truly one of the best people around. He takes his job so seriously and is so anal about everything that the building always is spotless and beautiful.
Anon,
I understand your point – but I think that the huge advantage this neighborhood has over BelPort is the number of restaurants/bars and extremely easy access to the elevated train station and LSD/lake. I have never had any problems renting out my unit for top dollar.
Off topic, but I am hoping that someone can explain what it means when an ad says, “sold “as is” buyer is exempt from disclousure.”
Thank you!
You can’t knock someone for trying to enhance their building’s value (unless, of course, it’s 1000 LSD). At the end of the day, the market will be the deciding factor.
Ugh. Looks like a retirement/assisted living community that belongs in Deerfield.
Great responses everyone, compelling arguments for both sides.
@barry, good point though I should have said that this would be the “forever” house (barring unforeseeable circumstances) and it might fetch $500k in 2050 dollars.
Anon and Clio, excellent angle I didn’t consider.
Russ, that pretty much makes the decision for me as I don’t have down payment + additional $125K lying around.
alas, the owners want to get back every penny they put into the place so they probably won’t have a Jesus realization.
Icarus, I recently jumped in and bought a single family. Watching comps in my neighborhood over the last few months I’m now pretty sure I overpaid a little. But I honestly don’t care. I love my house. I wasn’t looking to time the absolute bottom of the market (a fool’s errand in any market, including housing). After two years of looking, I knew this was the house the minute I walked in. I’ll watch the market drop from the comfort of a house I love. If you love the house, negotiate the best price possilbe and pull the trigger.
“If you love the house, negotiate the best price possilbe and pull the trigger.”
“Russ, that pretty much makes the decision for me as I don’t have down payment + additional $125K lying around.”
If the round amounts you’re talking about are in the ballpark of the *actual* amounts, they won’t sell it to anyone w/o reducing (or until there is significant inflation) b/c they just won’t get it to appraise out and people looking in that price ballpark are either in the same boat as you or *very* unlikely to put another 25% equity in.
Icarus,
A coworker of my wife recently went through a situation similar to yours. They were in love with a townhouse and decided to buy it no matter what. The appraisal came in about $50,000 under their offer and they decided to pony up the difference at closing (the bank really wasn’t willing to lend above the appraised value). That wiped out their savings.
Now they have a newborn baby and his wife wants to stay home full-time. And other townhouses in their neighborhood have sold for $75,000 less. He hates his job. But they are stuck. It’s not a good situation.
“I don’t have down payment + additional $125K lying around”
I wouldn’t put myself in a situation where I would be substantially underwater right away without sufficient liquidity to cover it, even if I could afford the payments. Maybe your job and personal situation are EXTREMELY secure and predictable, but it would make me very nervous.
“But they are stuck. It’s not a good situation.”
In my “pull the trigger” advice I should have specified – but don’t pull the trigger if you’ll go broke doing so.
“In my “pull the trigger” advice I should have specified – but don’t pull the trigger if you’ll go broke doing so.”
2. But I think it was *strongly* implied.
I think overall it’s a bad idea to pay 30% more than the comps for anything. The sellers will just hold on it and another property will come along. Lots of sellers are oblivious to what the market is doing and are not reducing their price at all. Genius move on their part, as their place will not sell.
I would suggest putting in a offer if its a house that you really love and will live in for a long time. People pay a premium for many things in life (vacations, cars, college, beer, golf club memberships, etc) that others could never fathom in a million years (as shown here on CC).
Let’s say the appraisal comes back really low as anticipated. The sellers now have reason to reconsider their bottom line, as there is evidence that the home is over-priced and would never sell at the current ask to ANYONE.
Now you are in a position to bargain with the sellers – that may be their Jesus moment. (or they just might take the home off the market instead)
Icarus,
Why don’t you ask the owners if they will do a contract sale or finance the house themselves. This would be a win-win situation. Basically, you agree to the 500k price (or whatever price negotiated) and start paying the owners 5% interest (or whatever interest negotiated). You agree to get a conventional mortgage within 3 years (or whatever time period negotiated). This way, the owners have security knowing that there is a potential sale and are getting a monthly income. You benefit by owning the house and in 3 years, if things really don’t turn out the way you want, just walk away. This way, both parties can have their cake and eat it too!!!!
I never understand the doorman = safety math. Generally I do not think a doorman adds any feel of safety. If anything quite the opposite, instead of just neighbors who can be aware of my coming and goings, I have a man (typically) who knows my coming and goings through video, badge logs, etc. He knows who is in my condo, when I am alone, when my place is vacant for long periods of time, etc. And unless I am wrong, I don’t think there is usually a very heavy screening process for doormen.
And to Icarus,
If you like it, make an offer and see what the bank’s appraisal comes back at. It might take the appraisal coming in for the sellers to realize what they can truly get for their house. And by the time that happens – 2 or 3 weeks into the process – the seller will likely already be “out” of their house and potentially more willing to take less. I would also check out ccrd.info to see how much they owe on the place – is it that they just want a lot of profit or do they owe that much and not have any of their own cash to put into it.
amendment: The sellers now have reason to reconsider their bottom line, as there is evidence that the home is over-priced and would never sell at the current ask to ANYONE (who requires bank financing and who also can not bring a premium down payment to the table)
Dont put much stock in appraisals. My buddy’s place in 1720 s mich (sloop) 2/1, ~900 sq ft + parking, facing west on the 27th floor w/no balcony just appraised at 325k – from a purchase price of 290k.
“My buddy’s place in 1720 s mich (sloop) 2/1, ~900 sq ft + parking, facing west on the 27th floor w/no balcony just appraised at 325k – from a purchase price of 290k.”
Appraiser was from Manhattan?
Right!? that is what I am saying. (correction: faces south)
“My buddy’s place in 1720 s mich (sloop) 2/1, ~900 sq ft + parking, facing west on the 27th floor w/no balcony just appraised at 325k – from a purchase price of 290k.”
I guess nobody told his appraiser that your buddy had gotten CMK’d.
“I never understand the doorman = safety math.”
The math is quite simple: doorman = safety.
Seriously, though having a door man IS a great saftey feature for many reasons (and is incredibly convenient):
1. He controls who gets into the building (in non-doorman buildings, residents sometimes leave the inner door open allowing anyone access).
2. He observes any potential dangerous activities and notifies the appropriate parties – I personally have been called by my doorman on 2 occasions when my tenants were having loud parties. This avoided a call to the police, etc.
3. He is a “go-to” guy for residents in the building if THEY have any concerns.
4. He can open the door for you when your hands are full.
5. He can accept packages/deliveries or let delivery men/cable guys into your unit.
The list goes on and on… but, trust me – once you have a doorman, you will never go back…
Overall, a great investment for
you forgot to mention having a doorman is incredibly expensive. Its useful if you’re a senior citizen but its an outdated job that you have to way overpay someone due to Unions
Onlooker, way ahead of you. They managed to refi and get rid of a HELOC and only owe ~$375K. { I wonder if they don’t realize that site exists).
Clio, you’re way gives everyone a safety net, but it ends up costing me even more than the asking price.
“you forgot to mention having a doorman is incredibly expensive”
True – but look at the assessments on this place – pretty low considering the asses. cover heat/gas/H20/general maint./parking garage/cable/internet(premium channels) AND the doorman
Having one door man isnt that expensive, having a bunch of door men is, especially if there are multiple workers on one shift like at The Montgomery.
Bob – I tried before he purchased it to warn him of the dangers of 20 units/floor and display my displeasure in the CMK designs…
I live in this building – it truly is a wonderful and convenient place to live. Make sure you visit on a Saturday night to observe if you’re thinking about buying it, this unit is facing Halsted, and it gets very noisy on the street.
A bonus is that the assessments include doorman, gas, cable and internet.
whats wrong with 20 units per floor? Curious
How does one use the ccrd.info website to see what one owes? I understand how to use it to see purchase price, but not how much is left on the mortgage.
Clio —
So few sellers are capable of seller financing it is not even worth discussing it. Even those who are capable (generally older, retired) don’t have the constitution or the sophistication to play the banker.
I know of no stats for this activity but I am guessing incidences of seller financing are slim to none at best.
Agree JMM – but it isn’t really that hard. Even if the person has a mortgage, it really could work out well for both parties. It is not ideal, but when you look at the alternatives (short sale/foreclosure or a property languishing on the market for months/years) it may be the only remaining good option available. If, however, you don’t mind losing money or you can afford to lose money (whatever the amount is) it might be a better idea to just slash the price of your house for a quick sale and be done w/ it.
Clio –
“The list goes on and on… but, trust me – once you have a doorman, you will never go back…”.
After having a doorman – I decided to buy a single family home. It helps get rid of a lot of those problems you mention as a benefit to having a doorman. Except for “4. He can open the door for you when your hands are full.” Although I must admit I am not sure most doormen even have legs as I havent’t experienced any that would go out of their way to stand up from behind their desk, let alone walk around the desk and open a door! Unless of course it is also a hotel where their job requires it.
Seller financing is a myth. Sorry but it doesn’t even justify mentioning.
Oh and to everyone on here that say appraisals don’t matter – I agree as they are usually not accurate. But they do matter if you are looking to get a loan! A lot of the steps/ individuals in a real estate transaction are generally useless, but unfortuntely it doesn’t make any of them go away!
Icarus
No, no, no, no, no, no, no, no, no, no, no, no, no, no way, and absolutely not is paying 35% over similar in todays market ever a good idea! Not even in twenty years. You will be in a deep hole with no options out for a really long time. Any cc’ers that agree to anything over a 10% premium are giving you terrible advice.
I’d suggest that you ask your agent to have a showing where the OWNERS of that home are present. Let them know how much you like the home and how you see yourself living there. If you have kids bring them along. Point out what room each kid will get. Allow the sellers time to show you the place thru their eyes. This will get them to feel differently about you being their eventual buyer but do not talk price too quickly.
Mention at the meeting that you are planning on making an offer this week but are concerned about the current price. Drop that statement and then SHUT UP AND DO NOT SAY ANOTHER WORD…… Then let them elaborate. It may get you the nugget of information you need to actually find a common solution. You do not have to negotiate on the spot just learn what they are thinking and how they came to the current price. Thank them again and let yourself out.
A few days later make a sincere offer as you stated that is not the best you can afford but that is 5% over what is believed is the true value of this property.
If they counter offer with a slight increase over your price then I’m sure you will find a final price that is a slight premium and will end up at the closing table. If the counter is ridiculous or there is not a counter offer then remember to send a very polite thank you letter directly to the home thanking them for showing the wonderful home and wishing them well.
You just might hear from them again in a few months…..
your agent will hate my advice as it goes against their normal mode of operation. Tell them to get over it and make the meeting happen.
Remember that when you are made other big purchases you almost always will bought from someone who you trust, like, and think has a decent product at a reasonable price. Remember that last car you purchased? I’d bet that it was the right feel of that sales person that helped you finally take out the checkbook. If you bought a new car my guess is that you had seen the same car at 3 to 5 other dealers before you made the purchase. In most cases it was the human connection that made the transaction happen. Make them want to sell to you!
Good luck and I hope you get the house!
jp3 – I am not sure whether this will really work. First of all, you don’t know what is the motivation of the sellers (or their personality, etc.). You are assuming that they are this sweet old couple that have lived in their house for years and years, raised their family there and want to see their house go to someone they like. This is rarely the case – and if the buyers seem too interested, the sellers might hold to their price because they know that they have a “live” one. Also, the sellers will feel justified about their price and will be even more reluctant to do a price reduction in the future. Again, psychology can work both ways……
“I’d suggest that you ask your agent to have a showing where the OWNERS of that home are present.”
I’ve never heard of this request. If I were a seller and I got it, I would decline. You pay your agent 5% for a reason. Besides, if the family has children, this is not an acceptable request. I am not shipping the kids off for a showing where I weirdly stay behind and I am certainly not having them present for a stranger to come through the house and negotiate with me in a weird way.
“I’d suggest that you ask your agent to have a showing where the OWNERS of that home are present. Let them know how much you like the home and how you see yourself living there. If you have kids bring them along. Point out what room each kid will get. Allow the sellers time to show you the place thru their eyes. This will get them to feel differently about you being their eventual buyer but do not talk price too quickly.”
This is good advice. I did something similar to this on my recent purchase and it helped a lot. I had earlier bid on a house and tried to run a negotiation similar to what I would do at work. Everything was going well, price was dropping quickly over about a week of negotiating. Then another buyer showed up. Seller said I was an asshole, told the other buyer to match my price and they could have the house. I don’t think I was an asshole, I was just giving them good comps and standing by them. On the next house (the one I bought), I met the seller first (on accident). I then followed a strategy of low-ball and flattery. “I love your house, you are so fortunate to have such a wonderful house, it’s such a great place to raise a family, it will be perfect for my family . . . but it just doesn’t make sense for my family to pay more than —-.” I didn’t say a single bad thing about the house. I pointed out two comps, but didn’t make a big deal about them. I focused on how great the house was, then followed with my number. Seller dropped to my target price in about 36 hours. About 10% off an already significantly reduced ask. Who knows if it was the strategy that made the difference, but I got what I wanted.
Another way of putting this is to say that buying a house is often an emotional decision, but so is selling.
If there are no other bids, then you are only bidding against their idea of what their house is worth. They’ve already crunched numbers and come to their assessment. You have to give them a reason to want to sell at a lower price. Heart strings are one way to get there. Make them see themselves in you. Remind them of themselves when they bought the house. It’s a lot easier if you actually love the house.
“Who knows if it was the strategy that made the difference…”
Those are the key words – I bet this accidental strategy didn’t make a difference. Sellers usually don’t give a crap who buys the house – they are in it for the bottom line. I don’t think it is helpful at all and, as I described earlier, could totally backfire.
oh yeah in negotiations don’t even bother wasting your time listening too your realtor all they want to do is get a deal done so you’ll overpay no matter what
We bought a house for 66% off asking price in 1996. House was a solid mid-century well-built brick structure with “good bones” and large rooms, but dated original interior, baths, kitchen, etc. House smelled unoccupied, wall-to-wall carpeting worn-out. It was originally way over-priced, sat on market for a year, several price reductions, still over-priced. For average house-buyer, little buzz. Our offer was good for a three-day period, and seller accepted at end of three days for $10,000 more than our offer price, much to realtor’s absolute rage. Realtor wanted “kick-out” clause to shop our contract price, but we refused. Never met seller. Sold house for double the price in 2003 in a week, with our only construction improvements being new Pella windows everywhere but with far better interior design.
Note that we weren’t “loyal” to a single realtor representative, and we looked at several different areas too. Our realtor here said she would submit low offers “no matter how low” – no embarassment and no attempts to shame us into higher price. Seller’s realtor was furious through due diligence and closing.
Architect, tell me more! What is a “kick-out” clause?
Clio clio clio……
I am shocked that of all people Clio the ever optimistic personality on CC did not like my idea! You always know how to keep us all off balance with another unpredictable response….
Your point is correct but not in this case. In the Icarus example it can only have an upside. The example presented shows a stubborn seller who is stuck on a completely unrealistic price. I strongly advised that they would be crazy for Icarus to purchase at a 30%+ premium regardless of how much they love the place.
The strategy is designed to make this seller come off of their insane pricing strategy and get everyone to a closing table. It is way more likely to have a positive result than to hope for the seller to give financing. That suggestion is 1 out of 10,000. My suggestion is much better odds.
The other upside is that clearly this seller is being misled by his/her agent. When the listing runs dry and it is not under contract they may indeed come to the realization that it might never sell at $500K. If they have any urgency to sell they might have kept that thank you note and want to explore a transaction without the 5% kicker of the idiot RE agent that has them priced at 35% over market value.
Upside is they might get the dream house now at
Cut off
Upside is they might get the dream house not at
JP3 – your idea might work – but I don’t like manipulating people. It makes me feel dirty…
“Was that 2000 sale an early pre-con (or friends and family) price, or was that the prevailing sale price for these places? Because at that price, I understand why it was in high demand.”
I think the difference in the 2000 and 2003 price was due to interest rates falling, the buyer probably had close to the same monthly payment. I believe that 2000 rates were around 7% or higher, then we had the dotcom bust, 9/11, and a recession and interest rates fell.
A “kick-out clause” allows seller to void contract if another qualified higher bid is received prior to closing (or other specified date). This provision allows seller’s realtor to continue to show property and solicit offers, with a new lower “price to beat” than previously stipulated listing price. Buyer meanwhile is typically obtaining a mortgage and selling prior home without assurances that contract stands.
During the 2003 house-search, I recall sellers receiving “love your house but..” letters to justify less than asking price offers. Strategy supposedly persuaded sellers that buyers were stretching to make offer, but couldn’t meet asking price because of personal financial situation despite “loving house”. Buyers rarely persuaded by comps discussion and offended by a purchaser who bargains too hard. But buyers may be persuaded by purchaser’s personal financial limits on price flexibility if coupled with listing-fatigue, and may suddenly concede on price despite realtors’ prior unsuccessful attempts to make sale.
We’ve not participated in a transaction where “super agent” truly facilitated contract negotiation and closing. Don’t rely on realtor to provide negotiation advice. We’ve experienced:
“big lister agent”: condo agents who collect many listings, don’t market or learn listings, have listing and open house “mix-ups”, “busy”, difficult to reach, and have outsized egos. Agent waits for other agents to bring offers.
“secret agent”: agent who is friend/significant other of successful purchaser, biased towards purchaser, hugs and kisses purchaser at closing. Agent low-balled asking price for property which had no comps at time of listing, but immediately produced qualified buyer. (Other local “housewife” agents had quoted even lower asking price for property; this guy knew emerging demographic market for Edgewater.)
“unknowledgeable agent”: most frequently experienced agent; doesn’t know much about her listing, and gets many facts wrong, and thinks role is limited to providing listing sheets and access to houses. For us, we’ve learned to rely on listing sheet information independently confirmed by our own research, measurement, internet search, etc.
“speedy agent”: agent who shows you less than half dozen properties, and if you don’t make an offer, rapidly loses interest.
“AWOL agent”: part-time agent who never is at office, never available for showings, rarely returns calls, rarely makes sale. We bought property from this agent; it was a six-month slog.
“Ready agent”: agent ready to show properties, ready to submit all offers, ready to do MLS closed sale searches for comps, ready, ready, ready. Doesn’t pretend to be gate-keeper, negotiator, or svengali; wants to make deals and get commission. My kind of realtor.
Then why is it that very few realtors are like the “ready agent” described by Architect? That is what they should aspire to be, but many fall short.
It seems that many realtors are like used car salesmen or job recruiters.
In my experience, the “Ready agent” doesn’t exist!!
Love the descriptions of agents! Very fitting and very correct…and yes, all were very hard to deal with. I can’t begin to tell you how many of them I have walked away from, many with their mouths open in the middle of their presentations.
And yes clio, as usual you are incorrect. There are a number of good, solid ‘ready agents’ around. The others dropped out of the Industry quickly after the market crashed so now basically those left have been forced to undergo the changes required to make them a part of the ready agent crowd.
Clio – This strategy is not about manipulating people but rather about making sure that they find Icarus and that he gets his “dream house” at the right price when this seller finally comes to the realization that they are $100K over true market value.
As you suggested a face and name to a lowball offer may not have any effect on the situation at this moment in time but as “listing-fatigue” starts to play a factor like Architect suggested hopefully they will reach out to the face and name that appreciated the home.
[“Who knows if it was the strategy that made the difference…”
Those are the key words – I bet this accidental strategy didn’t make a difference. Sellers usually don’t give a crap who buys the house – they are in it for the bottom line. I don’t think it is helpful at all and, as I described earlier, could totally backfire.]
This is the obvious, rational response. But people obviously aren’t always rational. As I noted, my first attempt failed when the seller chose someone else because they thought they didn’t like me. Bottom line was the same but they made an emotional decision.
My advice, and the advice of, I think it was jp3, is based on scenario where there is no other bidder. You are bidding against the seller’s emotional attachment to their home. Buyer and seller both know that Seller is not getting the price they want. My point was – treat them like a human, not a rational person, and give them a reason to want to move.
“There are a number of good, solid ‘ready agents’ around. ”
Perhaps you are right, westloopelo. But in the 15 years I have dealt with real estate, I have yet to find an agent that knew more than me about the real estate process or particular property I was buying/selling (and I am neither a broker or agent). This includes a ridiculous number of “famous” agents. I can say that the only great agent I ever encountered and worked with (and there have been dozens and dozens) was Katherine Chez – great experience all around. Despite the transaction being on a small cheap (relatively) one bedroom/studio, she personally took the time to answer any and all questions, go over all of the forms, be there for 1st, 2nd and 3rd showings. No attitude at all – great agent, great person!!!
“That is what they should aspire to be, but many fall short.”
Likely has to do with very low barriers to entry in this field. Any aimless bartender or dog groomer can see being a RE Agent might be a more lucrative/professional/prestigious career and sign right up. But as we know you’re not going to be successful at a job unless you really love doing it.
A lot of realtors, I suspect, came from a prior career where maybe they bounced around jobs a lot and never really had aim or direction and being a Realtor is just the next job for them. And this shows.
Best way to deal with only good realtors is to avoid new ones. If someone has been successfully doing it for 5+ years you know they’re doing something right and likely not treating it as a McJob.
Sales is sales… there are great, good, mediocre, and poor performers. I have dealt with several from the great, good, and poor categories. A shout out to Craig Tinder in Park ridge as an excellent agent that listens and actually thinks before responding. He works in a small area and knows the product intimately.
you forgot “flaky agent” – the one that never shows up on time, calls ahead, cancells last minute, and is typically never available by phone, e-mail or other modern modes of communication. This agent is the type that if you said you had 500k cash in a briefcase and you wanted to buy a house TODAY, you still wouldn’t be able to buy one for at least 3 weeks
“you forgot “flaky agent”
– about 90% of the agents would fall into this category!!! It truly is unbelievable. The 500k comment, although I think you were being sarcastic – is ABSOLUTELY true. I have experienced this and have been completely shocked at the apathy of some of these agents. Unbelievable!!
You forgot my pet peeve: “Suburban Housewife Agent” (I think I posted this on another thread, but anyway)
Needs “something to do while the baby’s sleeping and the kids are in school” so attends license class at night while hubby minds the kids, or does the on-line thing. Gets her license, finds a local big-time broker to “sponsor” her, which means haning her license on the wall and little else. Passes her card around to the church ladies, beauty-shop patrons, PTA moms, etc. in hopes of getting one or two listings; will even discount the commission for them.
Puts lockbox on house, never shows up for showings, gets really ticked-off if buyer’s agent insists on someone being there, knows very little about the property itself, never shows up at closing but loveslovesloves it when her broker gives her the commission check. Because BABY NEEDS A NEW PAIR OF SHOES!!!
Also under contract (not surprisingly).
sold today for 350k