List Price Discounts

Sold Price $135k below List? Ouch!

One of the characteristics of a Buyer's market is Buyers wresting steep discounts from the Seller's asking price. Even so, a $135k discount -- from an already reduced $800k asking price -- stands out for sheer magnitude (note: to see the unabridged report, go to "display" in the lower left and select "Property/Agent Full"):

http://matrix.northstarmls.com/de.asp?k=411903X1JL0&p=DE-39160848-449

Is the market really that soft?At least in this case, I think a couple of other factors are operating.

First, the original asking price, $850k, was, shall we say, aggressive, based on what I know of the comp's ("comparable sold properties") -- quite a bit, considering I've sold millions of real estate within a few blocks in the last few years.

Second, based on the time that elapsed between when the home went pending and when it closed -- one week -- you'd speculate that the Buyer paid cash. With tightening underwriting standards and fewer well-qualified Buyers out there, an all-cash offer warrants a nice discount.

Third, the home was a "spec" (speculative) remodel done by a builder-remodeler. By definition, such homes are vacant -- no one is deriving any benefit from them. Meanwhile, the holding costs continue to mount along with the time on the market.Whereas many long-time owners can be quite emotional --and therefore stubborn -- about taking price reductions, corporate sellers tend to be more dispassionate and bottom-line oriented. Closing by year-end may also have had favorable tax consequences (if indeed the Seller took a loss).

Finally, the home sold in mid-December. Ordinarily, this is already a seasonably slow time of year for the Twin Cities housing market. However, with all the economic turmoil the last few months, December this year was colder than the thermometer.In such an environment, a heavily "discounted" offer is better than none at all.

X-Mas Day Multiple Offers?

Even in a slow market, real estate is bought and sold every day of the week, even Christmas Day.
Don't believe me?
Check out 3253 Holmes Avenue South, a fourplex just east of Lake Calhoun that hit the market this morning (Christmas Eve):
http://matrix.northstarmls.com/de.asp?k=411903X1JL0&p=DE-38861690-592
According to the listing agent, the property needs about $100k in various capital improvements, including new windows and boilers. But it's still a screaming bargain, given the proximity to Lake Calhoun, the assessed tax value (just under $500k), and potential upside.
The agent said there's a line 8 deep to see the property tomorrow (she's in FL today, and can't show it till then), and that she's already received multiple offers, sight unseen. And I don't doubt her!
Best guess is that it goes as soon as the bank contact is available, presumably Friday, for well over asking price.
P.S.: I'd love to have an investor for this, but I don’t, at least at the moment. If you see this post before 5 p.m. on Christmas day and are interested . . Call me! I'd be happy to show you the property, then head straight back to my office to write an offer.