5 ms·

The market is quite insane right now. We have a second property we're likely to sell this year, and the market estimate is up over $70k from last year. When we

by bane 6y ago

The market is quite insane right now. We have a second property we're likely to sell this year, and the market estimate is up over $70k from last year. When we talked to a realtor we were informed that it would probably move inside of 2 days with multiple competing offers. This is over 50km from the nearest major city. Buyers are waiving nearly every contingency, they know sellers basically have all the marbles right now. It's a 180 degree turnaround from 3-4 years ago when the same property would have lost us over $100k on the market. A nearly $200k markup over less than 4 years is crazy.

sigstoat 6y ago
> We have a second property we're likely to sell this year, and the market estimate is up over $70k from last year. When we talked to a realtor we were informed that it would probably move inside of 2 days with multiple competing offers so, if it'll go so fast, couldn't you sell for even more? i keep hearing these second hand tales of houses going under contract in <24 hours, and that seems to imply at least a few more dollars could be squeezed out of the sale.
- awb 6y ago
  If you have 30 offers within 2 days, but then reject them all waiting for another buyer, the buyer you wait for has to outbid the 30 previous buyers to make it worthwhile. The likelihood of that is slim. Most serious buyers are ready to go in this market and will come in strong with their best offer days after it hits the market. Plus, realtors put a lot of pressure on sellers to accept an offer especially when it's over asking price. They'd rather have 2 sales a week at 98% of max price than 1 sale a week at 100% of max price.
  - brudgers 6y ago
    Realtors would rather have a sale in two days at 70% of market value than a sale at 110% in ninety days. With the quick sale they have vastly reduced expenses. No brochures, web-site pictures, open houses, etc. Fewer showings also save time. An extra $10,000 in the purchase price puts about $200 in the agent's pocket. And $9300 in the seller's.
    - zeckalpha 6y ago
      That’s just market value, not 70% or 110%.
      - brudgers 6y ago
        Reference, https://www.nber.org/digest/mar05/do-real-estate-agents-exploit-their-information-advantage https://www.nber.org/digest/mar05/do-real-estate-agents-expl... With a realtor in the middle of a transaction, it's not solely between a willing buyer and seller. The realtor has interests orthogonal to both parties. These interests are driven by their overhead, access to working capital and the time value of money. As well as their personal timelines...try to close a real-estate deal the Friday before a long weekend or the Monday after.
  - sigstoat 6y ago
    > If you have 30 offers within 2 days, but then reject them all waiting for another buyer, the buyer you wait for has to outbid the 30 previous buyers to make it worthwhile. my recollection from buying a house (even in the buyer's market of 2008? or 2009? eh), was that the seller had 7? days to accept/reject. so sellers now should be able to just accumulate a pile of offers, i'd think, before having to reject any? > They'd rather have 2 sales a week at 98% of max price than 1 sale a week at 100% of max price. well, that certainly makes sense. that extra 2% times their 7% probably isn't worth any risk, let alone screwing around further on your house when they could be moved on to the next one. in the end i expect a bunch of factors are contributing, and i'm expecting the explanation to be more satisfying than whatever reality is going to provide.
    - awb 6y ago
      > my recollection from buying a house (even in the buyer's market of 2008? or 2009? eh), was that the seller had 7? days to accept/reject The expiration of the offer is determined by the prospective buyer. You can write an offer that expires in 1 hour if you wanted to. But most people do say 1 week. > so sellers now should be able to just accumulate a pile of offers, i'd think, before having to reject any? Yes, most sellers here collect sealed offers for 1 week and then review them all at once. It's rare to have a house with no issues not accept an offer after 1 week. Some sellers even choose to just list for a weekend though. It's insane.
awb 6y ago
> A nearly $200k markup over less than 4 years is crazy I'd wager that 75-90% of that gain came in the last 12 months alone. In the Santa Cruz Mountains, houses are going within days well over asking to buyers with all cash offers. Our realtor friend listed a house for $1.5M, and within 48 hours had 7 bids, topping out at $1.85M. The people who bid $1.6M didn't even get a counter offer. They said it's a mix of Silicon Valley millionaires and billionaires buying 2nd+ homes outside of the city.
- scruple 6y ago
  > In the Santa Cruz Mountains, houses are going within days well over asking to buyers with all cash offers. Where I live in south Orange County, as well. Listings are in the market for 1-2 days tops in my neighborhood. It's ... insane.
- bradlys 6y ago
  Santa Cruz mountains aren’t like middle of nowhere though... They’re very desirable (outside of being on fire all the time). They’re no different than the rest of SV when it comes to the general market...
codegeek 6y ago
Funny but our house supposedly also has gone up in 70K value in last 12 months and about 40K of that in last 3 months. It's crazy.
brudgers 6y ago
Ask $140k more. The realtor wants a low price for a quick sale. Their commission is on the total purchase price. If you have a mortgage, your profits are all on the back end. If you get $10,000 more the realtor only makes some fraction of $700...about $200 assuming 50/50 agency split and 40/60 broker-agent split. You make $9300. The incentives are grossly misaligned when it comes to getting full market value. The agent has almost no incentive. You have high incentive. If the price is too high, someone can always low ball.
dv_dt 6y ago
I'd be curious what the breakdown of buyers is between categories of people intending to use it as a primary residence, secondary residence, or corporations (or people), buying rentals. Post 2008 there were reit corps formed to buy up rental properties, and there was a visible shift from personal ownership towards own to rent.
- inter_netuser 6y ago
  It's not individuals. https://www.wsj.com/articles/that-suburban-home-buyer-could-be-a-foreign-government-11618306380 https://www.wsj.com/articles/that-suburban-home-buyer-could-... https://www.jsonline.com/in-depth/news/2021/04/15/milwaukee-rentals-overtaken-corporate-landlords-raking-profits/6989234002/ https://www.jsonline.com/in-depth/news/2021/04/15/milwaukee-...

by bane 6y ago

sigstoat 6y ago

> We have a second property we're likely to sell this year, and the market estimate is up over $70k from last year. When we talked to a realtor we were informed that it would probably move inside of 2 days with multiple competing offers so, if it'll go so fast, couldn't you sell for even more? i keep hearing these second hand tales of houses going under contract in <24 hours, and that seems to imply at least a few more dollars could be squeezed out of the sale.

awb 6y ago
If you have 30 offers within 2 days, but then reject them all waiting for another buyer, the buyer you wait for has to outbid the 30 previous buyers to make it worthwhile. The likelihood of that is slim. Most serious buyers are ready to go in this market and will come in strong with their best offer days after it hits the market. Plus, realtors put a lot of pressure on sellers to accept an offer especially when it's over asking price. They'd rather have 2 sales a week at 98% of max price than 1 sale a week at 100% of max price.
- brudgers 6y ago
  Realtors would rather have a sale in two days at 70% of market value than a sale at 110% in ninety days. With the quick sale they have vastly reduced expenses. No brochures, web-site pictures, open houses, etc. Fewer showings also save time. An extra $10,000 in the purchase price puts about $200 in the agent's pocket. And $9300 in the seller's.
  - zeckalpha 6y ago
    That’s just market value, not 70% or 110%.
    - brudgers 6y ago
      Reference, https://www.nber.org/digest/mar05/do-real-estate-agents-exploit-their-information-advantage https://www.nber.org/digest/mar05/do-real-estate-agents-expl... With a realtor in the middle of a transaction, it's not solely between a willing buyer and seller. The realtor has interests orthogonal to both parties. These interests are driven by their overhead, access to working capital and the time value of money. As well as their personal timelines...try to close a real-estate deal the Friday before a long weekend or the Monday after.
- sigstoat 6y ago
  > If you have 30 offers within 2 days, but then reject them all waiting for another buyer, the buyer you wait for has to outbid the 30 previous buyers to make it worthwhile. my recollection from buying a house (even in the buyer's market of 2008? or 2009? eh), was that the seller had 7? days to accept/reject. so sellers now should be able to just accumulate a pile of offers, i'd think, before having to reject any? > They'd rather have 2 sales a week at 98% of max price than 1 sale a week at 100% of max price. well, that certainly makes sense. that extra 2% times their 7% probably isn't worth any risk, let alone screwing around further on your house when they could be moved on to the next one. in the end i expect a bunch of factors are contributing, and i'm expecting the explanation to be more satisfying than whatever reality is going to provide.
  - awb 6y ago
    > my recollection from buying a house (even in the buyer's market of 2008? or 2009? eh), was that the seller had 7? days to accept/reject The expiration of the offer is determined by the prospective buyer. You can write an offer that expires in 1 hour if you wanted to. But most people do say 1 week. > so sellers now should be able to just accumulate a pile of offers, i'd think, before having to reject any? Yes, most sellers here collect sealed offers for 1 week and then review them all at once. It's rare to have a house with no issues not accept an offer after 1 week. Some sellers even choose to just list for a weekend though. It's insane.

awb 6y ago

> A nearly $200k markup over less than 4 years is crazy I'd wager that 75-90% of that gain came in the last 12 months alone. In the Santa Cruz Mountains, houses are going within days well over asking to buyers with all cash offers. Our realtor friend listed a house for $1.5M, and within 48 hours had 7 bids, topping out at $1.85M. The people who bid $1.6M didn't even get a counter offer. They said it's a mix of Silicon Valley millionaires and billionaires buying 2nd+ homes outside of the city.

scruple 6y ago
> In the Santa Cruz Mountains, houses are going within days well over asking to buyers with all cash offers. Where I live in south Orange County, as well. Listings are in the market for 1-2 days tops in my neighborhood. It's ... insane.
bradlys 6y ago
Santa Cruz mountains aren’t like middle of nowhere though... They’re very desirable (outside of being on fire all the time). They’re no different than the rest of SV when it comes to the general market...

codegeek 6y ago

Funny but our house supposedly also has gone up in 70K value in last 12 months and about 40K of that in last 3 months. It's crazy.

brudgers 6y ago

Ask $140k more. The realtor wants a low price for a quick sale. Their commission is on the total purchase price. If you have a mortgage, your profits are all on the back end. If you get $10,000 more the realtor only makes some fraction of $700...about $200 assuming 50/50 agency split and 40/60 broker-agent split. You make $9300. The incentives are grossly misaligned when it comes to getting full market value. The agent has almost no incentive. You have high incentive. If the price is too high, someone can always low ball.

dv_dt 6y ago

I'd be curious what the breakdown of buyers is between categories of people intending to use it as a primary residence, secondary residence, or corporations (or people), buying rentals. Post 2008 there were reit corps formed to buy up rental properties, and there was a visible shift from personal ownership towards own to rent.

inter_netuser 6y ago
It's not individuals. https://www.wsj.com/articles/that-suburban-home-buyer-could-be-a-foreign-government-11618306380 https://www.wsj.com/articles/that-suburban-home-buyer-could-... https://www.jsonline.com/in-depth/news/2021/04/15/milwaukee-rentals-overtaken-corporate-landlords-raking-profits/6989234002/ https://www.jsonline.com/in-depth/news/2021/04/15/milwaukee-...