There are a few things that stand out for me in this project. They are:
- The importance of a good process
- The importance of a good team to implement that process
- Standing firm on price when appropriate, and
- The importance of managing the appraisers visit
As I left this property after meeting with Angie and James about listing it, I called my wife, who calmly said toward the end of our call: “Well, I think it is going to happen tonight.” It was the birth of our son, Tommy. It turned out that he wasn’t born until the next day, but…Holly’s labor sure happened that night. Thankfully, I have a process, and a great team to support me, so we were able to get the property listed and enjoyed great success.
We had considered listing at $1,400,000 based on other local inventory, but decided to push the number based on the premium we felt the home deserved. We considered lowering the price at two weeks on the market (the sellers had their own infant at home so showings were inconvenient, and also wanted the proceeds for a home they were under contract to purchase), but decided to hold the line on price, as we still believed in the value. We soon heard of one offer coming, and were able to use that offer to encourage another party to get off the fence which…encouraged that first party to make their offer better.
We sold at $1,665,000 and created what I call “an appraisal problem.” It is a goal of mine to create this dynamic whenever I represent sellers; a house that is under contract for more than the appraiser is likely to see the value for. I met the appraiser at the house with my version of the “comps” for the property. She pointed out that the actual square footage of the home – per her calculations – was less than the city record. I argued that that it didn’t matter; that the quality of the property stood firm, and shared an example of a smaller-sized home that had recently sold at a similar price (across town). The appraiser agreed and the sale closed. The family moved closer to their extended family and we all smiled.
View listing details here.
Maybe the best article I've seen on shadow inventory; history over the downturn and how to think about it now and in the future: http://blogs.wsj.com/developments/2012/08/15/shadow-inventory-monitor-banks-speed-not-just-volume/ (pssst to WA Staters: on Friday evening I had a discussion with a Paralegal friend hired to handle an increasing volume of judicial [slower] foreclosures).
Interesting (seems convincing) angle on shadow inventory.
http://www.kcmblog.com/2012/08/16/dont-be-afraid-of-what-lurks-in-the-shadows/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+KeepingCurrentMatters+%28The+KCM+Blog%29. A click on the link to the map shows WA state what appears to be a below-average 1.3% of homes in the process of foreclosure.
People often wonder/ask about "shadow inventory." Here's an interesting graphical representation of same; showing a current decrease
Well, there goes the “there are no new condos coming out of the ground” argument. It looks like we can expect 335 new units by the end of 2014, with 335 more to follow if the developer feels that demand will support the supply. This underscores one of the challenges with assuming supply/demand-based appreciation in in-city condominiums; when there are empty lots around, there is potential for more supply. http://www.djc.com/news/co/12041770.html
The “news” isn’t all that much a surprise. The balanced nature of the article – reduced supply, increased demand, but acknowledging “shadow inventory” – is refreshing.