Two houses for sale on my block illustrate the importance of getting the price right at the start if you want to sell your home quickly. One house, a four bedroom Spanish-style one, came on the market at the end of May at $1.49 million (this is Los Angeles). The asking price has been lowered twice with no takers. It’s currently listed at $1.29 million.
The second home came on the market July 7 and sold immediately. The broker held just one open house but whispered to me that she already had an offer that would likely be accepted that day. The word on the street is that it sold for slightly above asking. The list price was $1.29 million, same as the new price on the house above.
The difference is that the second house—that’s it to the right—is 2,600 square feet, almost 50% larger than the first home. Yet they were asking for less money. The second home is in a Craftsman style, with a swimming pool and many Frank Lloyd Wright-inspired finishes. It needs work. The first house had just been remodeled, with all-new bathroom and kitchen fixtures. The second one still seemed like a better deal.
The seller of the second house—he wrote the screenplay for Pretty Woman by the way—could afford to accept less. He had bought the house for $560,000, probably with all those Pretty Woman profits, in 1990. The owner of the first home is a house flipper who paid $900,000 for it in March. I’m not sure how much he put in to fix it up, but clearly he has less price flexibility.
Anyone else have any home pricing stories like this?
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.