Not mentioned was the list price was $7,000,000 (on April 2nd), and the listing agent represented the buyer too:
Even in the throes of a pandemic, the offers started coming in almost immediately.
The day after an off-market opportunity in Beverly Hills was made known in late March, as Los Angeles County residents adjusted to new stay-at-home orders, the listing agent found his inbox flooded and his phone ringing off the hook. Seemingly everyone wanted a piece of the property, which was marketed by email. Within the first 24 hours, there were dozens of calls on the property and 18 offers made.
“I knew we’d see some action, I just didn’t know how much,” said Paul Salazar, the listing agent with Hilton & Hyland.
The home on North Bedford Drive, a popular street in the Flats section, received a total of 22 offers, according to Salazar. The potential buyers were a mix of end-users — buyers who wish to remodel and live in the home — and developers looking to tear down the existing structure and build. Ultimately, it was an end-user that purchased the property for $6.75 million.
The Italianate-style house, built in 1928, has four bedrooms, 3.5 bathrooms and more than 3,500 square feet. A large motor court sits off the front of the one-third-acre property.
Salazar believes marketing the home as an off-market opportunity gave it more exclusivity, but the excitement began to wear off as “everyone began watching the news” and reality of the coronavirus set in. Additionally, about one-third of the buyers, specifically those carrying mortgages, were ruled out over concerns that loans might be frozen due to the pandemic.
“It looked like it was going to be a big bidding war, but it ended up being a long negotiation with 3-4 buyers going back and forth,” Salazar said. Had the pandemic never happened, Salazar believes the property would have sold for about $1 million more.
While the coronavirus has stifled sales throughout the Southland, L.A. County’s high-end market has continued to produce a steady stream of multimillion-dollar deals.
In April, there were eight sales of $10 million or more including two deals north of $36 million in nearby Bel-Air. Last month, there were five sales of $10 million or more including two transactions of $21.5 million or more.
It always seemed to me that if ADUs were selling for $50,000 or less, there would be lots of interest. Literally the first one I ran into (below) at the Tiny Fest was priced at $50,000, and people were standing in line to experience this 8.5 ft x 30 ft home with kitchen and full bath (seen in right window).
An update on two of the homes featured here that garnered multiple offers. As expected, they sold for well over their list price. This one got $51,000 over the top of their price range:
This one had 20+ offers, and sold for a whopping $190,100 OVER LIST PRICE!
The fully-renovated, one-story homes are HOT!
Plus let’s also include this old classic in Olde Carlsbad that sold for $30,000 over list price, or $773/sf in an area that has averaged $539/sf over the last six months:
I have to hand it to Brett and team in their preparation of this 1975-built home in Solana Beach. The flooring was removed downstairs, and they added a heavy epoxy paint to the exposed-concrete, which gave it a trendy-hip look to go with the colorful formica in the kitchen:
The list price is $1,850,000, and they already have four offers!
Let’s review what it takes to create a solid bidding war.
Maintain and improve your home constantly over the years.
Install a master bathroom like this!
3. List with Jim the Realtor for an attractive price, do $3,200 of staging, and take off for the weekend!
I inputted the listing at 8:30am on Saturday morning with professional photos, and got immediate results – over 100 people came to open house the same day.
Sunday’s open house had nearly as many people, and those who didn’t attend could watch my walk-around tour on video: https://youtu.be/LCEDYc4rkaQ
We’ve received EIGHT WRITTEN OFFERS (seven over list price), and going for more. Three showings set up for today, and Donna and I are fielding questions and encouraging higher bids all day long!
To ensure top dollar, we treat everyone fairly and give them every opportunity to bid up the price. The highest offer so far is $890,000, and others have said they are going higher so we raised the list price from $869,000 to $899,000 on the MLS for added exposure on the realtor hotsheet. I mentioned that we have eight offers too.
Want this kind of attention when selling your home? Hire Jim the Realtor!
It goes to show you that you don’t have to worry about under-pricing a home…..as long as you put it on the open market so every buyer gets a crack at it!
Are you looking for proof that there are buyers being very patient, and are waiting in the wings until they see the perfect fit?
Consider this one, which I heard reports of receiving 18, 19 or 20 offers. It was listed for $888,000, and closed for $1,000,000, or 13% over list price:
It had the popular hot tickets – full remodel with the white/gray modern look, natural light via skylights, one-story, and garage granny flat (permits unknown).
The surge noted last week continued its hot streak, which should be expected as the selling season really gets rolling. The total number of pendings increased 6%, and those over $2,000,000 increased 24%!
Glad to see the $2,000,000+ market having some life, with 462 active listings – or 54% of the total inventory of houses for sale between La Jolla and Carlsbad.
Even though it might feel warmer, we are still lagging behind last year:
Weekly Total Pendings
Week
2018
2019
% diff
Jan
244
217
-11%
Feb
262
233
-11%
Feb
280
255
-9%
Feb
295
263
-11%
Feb
318
261
-18%
Mar
328
267
-19%
Mar
339
284
-16%
What might contribute to buyers wanting to wait-and-see a bit longer is the lack of bidding wars. Instead of having to deal with the messy multiple-offer situations, agents who get a hot listing just sell it off-market now.
Without bidding wars, we don’t have those disappointed losers who get more determined to grab the next one, and move quickly to pay whatever it takes.
Home sellers who have been on the market for 30 or more days and are tired of not selling may eventually consider a price reduction – but by how much?
There are a number of reasons why a home isn’t selling. Thankfully, you don’t have to be an expert on why – because price will fix anything:
Inferior location
Funky floor plan
Repairs needed
Market conditions
Few or no comps
Struggling economy
Low zestimate
Listing agent
Bad weather
Bad neighbors
Buyers are willing to pay within 5% of the list price. So if you are getting showings and offers, then the list price is about right.
If you’re not getting offers, then the list price must be more than 5% wrong.
Won’t buyers make an offer, even a low one? No – it’s too easy for buyers to stay on the fence while they wait-and-see, rather than make a low offer. In fact, we rarely see an offer that is lower than 5% below the list price because buyers would rather not bother – plus they don’t want to offend anyone.
A proper price reduction re-ignites the urgency and enthusiasm in buyers, which makes them want to write a good offer.
How much is needed to get buyers to engage?
Lower the price by 5%.
You see sellers lowering their price by 1% or less, but that’s not impressing the buyers – if anything, it reminds them that your price is still wrong because it still looks too much like the old price.
Lowering the price by 5% not only re-engages the existing buyers who are considering your home, but it also picks up a new set of buyers who weren’t looking as high as your previous price.
It may sound bold, but what else can a seller do to regain momentum?
Two things: a) Complete repairs/improvements to bring the home’s value up, or b) cancel the listing and try again a few month later.
If you don’t want to bother with repairs and really want to sell now, then do this exercise:
How does your home compare to the active listings priced at 5% below their current price – are you winning that test? Is your house the best of that bunch? Find the group of active listings where your house is the obvious winner, and you’ll know the price that will work.
If 5% sounds like too much, and waiting longer for that perfect couple with 2.2 kids to come along is easier to swallow, then no problem. It could happen.
But if you’re tired of waiting and will consider a price reduction, then 5% is the recommended amount – which isn’t giving it away. It’s just recognizing that the initial list price was too optimistic, and a more-realistic price is needed.
Smaller reductions won’t cause buyers into doing anything different than they’ve been doing – waiting for a fair price/value for today’s market.
