The last thing realtors, lenders, and especially sellers want is an educated populace, but that's where we are today. And individuals brave (or foolish) enough to try to sell in this disastrous environment are learning all too quickly that not only is the pool of buyers savvy and in the power position, but tightening lending standards and a reintroduction of common sense mean that pool is shrinking fast.
It was much easier to sell when lending allowed otherwise unqualified buyers to suddenly compete, adding to an already crowded buyer pool sold on the prospect of perpetual real estate appreciation. In those days undesirable properties, priced 10% above local comps, were getting multiple bids and selling above their ridiculous asking prices.
Those days are gone, and the smart sellers saw that coming, priced aggressively, and got the hell out of Dodge. As they say, better to sell a year early than try to sell one day late.
However, those who haven't sold and are still sitting on their value-deficient properties are too late to save their financial future. They just don't know it yet.
Oh, sure, some are making small price cuts (more like paper cuts) thinking they're just about to hit the pricing sweet spot and nab a sale, but they have no idea that it will not be enough. The ability to get out for a profit passed them by years ago. The break-even opportunity went up in smoke a ways back. The chance to unload a property and only pay realtor commissions is long gone. And the proposition that they could get out minus their downpayment, commissions, and a $15,000 check has vanished like a fart in Jupiter's orbit.
You see, whether sellers recognize it or not, in this market the only thing that will snag an articulate, smart, financially solvent, educated buyer is Pain Pricing.
If a seller is serious about unloading their debt-trap, and isn't just one of these numbskulls slapping a wishing price on their home in the hopes some time-traveler from 2004 will come along and have no regard for how overpriced it is, they are going to have to price to the point where it causes them severe pain: financially, emotionally, and yes, physically.
Just ask the seller of today's property:
Address: 2420 East 4th ST #4, 90814
Asking Price: $290,000
Size: 2 bed, 2 bath (1,077 square feet)
$/Sq. Ft.: $269
Year Built:1956
Purchase price: $405,000 (Jesus! Have you ever taken a math class?)
Purchase date: 8/2005
MLS#: P574952
On Redfin: 293 days (Hurry, this won't last!)
Description: Located in the Carroll Park Historic District, 4 blocks to beach, 1/4 block to Portfolio & 4th st Arts/Retail, this 2 bd/2ba classic 1950's upper condo has 1077 sqft, hardwood floors, full height windows in living rm & dining rm. The home has orignal color tile in baths & a master walkin. Both bdrms are oversized. Corner unit w/ windows on 3 sides. 4 blks to beach/bike path. Perfect for discriminating buyer who desires a 50's retro condo in a historic district Largest floor plan in complex.
This "historic district" stuff is hilarious. What's funnier is they mentioned it twice. I'm seeing it more and more recently. Like this is a brownstone in Georgetown or a civil war house in Annapolis, MD. Dude, it's a 50-year-old dump in Long Beach. Hardly enough to get the Preservation Society on the phone.
The "retro" descriptor is also amusing. Other words you could use, were you in the business of telling the truth include, "older than sh*t." Just take a look at the bathrooms. "Orignal" toilets and tile ain't retro, that's just decrepit. And I'm sure the failure to replace those ancient fixtures was all about a commitment to preserving the "historic" aspects of the property. Yep, had nothing to do with a crushing $2800 monthly payment.
As you can see by the absolutely horrendous interior, this idiot way overpaid.
Exhibit A, for the jury's consideration:
Exhibit B, your honor:
At the original asking price of around $400,000, the bare minimum to play is upgraded double-paned windows, central air/heating, stainless appliances, granite countertops, and remodeled bathrooms. I don't see any of that, just a lot of ugly, ugly, ugly.
Really, this is "perfect for a discriminating buyer"? A discriminating buyer wouldn't touch this place for anything over $200 per square foot.
Speaking of square feet, at 1077, it makes me think the claim that "Both bdrms are oversized" either means A) to Gary Coleman, or B) the rest of the house is severely undersized.
Plus, this place is straddling a busy street, has only one parking space (sorry wifey, sling that Saturn on the street tonight), has shared laundry facilities...I mean, just what was this person thinking pricing at $400,000?
They were thinking they could get out without any noticable pain.
But now this seller knows that's not even remotely possible and he's implementing, and embracing, Pain Pricing. Let's look at the history (by the way, one glance and it's no wonder this P.O.S. has floundered on the market for almost a year).
May 01, 2007 - $398,900
Jun 04, 2007 - $349,900
Jun 28, 2007 - $339,900
Jul 31, 2007 - $329,900
Nov 06, 2007 - $328,000
Feb 01, 2008 - $290,000
A $38,000 haircut in the last few weeks and still no takers. If this poor sap finds a knight in shining armor tomorrow and gets his asking price, he stands to lose a mind-blowing $127,400.
Maybe you're a trust fund baby, but where I come from $127,400 is a lot of money. And losing it would be excruciatingly painful.
All I want to know is how on earth, under any circumstances (even circumstances fueled by irrational exuberance and promises of unending real estate riches), could purchasing this place for $405,000 have mapped out financially using even the most rudimentary calculations? Didn't they check the Grunion Gazette for local rents? Doesn't this person have friends? How about their real estate agent, who serves as the buyer's advocate? Where were they?
Not that I expect much honesty out of someone whose livelihood depends on me spending the most money possible (would you expect the server at La Opera to tell you the $9 bottle of Shiraz is just as delicious as the vintage La Fete?), but this person will be left in financial ruins by the time this fixer mercifully sells.
No comments:
Post a Comment