When you’re shopping around for a house, you tend to see a lot of homes. Some of them you tend to see over and over again. You might create a search on a Realty Website or if you’re working with an agent at that point, they might email you listings. Sometimes if really feels like the same house that “just listed” has been on the market forever.
Because it has.
The other day I got an automatic email from Redfin telling me about a price reduction in one of the houses I’ve been following. It dropped from $444000K to $443,300K, not much of a price reduction. I decided to take a closer look.
The house is listed as MLS 08107033 (note: you may need to create a Redfin account to see all the history). Notice that it says (as of this posting) this property has been on the market for 113 days.
We saw it on June 24 when it had already been on the market for 86 days. And yeah for those doing the math in your head, it has been more than 27 days since June 24. We saw it when it was MLS 08031319 and it originally listed for $485K and has been chasing the market.
Realtors and Sellers use a couple of tricks, usually in concert, to make a stale property appear new.
- Lower the price by a slim amount, and
- Delist and then Relist the property
Lowering the price of a property by say $100-1000 causes it to appear fresh on some realty websites and also to reappear in someone’s saved searches. This is true no matter how much you lower, or raise the price.
Delisting and then relists a property gets a fresh MLS number so it might not have all the previous history for the house attached. It’s a perfectly legal move though it is somewhat pointless in the Internet Age because a savvy buyer will find the history.
About the house: A rehabber bought the place for $172K in January 2012. I’m not sure if he actually put in $300K of work into the place nor am I begrudging him making a profit. That’s his line of work and he’s entitled to make as much money as possible.
At first glance, this is an awesome-looking old house, pretty much the type I’d like to live in. I could even get over living on a busy street which this part of Ridgeland Avenue in Oak Park is. However, the bedrooms are small and we would probably have to sacrifice one to reconfigure a Master Bedroom/Master Bath setup, though that might allow for an upstairs laundry room.
Also, the front porch is noticeably slanted so that a=and the lack of master bedroom and separate bath leaves this property undesirable at this price point. The agent wasn’t the listing agent but she was nice enough to chat with us for a long time as no one else came by while we were there. She gave us some insight into Oak Park and I told her that if the builder is willing to come down closer to $400K, give us a call. No one has reached out to us of course.
In the case of owners trying to sell their homes, I’ve noticed a trend where it seems like the seller isn’t so much trying to make the insane profit of the boom years so much as they are trying to be able to walk away with their transaction costs covered AND a down payment for the next home.
In the case of the builders, I can only speculate that either the costs are higher than I realize, or they encountered some unforeseen circumstances that ate up their profits, or they are trying to cash in on naive or frustrated buyers who just want new and ready to move-in homes.
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