My recent video about how to sell a home fast in any market was driven home today by a question I got from a buyer who previewed some homes with me yesterday.

The home they asked me about was an absolute keeper, at a price that beat out all the comps not only for its neighborhood, but for any other comparable neighborhood in Sacramento County.

In fact, this was one of a few homes that was such a screaming good bargain that two buyers had asked me about it, and I was really thinking I should post it here but didn’t want to have a conflict of interest with those buyers.

Their question was about whether I could call the agent to find out why it had been on the market so long. Well, I was happy to do that, and knew that while I was looking up her number I could look up the listing history, knowing that the price change would probably tell the tale.

Here’s what I found:

If You Don’t Understand Why The Price Is So Low, Blink

Darn, pending sale — I’d have to tell the buyers that. But there’s more of a tale here.

Of course, the buyer doesn’t have this info readily available, so their question was perfectly natural, “Why has it been on the market approximately six months?” From a Realtor® point of view, however, this isn’t a $299,000 home that’s been on the market for six months, but a $299,000 home that sold after ten days.

In the MLS, the actual pending date is 10/3, but it was entered on 10/4 as you can see above. The price was dropped from $325,000 to $299,000 on 9/24, and now there are three offers on it. 9/24 to 10/3 is ten days.

The price it started at, $395,000, is actually almost justified by the current sold comparable sales. But $299,000 is where it needed to be to finally get it done, in a slow Fall with few buyers.

Fortunately for my buyer, it turns out that there is still a possibility of making an offer on this one, so I let them know that — we even have a pretty good idea about what we need to offer.

The Market Within The Market: What’s Being Sold Here, Anyway?

There are several morals to this story:

• Some buyers are waiting for market prices to come down another 25% or so, and some buyers are out there buying homes that are already reduced 25% or so.
• If you wait until the market comes down, then you get to compete with a lot of buyers. If you wait until there’s a good bargain on a house you want now, you get to compete with fewer buyers. If you think sellers won’t see you coming ten minutes after all the buyers come back and start adjusting prices upward, then you make the classic mistake of thinking yourself the only greedy party to the transaction.
• A lot of people are selling you the market, and if you’re buying a market, then you shouldn’t buy a house. The question a smart buyer asks is “am I buying a market, or am I buying a house?” There are great buys in bad markets, and dumb buys in great markets.

I’ve actually been counseling my buyers to consider some other homes that are lower priced than this, because in their situation it makes more sense and I don’t want them to get overextended. Now the trick is to find them the perfect $340,000 home that’s priced at $260,000.

In fact, instead of writing about the market, which is kind of depressing, I think a really good article series would be “bargain of the day” (or week, or whatever). In his response to Jim Kramer, Gary Keller notes that there is a “market within a market”. As I say above, there are great buys in bad markets, and dumb buys in great markets. Keller makes a similar point.

Whether you’re buying now or later, buy well. If you’re not buying at all, that’s cool, too. If you are, call, and we’ll go bargain shopping.

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