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Old 09-05-2007, 11:16 AM
Status: "Made the Retirement Run in under 12 parsecs!!!" (set 1 day ago)
 
Location: Cary, NC
43,062 posts, read 76,604,643 times
Reputation: 45388

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Quote:
Originally Posted by RaleighBoundGeek View Post
NRG - the million dollar question is whether they got 98% of their *original* asking price. I've noticed that these types of calculations tend to be based on the LAST price listed before it went under contract. That's hardly an accurate statement if it "sat" on the market for a year and over that year dropped 50K BEFORE the final offer was within 2% of that asking price.

Since I have been watching several houses while waiting for my own to sell - I have noticed that many houses play that "on the market"/"off the market" game, with the prices dropping while they're off the market. Not that I don't understand why people do that (I've done it myself) - it just invalidates all of those statistics (time on market, price sold versus price sought, etc...).

Bottom line is - unless you actually track them from day 1 when they listed THE FIRST TIME until the day they actually sold - I don't think you'll get an accurate picture of that number.
Speaking in generalities:
A prior price drop is not relevant in the legendary 97%-98% discussion.
Days on market is not relevant either, as cumulative DOM is just a measurement of wrong pricing.

The house sells when the price is right, and that is why a great many sales fall into the 97%-98% range. It is a regionally customary range of sale price vs. listing price.
Most Buyers are uncomfortable with lowballing, and most lowball offers don't create a sales transaction.
When a house isn't sold for an extended period of time, the price is wrong. Plain and simple. That lack of sale is the market telling the Seller that the price is wrong, for whatever reason.
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Old 09-05-2007, 11:42 AM
 
9,848 posts, read 30,204,634 times
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RaleighBoundGeek (or RBG!)

FWIW, The homes I am keeping an eye on are in my very small neighborhood. I know the people who are selling them and I know exactly when they hit the market for the very first time so in this case I always know the “original” asking price. Most times they are priced right in line with comps and go under contract within a couple of weeks and close at a sale price around 98% of the list price. The last house to sell was under contract in 6 days and got 98% of the list price. On the flip side, I had another neighbor who recently listed their house out of step with recent comps. It sat on the market for two months and then had a price reduction that put it back in line with the comps. After that it had a contract within 2 weeks and closed at 98% of the reduced priced.

Another house in my neighborhood is a former rental and has been vacant for the past 6 months. The owner listed it a few months ago but his asking price is ridiculous high. Needless to say it is still up for sale. I doubt it will get an offer until he drops the price.

The observations I make are for my neighborhood. I am not a pro, just like to play pretend and watch things sell in my neighborhood.

I hear what you are saying though, it is real easy to tease these statistics one way or the other. Liek I said, I just watch for fun!

Last edited by North_Raleigh_Guy; 09-05-2007 at 11:51 AM..
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Old 09-05-2007, 11:44 AM
 
Location: Raleigh, NC
282 posts, read 833,551 times
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Mike -

Agreed on all points. Just punching holes in the validity of the statistics. I'm surprised they're even published anymore: I've heard lots of conclusions attached to each, like "this is a hot neighborhood, the time on market is xxx", or "this neighborhood retains value, the houses are selling at yy% of asking". When both are being gamed through various gimmicks, or the entire region has the same number, then the stats per se become irrelevant.

After all - per your own point - if the entire area has a 97/98% - what does it say about your house retaining value? Nothing - it points to the fact that people don't like to offer/entertain lowball offer. The number is fine, I suppose - it just doesn't mean what some would like to use it for.
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Old 09-05-2007, 12:01 PM
Status: "Made the Retirement Run in under 12 parsecs!!!" (set 1 day ago)
 
Location: Cary, NC
43,062 posts, read 76,604,643 times
Reputation: 45388
Quote:
Originally Posted by RaleighBoundGeek View Post
Mike -

Agreed on all points. Just punching holes in the validity of the statistics. I'm surprised they're even published anymore: I've heard lots of conclusions attached to each, like "this is a hot neighborhood, the time on market is xxx", or "this neighborhood retains value, the houses are selling at yy% of asking". When both are being gamed through various gimmicks, or the entire region has the same number, then the stats per se become irrelevant.

After all - per your own point - if the entire area has a 97/98% - what does it say about your house retaining value? Nothing - it points to the fact that people don't like to offer/entertain lowball offer. The number is fine, I suppose - it just doesn't mean what some would like to use it for.
You're right about days on market. It is a known minor scandal within the Realtor community, but deeply ingrained and will be difficult to change. Some regional MLS's have a CDOM number. "Cumulative Days on Market." Some specify that a Withdrawn listing cannot be re-entered within 30 days of withdrawl.
The statistics for DOM require a great deal of homework to be supported or projected in any meaningful manner.

I call it the "legendary 97%-98% number" because it is surprising how often it is borne out. You can calculate an offer based on comps and through offer and counters end up at 98%, and that is where the deal consummates.
Oddly enough, it is fairly common, without 98% being a target. I think there is a predisposition that nudges us there passively, unconsciously...
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Old 10-13-2013, 12:37 AM
 
199 posts, read 998,896 times
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Quick question - does the package sale price on new construction include the land purchase or does it depend on whether the buyer bought the land and built on it later or if the builder bought the land?
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Old 10-13-2013, 06:28 AM
Status: "Made the Retirement Run in under 12 parsecs!!!" (set 1 day ago)
 
Location: Cary, NC
43,062 posts, read 76,604,643 times
Reputation: 45388
Quote:
Originally Posted by Nadjalou View Post
Quick question - does the package sale price on new construction include the land purchase or does it depend on whether the buyer bought the land and built on it later or if the builder bought the land?
Yes, it depends.
Often you will see a $600,000 home with a tax rolls purchase price of $80,000, which represents the purchase of the lot, because the record shows when the deed conveyed to the owner.
When the buyer buys a land/home package, the package price is the recorded sales price.
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Old 10-13-2013, 10:16 AM
 
Location: Raleigh, NC
12,475 posts, read 32,150,897 times
Reputation: 9450
NRG...I know where you live!!! And you know I know where you live!!!

I sent you a message.

Vicki
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Old 10-13-2013, 10:35 AM
Status: "Made the Retirement Run in under 12 parsecs!!!" (set 1 day ago)
 
Location: Cary, NC
43,062 posts, read 76,604,643 times
Reputation: 45388
Necro- Thread....
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