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My sister-in-law and my brother are buying a new house and selling an old house in North County (downsizing). I'm wondering if their realtor has failed them because they seem to be buying high and selling low, at least to me.
They own a beautiful, move-in ready home in Rancho Penasquitos, 3 car garage, 2 stories, 2600 sq ft originally built in the 80's but has been extensively upgraded with all hardwood / laminate floors, with a remodeled kitchen & master bath w/ new granite counter and cabinets, and a viking stove and high end appliances. They have panoramic private views in the backyard overlooking Carmel Mountain and Poway area.
They purchased a new house in Rancho Bernardo, 2 car garage, 1 story, 1600 sq ft house built in the 60's with beautiful golf course views. That house requires a total interior renovation as the cabinets are worn, the flooring is old and dated. They plan to spend $80k on the renovation for new kitchen, bathrooms, flooring, paint, appliances.
They purchased the new house in Rancho Bernardo at $418 per sq ft, and after renovations - it will be around $488 per sq feet. The new house was sold 2 years ago to the previous owners for $100k less than what they are buying for.
The old house is being sold at $288 per sq ft. That's a huge disparity of $130 - $200 per sq feet less for the old house, even though it's only 10 minutes away and 3 freeway exits away.
Interestingly, 2 years ago, they tried to sell their old house. They entered into contract 2 years ago to sell their old house for only $31k less than the current sale price, after having it on market only 1-2 days with multiple offers. The sale didn't complete because the buyer's financing fell through, and they had second thoughts about moving at that time and decided not to sell at that time.
So I find it very odd that their old house could sell for so much less, and only appreciated $31k over 2 years (compared to the prior sales price which was extremely competitive at the time), while their new house costs so much more per sq ft, and the new house appreciated $100k - $180k over the same period of time.
They used the same realtor on the buy side and sell side. I'm wondering why the realtor didn't warn them that they were over-paying on the new house, and then the same realtor warned them that they wouldn't get much more for the old house. I don't think the realtor can have it both ways - have them over-pay for their new place, and under-sell for the old house.
I'm not as familiar with the San Diego real estate market, so I'm wondering what the locals think here. How on earth can there be such a huge disparity on the buy / sell side, with 2 homes so close to each other?
Last edited by AndroidAZ; 07-15-2016 at 10:05 AM..
Are your brother and sister in law happy with the way things turned out?
I ask because it is hard to tell from your post whether you are just curious about the San Diego market or want to stick your nose into their business and tell them they made a bum deal.
If you're just curious about the market, much depends on the development and area where you are buying and selling. RP and RB are two totally different real estate markets, and it sounds like you mainly have knowledge of RP. But, it really is not unusual for people here to buy homes that need extensive remodeling, especially in popular areas.
If you are concerned that your brother made an unwise choice, well, the deal is done. Unless your brother and sister-in-law have some sort of mental condition, such as Alzheimers, that makes it difficult for them to make decisions, it is probably best to just keep your opinions about the deal to yourself and be happy with them for their new living situation.
Are your brother and sister in law happy with the way things turned out?
I ask because it is hard to tell from your post whether you are just curious about the San Diego market or want to stick your nose into their business and tell them they made a bum deal.
If you're just curious about the market, much depends on the development and area where you are buying and selling. RP and RB are two totally different real estate markets, and it sounds like you mainly have knowledge of RP. But, it really is not unusual for people here to buy homes that need extensive remodeling, especially in popular areas.
If you are concerned that your brother made an unwise choice, well, the deal is done. Unless your brother and sister-in-law have some sort of mental condition, such as Alzheimers, that makes it difficult for them to make decisions, it is probably best to just keep your opinions about the deal to yourself and be happy with them for their new living situation.
No, I don't think they are too happy with the way things turned out. They purchased the new house first, and their realtor didn't blink an eye when they consulted the realtor when running the numbers, and their offer was the highest per sq ft in the area. Their realtor said it was a "good offer".
Now that they have been in the selling process, their realtor has turned negative, saying "$288 per sq ft is the most you'll get for this house, it may not appraise for more, yada yada yada." I think they are a little pissed but they can't change realtors at this point. Their realtor was trying to talk them down in terms of pricing, much to their surprise.
I'm involved because I'm gifting / loaning them money for the renovations, and I'm very close to them.
They are mentally healthy and no medical conditions. They just are very busy working to afford to live in San Diego, and relied on their realtor to help them make the best decisions on the buy / sell side.
So I'm trying to understand if there's any justification for the huge disparity in the the real estate prices in the two relatively close neighborhoods.
The deal on the sell side is not completely done, so there's a chance things may change. Another reason I'm inquiring.
The realtor works for them. Let's get that straight. What the realtor wants is inconsequential. You tell your relatives they declare the price. Have them tell the agent to pull sold comps. You'll figure out real quick a good asking price. And if the sold comps are all higher ask the agent to explain why he suggested you should ask a lower price. His job is to get you the best price possible. The market will set the price anyway. If it doesn't sell at their price they can always relist Adjust the price. If everything in the area is selling for more why would they have a lower price. Unless the agent is looking to get a bidding war. Have they asked what his strategy is to sell the house for the highest price possible. And they can simply fire the agent I push comes to shove. They can sell fsbo too. That's starting to work for some people.
Sounds like they unfortunately got a bla agent who is lookin for a quick sale to pocket his commission. And could care less to fight for them to get a lower price on their new house
Unless there is a huge difference in the areas one rich the other low income or blue collar the difference shouldn't be tens o thousands. Maybe a bit different but not 100,000 different. Comparing apples to apples size. And a completely remodeled house should be worth a lot more.
Last edited by Electrician4you; 07-15-2016 at 10:58 AM..
Got it. The fact that you are contributing money for the purchase puts a different spin on things. I too would want to make sure my money was being spent wisely.
What did the appraisal value come in at for the two homes when they closed escrow? Was it wildly off what they paid?
There can be discrepancies between listing prices and actual closing sales prices in an area. For instance, if you looked just at the listings for the road where I live, you'd see homes being advertised for $900,000 and up. But, if you look at the actual closing sales prices for the last six months, you'll see that there were a few homes that sold in the $700,000 range, and one total fixer upper that sold for $550,000. So, really, the "value" of all homes here is not going to be $900,000 plus if an appraiser was doing an appraisal of the area.
It could be that something similar is going on in your brother's area. If you haven't already done so, you can look at actual sales data for neighborhoods on Zillow.com. Choose the area, then under the buy tag, check the box for recent sales, and compare to the ads for current homes on the market.
If your brother and sister haven't closed escrow yet, I would probably suggest to your brother and sister in law that they talk to a different realtor who specializes in the area (RB) where they are buying and selling. If they need to get out of the contract(s), then a consultation with a real estate lawyer might be wise as well.
I think if they have closed escrow, then the deal is done. The only thing they can do at this point is try to sell the new home to recoup their losses if that is vital. OR they can consult with a lawyer about suing the real estate agent.
Quote:
Originally Posted by AndroidAZ
No, I don't think they are too happy with the way things turned out. They purchased the new house first, and their realtor didn't blink an eye when they consulted the realtor when running the numbers, and their offer was the highest per sq ft in the area. Their realtor said it was a "good offer".
Now that they have been in the selling process, their realtor has turned negative, saying "$288 per sq ft is the most you'll get for this house, it may not appraise for more, yada yada yada." I think they are a little pissed but they can't change realtors at this point. Their realtor was trying to talk them down in terms of pricing, much to their surprise.
I'm involved because I'm gifting / loaning them money for the renovations, and I'm very close to them.
They are mentally healthy and no medical conditions. They just are very busy working to afford to live in San Diego, and relied on their realtor to help them make the best decisions on the buy / sell side.
So I'm trying to understand if there's any justification for the huge disparity in the the real estate prices in the two relatively close neighborhoods.
The deal on the sell side is not completely done, so there's a chance things may change. Another reason I'm inquiring.
The realtor works for them. Let's get that straight. What the realtor wants is inconsequential. You tell your relatives they declare the price. The market will set the price anyway. If it doesn't sell at their price the. They were wrong. If everything g in the area is selling for more why would they have a lower price. Unless the agent is looking to get a bidding war. And they can simply fire the agent I push comes to shove. They can sell fsbo too. That's starting to work for some people.
Sounds like they unfortunately got a bla agent who is lookin for a quick sale to pocket his commission.
Unless there is a huge difference in the areas one rich the other low income or blue collar the difference shouldn't be tens o thousands. Maybe a bit different but not 100,000 different. Comparing apples to apples size. And a completely remodeled house should be worth a lot more.
I agree with you 100%. They did sign a listing agreement with the realtor so I'm not sure how easy it is to get out of the agreement at this point in time.
Also, I just noticed that they sold a home in Rancho Penasquitos and bought a home in Rancho Bernardo. Those are two very different markets. I would not be surprised if the "average" price of a home in RP is different than it is in RB.
I understand, but could the difference be so huge?
I understand, but could the difference be so huge?
It could be, depending on the specific house, neighborhood or development and what recent sales have been like in both areas.
No one here can really answer your question because we don't know the specifics of the houses, neighborhoods or deals. Basically, in situations like this, online advice is worth what you pay for it.
To put your mind at ease, call a real estate agent who specializes in those areas, or ask for an appraisal of both properties before the deal goes through to escrow. Or, if they want to get out of the deal entirely or break their contract with the RE agent, call a lawyer to help them back out of the deal.
It could be, depending on the specific house, neighborhood or development and what recent sales have been like in both areas.
No one here can really answer your question because we don't know the specifics of the houses, neighborhoods or deals. Basically, in situations like this, online advice is worth what you pay for it.
To put your mind at ease, call a real estate agent who specializes in those areas, or ask for an appraisal of both properties before the deal goes through to escrow. Or, if they want to get out of the deal entirely or break their contract with the RE agent, call a lawyer to help them back out of the deal.
Thank you Rosie. I did reach out to an appraiser to get a second sanity check.
Thank you Rosie. I did reach out to an appraiser to get a second sanity check.
And what did the appraiser say about the properties? If the appraisal for escrow was wildly under what they paid for the second property, then they may be able to get out of the deal should they want to, depending on where they are in the escrow process.
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