Seattle Bubble

We like this house a lot. It's currently listed at $750k. I think 650K is more reasonable, what say you?

http://www.redfin.com/WA/Seattle/7322-9th-Ave-NW-98117/home/495348

based on the two recent comparable sales linked below and the limited info I can get sitting at my computer, I'd say more like $600,000.

http://www.redfin.com/WA/Seattle/520-N- ... ome/299037
This house has the same number of beds, baths, sq ft & lot size less than a mile away, and sold for $550,000. However, I can't see any pictures so you can't know what condition the house was in.

http://www.redfin.com/WA/Seattle/6541-2 ... ome/164015
This house has less square feet, but more beds, baths & larger lot size. It sold for $645,500. Based on the one photo I see and the build year of 2010, I'd say it's probably in as good (if not better) condition as the one you are looking at buying.

This is one of those times a Real Estate agent can help you. In the remarks of the house you chose for $750K it says Owner/Agent. It would be nice to see who the owner is and how much they paid. Then you would to a Comaparative Market Analysis and use it to negotiate.

If the owner is an agent then the buyer pool shrinks unless it's a screamin' deal. Agents over price thier own houses and wait. It's helpful to have a strong negotiating strategy to get them to move.

You are correct that the price seems high. It would also be good to know what has been done to the house to make extra special.

The book Freakonomics has a good chapter on this phenomenon. The author uses it as evidence that real estate agents don't actually work in the best interest of their clients.

An agent makes money two ways, selling more houses faster (i.e. sell it at a low price so it sells quickly), or selling houses at a high price. The former is against the client's best interest, the latter is in favor. He points to the the fact that when agents sell their own homes, they are on the market for significantly longer. This shows that when the agent is selling it for someone else, they are most concerned about making their commission and moving on, so they are willing to sell the house for less in order to sell it quicker, working against the best interest of their clients.

Makes perfect sense when you think of it that way, but none the less interesting and something to keep in mind when you work with a real estate agent.

And yet, in a declining market, it's not a good time to continue to hold your house that's for sale, waiting to get your price.
It's not in Freakanomics, but there were a ton of real estate agents who bought houses at the top of the bubble, and a ton of real estate agents who have short sold their homes and/or been foreclosed on. They drank the Kool-Aid and continue to.

This is a discussion that I personally have with every brokerage that I have ever worked for. It is cheaper, and easier, to buy and sell properties for yourself, or for an investor, than getting out there, and hustling up those listings for sale.

Number one, the client doesn't understand the process of buying and selling Real Estate so you start over every time. In most cases the seller has to do things to make the house more salable. Very few Real Estate agents have the ability to communicate what it takes to make the property the most appealing to the largest buyer pool. There again the very vast majority of Real Estate agents are absolutely clueless about what makes a property a good value for the buyers they work with. So you have to cater to the idiot factor of Real Estate agents. That's why staging is so effective. The staging is more for the Real Estate agents than the buyer pool. I like to say that Real Estate agents sell stainless steel appliances with properties the appliances come in.

All that leaves is the price as a selling point. Real Estate agents sell price more than they will sell refinished hardwoods, new appliances, painted walls, or staging. "It's a screaming deal, the least expensive home in the neighborhood," is the most common selling tool the Real Estate agent has.

On the other hand, an agent's personal residence, in theory, has all of the things the buying public, and other agents, could want in a property. So agents feel they have a higher probability to scmooze the buying public. Ultimately this is a listing that won't expire, so they know they have the time. When working with a seller you are competing with a thousand other agents who are talking trash, and trying to get the listing away from you.

Ira said: "but there were a ton of real estate agents who bought houses at the top of the bubble, and a ton of real estate agents who have short sold their homes and/or been foreclosed on. They drank the Kool-Aid and continue to."

Don't forget some Managing Owner Brokers of offices in that group.

It's pending inspection now. I'll be curious what it sells for if it goes through.

Wow, sold last month for just 2% below the asking price: $735,000 It was a nice home, but kind of surprised someone ponied up for it.