Real Talk Ken Edwards Sales slow this weeks, tips on how to price an expired listing
Only eleven properties sold last week, exactly half the previous week’s total and about half the dollar volume at $19.5 million.
In the mix were six single-families, four condos and a three-family property composed of a two-family and a cottage on Havemeyer Place, my sale of the week. It sold for $1.75 million with annual rents of $80,400. That’s a GRM (gross rent multiple) of 21.8 or, put another way, 21 years, nine months to pay back the investment before expenses including maintenance, taxes, insurance and water bills. Accordingly, it’s my sale of the week.
My buy of the week selection is a newly constructed home in Riverside on Club Lane or Miltiades Avenue or Wigmore Street, depending on your preference of address. I’m not kidding. The house faces Miltiades Avenue with a walk to the curb. The driveway is off Wigmore Street and is No. 9. The spur off Wigmore to enter the driveway is called Club Lane and it’s not far from Club Road. Confused? You’re not alone.
Buy of the week
Listed for $3,795,000 in early February, this newly constructed center hall colonial in sought-after Riverside was sold for about 24 percent less after a total market time of 464 days. It’s my buy of the week because it represents significant value at its selling price of $2.9 million. That’s an $895,000 discount off the builder’s original asking price.
This home is a five-bedroom, four-and-two-half bath house with a three-car garage on 0.28 acres. The finished space is 4,822 square feet. It includes all of today’s wantcha’s like an open concept kitchen/family room with not one, but two fireplaces (five total in the home), a formal dining room with coffered ceilings and fireplace and appliances off the high end of the price list. You know the rest of the new high-end home list so no need to repeat it here. If you’re thinking it, this home has it.
The previous home on the site was a ranch that sold for $1.1 million in September 2016. This is just one more example of what’s happening to our grand list of taxable properties and why our mill rate is holding constant this year despite an increased town budget. Oh to be in Greenwich!
Sale of the week
My sale of the week selection was a 1915 home last renovated in 1985. It’s an interesting property on 0.27 acres with a two-family home up front and a cottage in the back with an attached two-car garage. All three units are rented with two bedrooms in each and two of the three have a powder room in addition to one bath.
The cottage offers an opportunity for in-town living for an on-site owner if that’s their wish, or a third income if not. This is primarily an investor property where all three units together generate about 4.6 percent on the investment before expenses. After expenses? Not sure. That’s called net capitalization rate for you number crunchers.
Price fixes everything
This is the last of four sidebars on my advice to owners for expired listings. Over the last three weeks I’ve written about what owners can do after experiencing an expiration of their real estate listing without a sale. The elephant in the room/house is price. Remember that the three main criteria for success in real estate sales are location, condition and price, in that order.
To bring the point home consider the following reductio ad absurdum argument. If you were to ask 10 times the appraised value of your home what would happen? Do you think there’d be any interest from serious buyers? Any showings? Any offers? Of course not.
Now consider what would happen if you asked $1 for your property. How long a line would form around your block? I don’t even know where you live, but I’d be first in line.
Now let’s get real. If you asked 10 percent less than comparable properties were asking what do you think would happen? I think you know.
Your property would compete well in your market of comps and you’d most likely get offers. Perhaps you’d get multiple offers and you might even sell for a price higher than your asking price and that of the comps you’re competing against.
It’s called a “bidding war” and the emotions of the competing buyers cause them to raise their offer until they “win.” Actually, you win, but don’t tell anybody.
That’s the best advice I can give you on setting an asking price if you’re serious about selling. Remember that in Greenwich, as I’ve observed, the average percent of original asking price that sales go off at is about 93 percent.
Last week it was 91 percent. But that’s for those which sold. What about all the others that they were competing against?
Consider whether you really want to sell and move on with your life or just spend your time and your agent’s time and resources to play the real estate game. Seriously.
Price really does fix everything, including location and condition if that’s your issue.
This Week’s Success Quote
“Price is what you pay. Value is what you get.”
— Warren Buffett
Ken Edwards is the principal Broker for Edwards & Associates Real Estate and has lived in town since 1974. All opinions expressed are entirely his own and not those of this publisher. Comments and questions may be sent to K_W_Edwards@ Yahoo.com or call.