Author Topic: Let's pay $782,000 over asking for a home!  (Read 2113 times)

radicaledward

  • Bristles
  • ***
  • Posts: 377
Let's pay $782,000 over asking for a home!
« on: September 13, 2017, 11:09:18 AM »
Came across this one today: Now this is ridiculous: $782,000 over asking for a house in Sunnyvale.

I must be missing something since I don't know how anyone thinks that is a good idea this this point.

honeybbq

  • Pencil Stache
  • ****
  • Posts: 685
Re: Let's pay $782,000 over asking for a home!
« Reply #1 on: September 13, 2017, 12:10:24 PM »
That happens here in Seattle, too, though not that much.

But MANY houses go 100k-250k over asking in a bidding war in our area, not surprised it's higher in CA.

This seems like a calculated ploy by the sellers to drive up bidding: "“We anticipated it would go for $2 million, or over $2 million. But we had no idea it would ever go for what it went for.” (And they started the price at 1.6)

Reminds me of ebay listings: 1 CENT NO RESERVE - gets a ton of people in the door and stirs up traffic.

talltexan

  • Pencil Stache
  • ****
  • Posts: 843
Re: Let's pay $782,000 over asking for a home!
« Reply #2 on: September 14, 2017, 08:34:11 AM »
If you're in a multiple offer situation, and you win, then presumably you've paid market price. There were other bidders willing to pay about as much as you.


Drifterrider

  • Handlebar Stache
  • *****
  • Posts: 1113
Re: Let's pay $782,000 over asking for a home!
« Reply #3 on: September 14, 2017, 09:05:49 AM »
One must bait the hook to catch the fish.


zolotiyeruki

  • Handlebar Stache
  • *****
  • Posts: 2151
  • Location: State: Denial
Re: Let's pay $782,000 over asking for a home!
« Reply #4 on: September 14, 2017, 09:51:11 AM »
That happens here in Seattle, too, though not that much.

But MANY houses go 100k-250k over asking in a bidding war in our area, not surprised it's higher in CA.

This seems like a calculated ploy by the sellers to drive up bidding: "“We anticipated it would go for $2 million, or over $2 million. But we had no idea it would ever go for what it went for.” (And they started the price at 1.6)

Reminds me of ebay listings: 1 CENT NO RESERVE - gets a ton of people in the door and stirs up traffic.
That's exactly right--sellers will often underprice the home in order to entice multiple potential bidders.  The idea is this:  by underpricing the home at first, they get more people to look at it.  The sellers might think the home would sell for $2 million, but if you get a few people whose budget is $1.75 million to look at it, they might decide to increase their budget and jump into the bidding war.  You *know* the home is going to sell for at least $2 million, but having more bidders means you're likely to sell for even more.

Dicey

  • Walrus Stache
  • *******
  • Posts: 5794
  • Age: 59
  • Location: NorCal
Re: Let's pay $782,000 over asking for a home!
« Reply #5 on: September 14, 2017, 09:57:05 AM »
We bought our not-in-Silly-Valley house in 2013. It was listed for 800k. It drew twelve other above-asking offers. We had to pay 928k to get the property. Zillow claims it's now worth over 1.35M. Interestingly, Zillow "Zestimates" are typically low in this market. Nuts. Fucking nuts!

I totally believe this story. Funny, Sunnyvale was considered so not cool for ages. They used to call it "Scummyvale". Nothing wrong with the area, just perception, I guess.
I did it! I have a journal!
A Lot Like This
And hell yes, I am still moving confidently in the direction of my dreams...

ms

  • 5 O'Clock Shadow
  • *
  • Posts: 53
Re: Let's pay $782,000 over asking for a home!
« Reply #6 on: September 14, 2017, 09:59:09 AM »
I saw the headline and thought "Welcome to Toronto." There are a few areas where houses sell for 150% of asking price, so easily half a mil over.  The bidding wars are crazy here and you just know that when the house goes on the market and states that it's not accepting offers until next Tuesday or whatever that they are just waiting for multiple offers.

We went to an open house over the summer that was listed for around $900k.  The real estate agent said that they had 180 people come through between Saturday/Sunday of the open house.  They were taking offers starting next week.  I didn't see what they actually sold for, but I bet it was close to 1.4 mil or over.

This in particular sucks for us because this way we cannot tell whether the house will actually be for 900k or sell well over.  We have now signed up with an agent and so hopefully they'll guide us through the listings but it's disheartening to see what the actual prices are vs the asking prices.

GuitarStv

  • Walrus Stache
  • *******
  • Posts: 8796
  • Age: 36
  • Location: Toronto, Ontario, Canada
Re: Let's pay $782,000 over asking for a home!
« Reply #7 on: September 14, 2017, 10:18:13 AM »
I saw the headline and thought "Welcome to Toronto." There are a few areas where houses sell for 150% of asking price, so easily half a mil over.  The bidding wars are crazy here and you just know that when the house goes on the market and states that it's not accepting offers until next Tuesday or whatever that they are just waiting for multiple offers.

We went to an open house over the summer that was listed for around $900k.  The real estate agent said that they had 180 people come through between Saturday/Sunday of the open house.  They were taking offers starting next week.  I didn't see what they actually sold for, but I bet it was close to 1.4 mil or over.

This in particular sucks for us because this way we cannot tell whether the house will actually be for 900k or sell well over.  We have now signed up with an agent and so hopefully they'll guide us through the listings but it's disheartening to see what the actual prices are vs the asking prices.

Yeah, the underpricing in this city is silly.  It's pretty common practice to under price homes by a huge margin.  It was really annoying when we were looking for our house, wastes a lot of your time.

ms

  • 5 O'Clock Shadow
  • *
  • Posts: 53
Re: Let's pay $782,000 over asking for a home!
« Reply #8 on: September 14, 2017, 10:50:20 AM »
Yeah, the underpricing in this city is silly.  It's pretty common practice to under price homes by a huge margin.  It was really annoying when we were looking for our house, wastes a lot of your time.

Agreed!

So right now there are two homes for sale in the area we're looking at (Bathurst north of 401) and one is for 999k and other is for 1.1mil. The more expensive home has a larger property but less desirable location as it's across the street from an apartment complex vs a residential single home kind of street.  The 999k home is hoping for multiple offers.

We are just watching to see what they both sell for as that should give us a better idea of the actual prices.  Which may mean that freehold home ownership within the city may be out of our reach.

Undecided

  • Pencil Stache
  • ****
  • Posts: 874
Re: Let's pay $782,000 over asking for a home!
« Reply #9 on: September 14, 2017, 09:22:14 PM »
Yeah, the underpricing in this city is silly.  It's pretty common practice to under price homes by a huge margin.  It was really annoying when we were looking for our house, wastes a lot of your time.

Agreed!

So right now there are two homes for sale in the area we're looking at (Bathurst north of 401) and one is for 999k and other is for 1.1mil. The more expensive home has a larger property but less desirable location as it's across the street from an apartment complex vs a residential single home kind of street.  The 999k home is hoping for multiple offers.

We are just watching to see what they both sell for as that should give us a better idea of the actual prices.  Which may mean that freehold home ownership within the city may be out of our reach.

I suppose that's one reason to use an agent as a buyer---to have someone narrow the viewings to those homes that may realistically be expected to sell within your budget.

The only relevance listing price had in the last listing agreement I signed was that if I refused an unconditional offer at or above listing price, I was obligated to pay commissions. I actually had to "fight" the listing agent to bring the listing price up to an amount I would actually accept, rather than the amount she thought would "drive the most traffic." She didn't want to "change the form" to eliminate the obligation to pay the commission if I rejected a full-priced unconditional offer.

lhamo

  • Walrus Stache
  • *******
  • Posts: 5619
  • Location: Seattle
Re: Let's pay $782,000 over asking for a home!
« Reply #10 on: September 14, 2017, 09:33:25 PM »
Not quite that bad, but one of the houses we looked at in Seattle was listed for 1.075 and sold for 1.51.  It needed at least 200k worth of work (Basement needed a gut remodel, and the kitchen was from the 1970s).
Wherever you go, there you are

FINate

  • Pencil Stache
  • ****
  • Posts: 632
Re: Let's pay $782,000 over asking for a home!
« Reply #11 on: September 14, 2017, 11:44:42 PM »
I must be missing something since I don't know how anyone thinks that is a good idea this this point.

Very short commute to Google, Facebook and the new Apple campus. Many couples have dual tech incomes, which can each easily be $200k+ after bonus and equity. Many transactions are cash. The price they paid is in line with that area (even after the overbid on low starting price), crazy as that seems. Working at the big tech companies pays the big bucks but you have to live somewhere and there's very little inventory. Rents for 2-3 beds are also crazy ($4-5k or higher). Prices are lower in SE San Jose or Morgan Hill/Gilroy, but traffic on 85 and 101 is atrocious. My biggest concern would be the ~$30k in annual property taxes due.

MgoSam

  • Magnum Stache
  • ******
  • Posts: 3404
  • Location: Minnesota
Re: Let's pay $782,000 over asking for a home!
« Reply #12 on: September 15, 2017, 08:46:20 AM »
Not to mention that for people that are willing to be a distance from Google but want to use Google provided transportation, they face the risk of people protesting and throwing egg at the bus windows.

Abe

  • Pencil Stache
  • ****
  • Posts: 795
Re: Let's pay $782,000 over asking for a home!
« Reply #13 on: September 15, 2017, 11:19:23 PM »
I'm living in santa monica right now, and realized two things

1) turns out our family needs a lot less house-space than we thought
2) there's no way we are going to stay long-term in a housing market this nuts

Which got me to a third realization: I could buy a decent-for-us house in approximately 90% of the US for less than one year's salary for the wife and me.

This is a crazy world.

FINate

  • Pencil Stache
  • ****
  • Posts: 632
Re: Let's pay $782,000 over asking for a home!
« Reply #14 on: September 16, 2017, 10:22:59 AM »
I'm living in santa monica right now, and realized two things

1) turns out our family needs a lot less house-space than we thought
2) there's no way we are going to stay long-term in a housing market this nuts

Which got me to a third realization: I could buy a decent-for-us house in approximately 90% of the US for less than one year's salary for the wife and me.

This is a crazy world.

Making big bucks in a HCOL area for, say, five years and then retiring to a LCOL area is a reasonable strategy. It's cost of living arbitrage. From a market perspective it's good as well; get in, make your money, then move on and make room for someone else. The trick, I think, is keeping your expenses low enough that you can save enough of your high income to make it work. Google is known for having a number of very highly compensated employees who lived in cars in their parking lot and then retire elsewhere or paid cash for a house.