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$782k over asking for a house in Sunnyvale

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Re: $782k over asking for a house in Sunnyvale

#51

Post by ryandamm »

loeg wrote: post #44
eigenvalue wrote: post #20

Earlier quoted context omitted.

I think you're on to something here; usually when you see transactions that seem absurd from the outside, there is some other angle that you don't know about (like, you can rip down the existing house and build one 3x the size that you can sell for $8mm).

Or 6-7 smaller houses and sell them for ~$1m each.

Not on a 13k square foot lot!

But yeah, that has happened elsewhere in the Bay Area. (Zoning tends to prevent it, though, so there's an element of regulatory arbitrage.)

Re: $782k over asking for a house in Sunnyvale

#53

Post by ryandamm »

Iknowsecurity wrote: post #39

A colleague that was looking to buy a house last Spring said that the house he put a bid on in San Francisco sold for 100% above the listing price.

I assume that's last "spring," and not that your team is doing agile real estate sprints. But I'd be happy, and rather curious, to be wrong....

Re: $782k over asking for a house in Sunnyvale

#54

Post by victorNicollet »

planteen wrote: post #23
victorNicollet wrote: post #13

In France, there's no such thing as paying over the ask price. You are forced to sell to the first buyer who offers to pay the ask price. I suspect that this is done to prevent prices from rising too quickly.

Are houses ever sold in auctions in France? How long are typical houses on the market? It seems in this situation that you would start the house price high and then lower it over weeks/months until you get an offer. In the US, sometimes houses are priced "low" intentionally and the listing agent says something like "offers will be accepted until noon Monday" to encourage over asking, all cash offers, and waiving insp…

There are auctions, but those follow an entirely different set of rules. You have a few weeks to visit the property, then you either mail in your bid or come to the auction house on the final day. Most of what you'll see in those auctions is being sold for legal reasons (such as bankruptcy).

http://www.notaires.paris-idf.fr/immobilier/ventes-aux-enche...

Re: $782k over asking for a house in Sunnyvale

#55

Post by jondubois »

jarjoura wrote: post #7

Yes South Bay is so overpriced right now it’s ridiculous. Keep in mind that 5 years ago that same house would have sold for 650k and even then people would have been complaining that’s it was way overpriced. One things certain, east bay across the 84 is still under a million at the moment. I suspect that will change soon.

Yes, I bet that in the near future, a modest house will cost $20 million, Bitcoin will be $100K per coin and Facebook will be a $10 trillion company. Poor SV suckers will spend their lives paying off their $20 million shoeboxes with their $500K per year salaries. Meanwhile I will be living in some exotic place in a mansion which I will have bought for $200K. I like where the future is going.

Re: $782k over asking for a house in Sunnyvale

#56

Post by rtpg »

sulam wrote: post #28
habosa wrote: post #5

Aside: I don't think it should be legal to not accept the asking price for a home. With any other thing I want to buy, if I agree to pay the list price I get the item. Sometimes I can haggle the price down but the listed price is always accepted. This system of listing a price to 'get people in the door' and then igniting a bidding war makes it impossible for anyone to shop for a house except for realtors who are 'in…

You can, with a modicum of effort, learn the market as well or better than a real estate agent. You're only interested in a small slice of the houses that are on the market (at least in the Bay Area, supply is very low here). It's worth going to open houses, looking at asking prices, and then following up on what happened to that property. Spend at least 6 months getting to know the market for the neighborhoods and t…

>You can, with a modicum of effort, learn the market as well or better than a real estate agent

This is the sort of reasoning that people say that pay for the used car salesman's boat.

You are going to buy, what, 5 houses in your life? If you're a big mover.

Real estate agents spend their entire life doing the thing you do once every couple of years at most. Why do you think you'd be better than them?

This is like saying that you, as the person who walked out of a 48-hour boot camp, can code that JS program better than the veteran programmer because she doesn't specialize in Javascript.

You want to spend 6 months doing research? Real estate agents are spending years! There's a bit of principle-agent problems when working in this, but still. Beyond the information parity, there's simply knowing how to do sales and getting people to sign the contract.

Re: $782k over asking for a house in Sunnyvale

#57

Post by loeg »

blackskad wrote: post #43
lsadam0 wrote: post #12

Earlier quoted context omitted.

> Aside: I don't think it should be legal to not accept the asking price for a home. You're attacking basic supply and demand here. Let's say I set a list price and then figure out I could have asked for more...you want to legally bind me to sell for less than what the free market is willing to offer? Where does this stop? Should we ban speculative investments as a whole?

No, it just reverses the dynamics: instead of starting out low to get people into the door, you start with a list price that's too high. If the bids you're getting are always far below your asking price, you know the free market isn't willing to cough up what you want, and you lower the price to something that is more in range. If your initial asking price is $1MM and all bids are around $800K, consider dropping the…

So why is this better, exactly? Seems like it just takes longer to accomplish the same goal (finding FMV). Buyers are still not guaranteed their offer will be accepted unless they gratuitously overpay (by offering list price).

Re: $782k over asking for a house in Sunnyvale

#58

Post by hkmurakami »

brianwawok wrote: post #45
aqpgreendragon wrote: post #18

Earlier quoted context omitted.

They aren't paying that much for the house. They're paying that much because it's located in a good area. They'll knock it down and built a brand spanking new house and sell that for a profit. This happens every day in hot real estate markets

The description kind of hinted the lot would be big enough for 2 houses. Would the local lets law you flatten the house, build 1 house to live in on half the land, and say sell the other half of the land for a million bucks to a developer?

You go through a city planning commission to do the sudivison.

Re: $782k over asking for a house in Sunnyvale

#59

Post by koolba »

> The four-bed, two-bath house — less than 2,000 square feet — listed for $1,688,000 and sold for $2,470,000.

Using a ballpark figure of $500/mo per $100K of house, this comes out to $12,500/mo. That's $150K/year, mostly after tax (there's a bit of a deduction for interest but let's ignore that for now). Using the standard 30% rule, that means you should have a gross income of about $500K.

What I'm questioning is, how many people are there with that income level to eventually sell these insanely expensive houses to? Sure you have a bunch of all cash offers but that eventually dries up as well right?

Plus 4BR at 2000sqft isn't particularly spacious. And only two bathrooms at that size? IMHO that's insane.

Re: $782k over asking for a house in Sunnyvale

#60

Post by Svip »

JustAnotherPat wrote: post #34
victorNicollet wrote: post #13

In France, there's no such thing as paying over the ask price. You are forced to sell to the first buyer who offers to pay the ask price. I suspect that this is done to prevent prices from rising too quickly.

Can you just overprice it and let bidders fight on lower than asking? Essentially the same thing, but with different psychology. I wonder how it would play out differently.

If France is anything like Denmark, the price is usually based on a combination of a public and a private valuation of the house (both of which are available to buyers upon request). You can give it any price you want, but since buyers can get an insight to its valuation, the asking price is usually around its valuation.

So as I understand it, the strategy is usually to sell the house for a much higher price than its valuation, hoping someone is really interested in the house. And as time passes, you keep lowering the price until you get a buyer.

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