Funny how buyers think they are the only ones buying. As I pulled up, I was rerouted to the next street down to take the “shuttle!” About 20 Mercedes Benz, Lexus, and BMWs lining the road.
At the right price there are always buyers looking for “bargains.” In this post I want to unravel the new techniques in trying to move (sell) mansions and estates in Great Falls Virginia. It also relates to other areas as well.
System #1: Auction
Auctions are sexy. Make sure to get a bunch of people in a room and get each other excited. Even the Open House was only 1 hour, so it looks 4x more packed then a normal 4 hour Open House. But it was packed and my buyers were amazed.
This auction was requiring bidders to bring a $150,000 cashier’s check before you could bid. The “starting bid” was $1.5M. But that means nothing. That is 100% marketing. Why? Because there is an unpublished “reserve.” So even if only 1 person bids at $1.5M, they still won’t sell it to you (most likely). So why not start at $178.72? Because $1.5M lets you think for a second that you might get it for that! And they use you to bid up the next guy.
And on TOP of that… this auction has a “10% Buyer’s Premium.” Oh and did I mention is it also a Short Sale to boot? Bid up all you want, the bank will likely still make a counter.
I have to give it to this Auction company though. They WERE able to sell one home this way. And that says a lot. If this company had never sold one, I would likely 100% write it off. For the one that DID sell, it sold for $500k under tax assessment. It probably also started at $1.5M, but sold for $2.5M. No 1/2 price firesale here.
System #2: BANKRUPTCY.
The seller is in “bankruptcy” so all offers are encouraged (see below). It is not clear to me who actually is selling the property. Does the builder have the right to agree to a price, or does the bank have a say? Does the bank have the only say? Or is it a court?
People ask me “what will it sell for?” Heck I have no idea. This is all unchartered waters. All I can do is look up past data to see if I can predict the future. So I did a Realtor MLS historic search for 10 years for the word “Bankruptcy” from $1m to $4m.
Only 1 had sold in Northern Virginia.
Listed for $1.05m, sold for 1.1m (over list)
And two others “withdrew.”
One of those was listed at $1M and came back onto the MLS a year later as a bank owned and sold for $750,000.
System #3: Bank REO
These are regular bank owned properties for sale. They have already undergone the other tricks and marketing techniques and they are serious about selling. Since 2007, in all of Fairfax I found 13 over $1m . Link to Fairfax Bank Owned and Sold via the MLS
Most of them sold AT list and a few within 10%. How can that be? Well if they are priced right, below “market,” they will sell fast.
These are the best options. I recommend signing up for email alerts via FranklyMLS for the phrase: Cityname Bank like this: Great Falls Bank (note that this site searches the remarks, so if it says “near Suntrust Bank” it will come up in the results).
System #4: “Bring All Offers”
What does that really mean? Does that mean a $4M place will take a $1M offer? Not likely. Or at least I wouldn’t tell you about it, since I’d call my mafia friends and find a way to buy it myself (joke). So again, I look at data. What homes that have used the phrase “Bring All Offers” have sold in Great Falls or Fairfax over $1 million in the last few years…? In all of Fairfax since 2007, only 8 have sold.
Lowest List Closed Price
I don’t see any huge firesales. I do see two that were 20% off though. So you know an offer 20% below shouldn’t be laughed at. See all 8 “Bring All Offers” Homes Sold
More interesting facts:
How many homes have sold in Fairfax since 2008+ for over $2M? 109 homes sold.
Only 24 were in Great Falls, most were in McLean.
Only 7 have sold in all of Fairfax (including Great Falls and McLean) from Jan 1 2009 to March 1st 2009. Oh yeah one said “Motivated seller” in all caps. Listed at $2.2M sold for $1.9M.
If you are looking in this price range let me know, I can pull some more specific data for you. Whatever you do, don’t just call the listing agent. Having a buyer agent can help you save a ton in the end, if they are good with data analysis.
Soon I want to blog next about creative financing for these higher price estates. Why? Who wants to sell off their stock at a 50% loss to buy a home for a “deal?” (see Luxury Homes blog post) Including full seller financing, or a mix of a bank loan and partial seller financing, also called Seller held trust (either with interest or a balloon payment in 5 years).
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