why why why would they do this????

[The Mystery Machine]

our neighbors just put their home up for sale. we don't know them more than a wave in passing (they are a bit standoffish), so can't really ask, but they put their home on the market for $40k less than comps are selling for in my area (and what their realtor recommended as a price...yes, we did ask her when we saw her taking pics). and since they bought 5 years ago, at the height of the market (just like we did!) so unless someone pays over asking, they will take at least a $100k hit.

they don't have a job transfer, are only moving 2 towns over, both have good paying jobs. we are just baffled as to why price it so low. If they found their dream home over there and just want a quick sale, they could have still asked for a bit more.

am just floored.

any thoughts as to why someone would go so low?

I think it is to grab the attention of people and then hopefully people will bid against each other since they see a "deal".

They are hoping the 40 gap closes a bit however are willing to risk the hit to sell it fast.

Plus, if they sell fast and get equity out of this house then they can put it towards the new house and then come out better long term there? Trashes your comps but helps them out with new house.

Be thankful you are not selling now.

 

[Disney1fan2002]

our neighbors just put their home up for sale. we don't know them more than a wave in passing (they are a bit standoffish), so can't really ask, but they put their home on the market for $40k less than comps are selling for in my area (and what their realtor recommended as a price...yes, we did ask her when we saw her taking pics). and since they bought 5 years ago, at the height of the market (just like we did!) so unless someone pays over asking, they will take at least a $100k hit.

they don't have a job transfer, are only moving 2 towns over, both have good paying jobs. we are just baffled as to why price it so low. If they found their dream home over there and just want a quick sale, they could have still asked for a bit more.

am just floored.

any thoughts as to why someone would go so low?

I have neighbors I know only by a quick wave hello. I don't know their names. I don't know what they do for work. I certainly don't know if they have good paying jobs or not. If they put their house up for sale, I would not know what they paid for it ( I could go to the town hall and look it up, if I were so inclined), and I would not know that they did not have a new job offer and were moving just 2 towns over.

How do you know all this from neighbors you only wave to?

 

[Nette]

I think it is to grab the attention of people and then hopefully people will bid against each other since they see a "deal".

They are hoping the 40 gap closes a bit however are willing to risk the hit to sell it fast.

Plus, if they sell fast and get equity out of this house then they can put it towards the new house and then come out better long term there? Trashes your comps but helps them out with new house.

Be thankful you are not selling now.

If you aren't planning on selling yourself, this really HELPS you. Your property taxes are based on comps in the area... so you could end up with a lower appraisal for tax purposes.

OTOH, Do you *know* what they paid for that house? How much they have left on the lein? It could be that they want out, and that's how much they have left on the lein. BTDT.

 

[phorsenuf]

My guess too is they don't want to carry 2 mortgages either. We did that once and it has so hard. Almost threw us into financial ruin. But it was a job move so we had to go.

Once again we are in the same position. Thankfully at the moment the house is rented out but if that should change then we may need to sell it and sell it quick. Will that affect the neighborhood, maybe, but ya know what, I'm not going to get into a financial bind because maybe, just maybe, it will effect my neighbors house value. Sorry, but that's just the way it is. And besides, if there are enough comps that are true on market, with one oddball that sold for considerably less, it really won't have a huge impact anyways. Banks and appraisers are well aware of the current housing situation and would take that into consideration, especially if noted as a short-sale.

 

[mtemm]

thanks all! we've thought of most of what people thought of here, but a few new ideas to ponder. if I ever see them outside I may try to strike up a conversation and see what is what, but knowing me I won't straight-out ask them about their reasons behind the pricing. in the end, while it does affect us, it is also none of our business. we were just very curious as to why start so low, especially since the house looks well maintained and we know what comps have been selling for in our area.

there has been a lot of traffic going in/out this weekend. we will see what happens! at this point all I can do is hope for a nice family, idealy with kids my kids ages. (and a bidding war wouldn't hurt! lol)

 

[golfgal]

Maybe a tax loss would be beneficial?

Really, unless you know all of their financial circumstances it's tough to say.

You can't take a tax loss on a primary home--only investment properties.


My guess is that they have a non-contingent offer on their dream house and don't want to lose that and carry two mortgages. It's also not a bad idea to get people into that house that may not otherwise look at it because it is in the lower price bracket. It would be a "dream" house for someone else and they may offer more than asking. It could just be a strategic move on their part. If it is really $40,000 under comps and someone comes in with a price $30K over asking, it should still appraise out and everyone wins.

 

[mtemm]

I have neighbors I know only by a quick wave hello. I don't know their names. I don't know what they do for work. I certainly don't know if they have good paying jobs or not. If they put their house up for sale, I would not know what they paid for it ( I could go to the town hall and look it up, if I were so inclined), and I would not know that they did not have a new job offer and were moving just 2 towns over.

How do you know all this from neighbors you only wave to?

we know them because they are right across the street and talked to them when they first moved in and we tried to strike up a neighborly relationship. turns out he is cousins with one of dh's close childhood friend's wife (but there is drama so they don't really talk) but they are rarely outside and both work full time, and pretty much keep to themselves so it never really developed. when she was home on maternity leave a couple of years we chatted a little more, but it was still very much an in passing kind of chat. how are you, how are the little ones, are you going back to work type of stuff.

we know how much they paid for their house because they bought it 6 mos after we bought ours, we knew how much the house was listed for, and the people their previous owners told us. not to mention I think dh also saw it listed in the paper. however, we don't know how their finances break down or what taking a $40k (on top of the hit they are already taking due to market tank) loss would mean to them. could be a drop in the bucket for them and worth it to move closer to her family (even if only by 20 minutes, which is where they are moving), or to move into their dream home, or whatever.

 

[luvmy3]

Maybe they just want to give their neighbors something to gossip about.

 

[mjkacmom]

Real estate was so hot here years ago - not a single property under $350,000, and crazy bidding wars. We now have 5 homes for sale on our little block, some for over 2 years. A friend, who lives a few blocks away, and on a much less desirable street, bought a home, and then put her home on the market far below comps, and sold within a week. There are SO many homes in town for sale now in the $300,000 - $500,000 range, and not enough buyers. These same homes would've all sold for $500,000 years ago at the height of the market.

My next door neighbor's home was assessed at 420,000 a few years ago, and she's lowered the asking price to 365,000, and it's been on the market for over 2 years.

 

[GeorgeG]

I truly believe that 5-10 years ago the housing market was grossly inflated and the deflated prices today are probably more in line of what houses are really worth. That's not what those trying to sell want to hear, but I think it's a fair observation.

 

[Frye7127]

Our home appraised for 270,500, but sold for 230,000 The market will bear what it will bear and 230,000 was our mark, unfortunately, but thankfully it will close this Friday, God willing, and we can move on with our lives - 1 1/2 years later. I wouldn't wish it on anybody.

 

[Green Tea]

Are the comps actually selling? Here the prices are pretty stable for listings, but nothing is selling. If we wanted to move, we would price the house where it would likely be sold quickly. No need to wait around 3 or 4 years hoping for an offer.

 

[golfgal]

I truly believe that 5-10 years ago the housing market was grossly inflated and the deflated prices today are probably more in line of what houses are really worth. That's not what those trying to sell want to hear, but I think it's a fair observation.

Without a doubt that is what was happening. We had some friends that about 10 years ago had this cute little 950 sq foot bungalow that they listed at $104,000-which was a fair price. Well, bidding war and they sold the house for $140,000. That same house went on the market last year, listed at $140,000, didn't sell, didn't sell. The owners were trying to get the inflated price that they paid for the house when the house was never worth that much in the first place. The house finally sold for $108,000, which was about right for that house.

In our area 10 years ago houses were selling for 30-100K+ OVER asking price. Now people are trying to make a profit off that and it just isn't happening because the house has NEVER been worth that much to start.

 

[Tigger&Belle]

Why not just ask them?

 

[mtemm]

Why not just ask them?

have to see them to ask them, and they haven't been around to ask since the sign went up a couple of days ago. we were just so surprised at the price. and honestly asking them is an invasion of their privacy, and not a question I am comfortable with since we don't know them well, so most likely I won't. its really none of my business. doesn't mean I'm not concerned about their choice, since it can/does affect my own home's value. we were tossing around ideas as to why they would choose to start so low and came here for more ideas we might not have thought of.

 

[1001 Ghosts]

It's an invasion of their privacy, in your own words, but you'll come to a message board and nonetheless invade away.

Hmmmm.....

 

[mtemm]

It's an invasion of their privacy, in your own words, but you'll come to a message board and nonetheless invade away.

Hmmmm.....

I don't consider coming anonymously to a message board, without using their names/town/address an invasion of their privacy.

 

[1001 Ghosts]

I don't consider coming anonymously to a message board, without using their names/town/address an invasion of their privacy.

Of course you don't!

 

[mtemm]

Wow.
Sometimes things are just not 'all about you'.

absolutely not! but sometimes things that are not about you do affect you. I wish them well wherever they go and whatever they do in life. at the same time, it doesn't mean I don't also want nice new neighbors and maybe a sale price that isn't quite so low. the two things are not mutually exclusive.

 

[mtemm]

Of course you don't!