To start with, understand that the first part of 2010 was pretty good from a real estate standpoint, especially with the home-buyers tax incentives that ended in April. After that, showings and sales went very, very quiet.
Last March I was speaking with a neighbor who was going to put their home on the market. They told me that they had paid $200,000 for it a few years ago, and since then they had installed a fence in the back yard and upgraded the screen porch (the house really does look nice). I explained that, in this market, they would be very lucky to get $200,000 for it. Of course, that didn't appear to be what they wanted to hear, as they listed the house with a different agent - for $215,000. Folks, there was NO WAY that the house would have appraised for that, and therefore a bank wouldn't lend money for the house. But again, that's not what the sellers wanted to hear. (Since I own a home in the neighborhood, I was secretly hoping it WOULD sell for that, because that would add a significant of value to my house - but I knew it was just wishful thinking, hehehehehe).
Anyway, a few months went by, and they lowered the price to $205,000. This was still high, but I guess they figured that they could attract more buyers. Well, after 5 months, the house went under contract, and it closed today (about 5 weeks after going under contract) for $196,500.
Remember I told them that they would be lucky to get $200,000, and they didn't even get that. But, to make things worse, they had to make 6 months of mortgage payments, so they really "netted" even less on the house! You have to wonder what would have happened if they had listed the house at the RIGHT PRICE from the start. Think it would have made a difference? I do!
See what I mean when I say "Greed Kills"??
Stay tuned for Part 2 - it should be posted in the next few days...
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