Over the Top! Offers Above Asking Abound in the Hub
Wednesday, March 20, 2013, by Tom Acitelli
Steve
Carell enters a pawn shop and sees a World War II diver's knife he likes. Told
the price is $2,500, the comedian responds, "You know what, it seems a little
low." He pauses and says, "I will give you $4,000." [Laughter ensues].
A similar scene repeats itself several times
a week in the Greater Boston condominium market, but it's not nearly as funny.
Sellers and their agents communicate the price of a condo to buyers, and the
market's response is, "You know what, it seems a little low." A short
time later, multiple offers show up, and, before you know it, the condo sells
for more than the asking price.
It wasn't always that way.
My analysis of MLS reports show that, in the first few months of 2011, Boston
condos sold on average at 96 percent of the asking price. In fact, some condos
even started a little high and had to adjust their prices down. So, although
the accepted offer was 96 percent of the listing price, it represented only 92
percent of the original listing price.
The beginning of 2012 was a stronger market
than 2011, and Boston condo sellers took offers that on average were 97 percent
of the asking price, and 94 percent of the original asking price.
In
today's condo market, however, negotiating room seems about as necessary as the
coal room. According to a recent breakdown I did on MLS, Boston condo buyers on
average are paying 99 percent of the asking price and 98 percent of
the original ask. As well, condo sellers are, at an unprecedented rate,
accepting over-ask offers.
Over a two-month stretch in Brookline in
2013, the Greater Boston condo market where over-ask offers are most common,
more than 50 percent of the sold condos had sales prices that were greater than
their listing price. In fact, nearly 40 percent of the sales prices were at
least $10K over the asking price and nearly 30 percent were at least $15K over
the ask. A few went even higher. Three Upland Road, #3, was $30K over ask, and
the buyers of 652 Washington Street, #5, paid $36K more than the listing price.
Brookline
may be the most prolific market for over-ask offers, but it was by no means the
only place where sales prices were on occasion significantly above asking
prices. In Somerville, 400 Washington Street, PH1, took an offer nearly $40K
over the list price. And, in Cambridge, 37 Linnaean Street, #2, took an offer
that was more than $100,000 over the asking. Incredible! The South End closed
the condo with the highest above-ask in Boston so far this year: 61 Chandler
Street, #2. It went for $126,000 more than the asking price. Asked why
the home sold so much over the asking price, Richard Egan, the buyer's agent on
the deal, said that at $760 a square foot the property was
"underpriced."
If you
don't want to be in a bidding war this spring, you might have to raise
the white flag for buying many of Boston's most sought-after condo. If,
however, you don't mind the competition, just act like Steve Carell, and
whatever the asking price is—even if it seems absolutely ridiculous—casually
respond, "It seems a little low, I will give you …" and suggest a
higher price. LOL.
[Curbed Boston]
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