Quote:
Originally Posted by The Big Chill
It was listed a bit low. It was a 1750 square foot house in the SE. listed at 500, sold for 600. We thought 550 was the market price, but that got blown away. The house was also 20 years old and had no updates done. It was really well lived in, to put it nicely. When we looked at it we thought there would be damn near a hundred thousand bucks of renos needed.
Today we are seeing 1300 square foot houses listed almost at 500.
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Your story makes complete sense. If it's really worth $550,000, they priced it cheap to incent a bidding war. There might have been multiple offers in that situation and a few of them are people who think they might get a deal and offer below $550,000 but over list and never had any real hope of buying at their offer price. If priced fairly at $550,000 they might have never even looked at the property in the first place. This put pressure on the more serious bidders who are caught in a psychological dilemma because they want to 'win' the house and then bid at the top end of their affordability. End of the day realtor squeezes a ~10% premium due to the supply/ demand dynamics.
The interesting thing is what happens from here. Now potential sellers of comparable houses in that area are going to list or expect to get $600k.