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Sunday, March 14, 2010

Blast from the Past, or, the "Hail Mary" Call

Turning Up the Heat on a (Very) Cold Trail

Once every month or so, I get a voicemail like the one I got today:
"Hi, this is Bob Smith at Smith Realty. I don't know if you remember or not, but you showed my client's home at 123 Elm Street in December(!), when it was $179,900. I don't know if your client is still looking or not, but we just dropped the price today."

While I always admire a hardworking, proactive agent, such calls -- especially at that price point -- are almost always a waste of time.

For one thing, if my client has serious, continuing interest in a listing, the other agent will know well before three-plus months have elapsed.

For another, I've probably shown or previewed several hundred homes since December. Jogging my memory on a December showing is like asking me what I had for lunch last July 17.

Sitting -- For a Reason (or Several)

But perhaps most importantly, three months of market time for a listing under $200k is an eternity -- for both Buyers and Sellers.

While the market for upper bracket homes is sluggish (to say the least), well-priced, well-marketed entry-level homes have been selling briskly, typically in less than 90 days.

That's due both to who's buying them -- first-time Buyers who by definition don't first have to sell -- but also because of the tax incentives available ($8,000 for first-time Buyers, $6,500 for move-up Buyers).

Those numbers loom much larger for homes under $200k than for $600k or $1 million homes.

So, bottom line, the only reason an entry-level home would be sitting in today's market is because of condition, price -- or both.

Which undoubtedly is what my client thought way back in December (I honestly don't recall the home; they subsequently bought something else shortly thereafter).

Oh, and the new price that the listing agent wanted me to know about?

A dramatic drop down to . . . $175,000.

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