When writing in a blog, it is sometimes difficult because you put yourself out there to occasionally be wrong. When I get feedback from readers it is often appreciated. It is not always positive, but that is ok! After my post the other day about the $2,975,000 unit that I felt was actually under priced, I got an anonymous email from someone that wanted to call me out on a comment a made a short time ago about a unit right down the block I thought was overpriced. That particular unit was another one of the iconic townhomes on 11th that was priced at $1,899,000. That unit was recently sold for $1,850,000…a number I still think was too high. Remember, this townhome had a neighbor that sold about a year ago (with virtually the same high end finishes) for $1,390,000. Do you really believe the market is up 33% in that time span? It’s not! But let’s take a closer look.
The listing agent did get a good price for the seller but this opens up a whole different issue because the agent also represented the buyer. While it could be said that he got the sellers a good price for their unit, the buyers, who he was also representing, overpaid! I am not a big fan of agents representing both sides in a transaction. Have I done them before? Yes, but it is with full and absolute disclosure. Do you think this agent told the new buyers it was overpriced? Now the market value is what someone is willing to pay. I agree with that but, buyers come to us for guidance and our experience and knowledge in pricing. You cannot be telling one party it is a great selling price and then at the same time be telling the buyers it is a good purchase price. As an agent, my duty to the seller is to get them the very best price that I can. In doing so, I will not put my integrity at risk just to get both sides of a transaction. This is where a good agent must step away from both sides of a transaction and focus on his or her duty of getting the best price for the seller. To be fair to the other agent, maybe this agent did disclose to the buyer that they were overpaying for the unit and they were ok with it. Do I believe that the agent said to the buyers “This unit is priced over 33% from it best comp that sold a year ago and the market is certainly not up 33%”. I doubt it seriously.
I do not have a problem with an agent handling both sides of a transaction when something is reasonably priced and full disclosure has been made. When something is selling at 33% over its best comp…that is a whole different story.
As a buyers agent, I would not have advised my clients to pay over $1,750,000 for this unit( still over 26% from comp). If the buyers loved it and were ok overpaying for it, this is ok as it is their choice. But if they are receiving guidance from an agent whose main responsibility is to maximize the sales price for the seller…? I wonder what that same agent would have thought it was worth working as a buyers agent only for someone? Unfortunately, it is sales like this that will mislead inexperienced agents into false pricing. The next thing you know is we will see some agent trying to price one of these single units for $2,000,000!
As for the person that wanted to call me out for being wrong, that is ok! It is people like you that keep me on top of my game so I actually appreciate you and thank you for your comments. I will not always be right but you will always get my honest opinion. Also keep in mind though, it is always good to have a good understanding of the whole picture before making comments, and this is something I always work towards. So in closing, yes, I still think 617 was in fact, overpriced!