The market has noticeably slowed down, especially in the condo market. Are there deals to be had moving forward? Yes!
Everyone always wants the best value when they are buying a home and in this market, here is the best way to purchase a home/condo at a discount to the market. Now keep in mind this is only my opinion, but moving forward, I believe you will see some clarity in what I am saying.
When something is priced right, you will most likely not get a “deal” on that home as it will most likely sell in a reasonable timeframe. Where will you get a deal? You will find your best deals in homes or condos that were originally overpriced. In the condo market this usually happens for one of two reasons. First, there are some agents who “Buy” listings. In other words, they tell the seller a higher price than the true value in order to get a listing over a competing agent. You have heard me say it before and I will say it again… this is a bad way of doing business that certain agents use and in the end, it hurts sellers. After sitting on the market with no offers and no showings, the listing agent tells the seller they need to drop the price. ( Usually down to where it should have been priced!) Usually, and unfortunately, the seller will keep that agent even though he or she told them they would sell it at the higher price.
The second reason they are overpriced is the agent is not experienced in an area or type of sale. I see it often in the condo markets where an agent just does not understand condo pricing.
Now, back to finding deals in the market! What happens often in this type of market is an overpriced home will sit on the market and go through several price reductions, often blowing right through the floor of where it should have been priced originally. A couple examples of this in the upper end of the condo market:
A unit that I like very much is a penthouse in the Pearl District that is listed at The Elizabeth at $2,950,000. A different agent had this listed previously at $3,650,000, a number I thought was way high! ( and I know this because I sold another penthouse in the building a year earlier for $2,350,000.) My original thought was what could I sell my previous listing for if I put it back on the market. I was thinking $2,700,000 to $2,900,000. Mine was slightly bigger and all on one level, a positive in my book! This is about where I thought the other unit should have come on the market. I believe that if it would have come on the market at the correct pricing, it would probably have sold by now. Now, after months on the market, and multiple price reductions, it will start to get some lower offers… again, this is where you can get some deals in this market! If I am representing a buyer on this property, I truly believe they will now be able to get the property for well under what should have been the true value at around $2,900,000. The best part is you can find these deals in all price ranges, not just the upper end of the market. A buyer with some patience, and that keeps his or her eye on overpriced units will be rewarded in the end. Overpriced units will go through several price reductions and sell for less than they should have!
Oh, I said a couple examples above didn’t I? If you are a penthouse buyer l looking for a deal… here is one I have talked about before, several times actually.
If you read my last blog post, you may recall me talking about a penthouse at The Strand that had reduced it’s price to $2,995,000. In my post, I mentioned they would probably start seeing the sharks circling and offer $2.6. Well since that posting, the listing has been reduced once again, this time down to $2,699,900. Now don’t get me wrong, this is a nice penthouse unit with some really nice views but it is at a point where someone is going to get a good deal on this beautiful penthouse! Had this penthouse been priced even close to reality when it was originally listed, it would have sold at a much higher price ( remember, the market was much stronger a year and a half ago)
No matter what your price point is, remember, there are condos out there that are overpriced! Keep an eye on these units and when the time is right…go in and make a low offer and you just might get a great deal!
For those of you who already own a condo and are thinking about selling…please use this as an education to the negative effects of overpricing!
Brad Golik is a condo specialist with Total Property Resources and LuxuryCondosofPortland.com you can reach him at 503-896-8856 or at email@example.com
Yesterday morning I was at a coffee shop reviewing new condo listings that just came on the market. I noticed that the lady next to me was looking at my laptop watching what I was doing. After not too long, she asked me if I was a real estate agent. I said that I was…and then she unloaded with a recent experience she had had in buying a condo. The woman, whom I will call Jan, told me she had such a frustrating experience with the agent she had used. To make matters even worse, this agent also happened to be an agent that was referred to her by a friend of hers. As I dug a little deeper to how this agent was referred, it turns out the friend referred her because she was a very nice person! Now I have been in this business for almost 15 years and the one thing I can say is there are MANY nice people in the business. But, I can also say that many of these same people are not agents that I would hire knowing what I know! Jan told me that it was very frustrating during the searching period because this agent knew very little about the condominium market. She said she spent so much time walking around buildings looking for lockboxes…and this was her first clue that she did not deal with condominiums very often. The second thing that she said was frustrating was that whenever she asked her about the pricing of a condo they looked at, the standard answer was “It seems fairly priced!”
This is a very typical situation that I see all of the time in the Pearl District, South Waterfront and Downtown. Many buyers may get referred to an agent that a friend suggest…maybe an agent they had used or heard about out in the suburbs. The condo market is very different than dealing with homes out in Lake Oswego or Tigard. I have often written on the importance of working with a specialist. If I were selling a home in Lake Oswego, you can bet that I would want to use an agent that sells there often and knows the pricing and other aspects of selling in that area or at the very least, someone that is VERY good with marketing! Same goes with condos and lofts. I have often said to sellers that a typical agent cannot just flip on a switch and be great at marketing to condo buyers when 99.5% of their time they are marketing to buyers of suburban homes…in several different areas!
One of the reasons you hire an agent is for their expertise and knowledge, or at least it should be! An agent can be nice, but they also need to know what they are doing. Being nice is fine but when it comes to negotiating, that agent needs to be tough and always put their clients best interest first and not “cave” with another agent that is tougher with negotiating! When the time comes for a person to sell their condo, a condo specialist is even more important! Having an agent that is constantly marketing to condo buyers is important. Hiring an agent that spends most of their time marketing to buyers looking in Tigard, Gresham or Wilsonville may not be the best way to go…even if that agent is a very nice person!
Jan said the last straw was when she got to closing she was surprised that she had to pay a Move-in/Move-Out fee that was close to $400 and also was shocked to find out she had to pay a 1 time capital contribution fee equal to 2 months HOA fees… 2 things her agent never mentioned because she did not know about. (this is disclosed in the HOA documents) I felt bad for Jan but it is something I see all of the time.
Every week as I look at new listings, as I was doing in the coffee shop, I am amazed at the number of new listings that come on the market that are listed by agents that don’t deal with condominiums. The one thing that always amazes me is I never get a postcard or an email about their condo listing! As a condo specialist, I make sure that every agent that deals with condos and lofts gets a video about my new condo listing. Why? Because I know that the other agents that deal with condos often have their pipelines filled with CONDO buyers!
I enjoyed my conversation with Jan and in the process met a new friend over a cup of coffee! In time, hopefully Jan will refer me to a friend. But hopefully, it will not be because I am nice. Hopefully it will be because I am nice…with knowledge!
Brad Golik is a condominium specialist with http://www.LuxuryCondosofPortland.com and Total Property Resources in the Pearl District. You can reach Brad at 503-896-8856
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Because I was short of time this week, I thought I would do a video post!