March 26, 2004
School Break
The private schools in town are on vacation and but not the real estate market. About fifty new houses came on last week, ranging from $16,900,000 (twenty acres at 500 Round Hill Road) on down. Nothing of note, to me, but I may have missed some. Thirty-seven houses went to contract, many in bidding wars mere days after being listed. 32 Vineyard Lane ($9,250,000); Round Hill Partner’s listing at 92 Husted Lane ($6,350,000); 17 Khakum Wood ($4,395,000); 2 Palmer Terrace, in Riverside (mentioned in this column, bidding war, asking price $1,395,000); and 11 Plow Lane (bidding war, asking $1,295,000) are all representative of what’s happening: houses are selling.
In-Town
Houses close to town continue to sell. Mary Crist listed 7 Sheldrake Road this past Monday for $1,169,000 and had an accepted offer and several backups within hours. There is a very large demand for houses within walking distance of the Avenue, and very little supply. That’s a nice place to be, if you are a seller.
What a Broker’s Worth
A few months ago a property owner approached me and said that he wanted to sell his house for $1,250,000 net —“but I don’t want to pay a commission”. I reasoned with the gentleman, pointing out that, in order to be listed with the Greenwich Multi-list system, he would have to pay a commission, but that he could almost certainly net $1.250. The owner was adamant: no commission from his pocket. So I looked around, found a buyer who would pay the owner his price and me a full commission of five per cent. I reported this to the seller but again urged him to place the property on the multi-list. Perhaps because my advice was against my own interest—I would make four times as much on a direct sale than I would splitting the commission with another firm—the seller agreed to at least “think about it”.
When he reappeared a month later he had decided to multi-list it. I advised him that the market had gone up during his absence and recommended that we price it at $1.350 and hope for a bidding war. We signed a listing contract to take effect in two days. A fellow named Finlay, one of those William Pitt chain store Realtors ( I say this without in any way disparaging a number of agents at that firm: Steve Archino, Peter Janis and Joanne Gorka, for example) discovered that there was a two day window and presented a direct offer to my client: $1.450, with his buyer paying him a commission. I would get nothing. My client called to tell me that he was going to accept the offer. Acting purely from my own desire to get paid, I urged him to let me go ahead with the listing but at a price of $1,550,500. We would exclude Finlay’s client but, if we received a sufficiently higher offer (it would require a bid of $1,525,000 to match Finlay’s no commission bid) we’d go with that.
I didn’t really expect to, but within twelve hours we received a full price offer. My client did not accept this but instead, told Finlay of the offer and Finlay promptly offered to match it. Good for my client, bad for me. Other would-be buyers appeared and today the seller’s attorney conducted a sealed-bid auction. Finlay won. All of which is not necessarily to whine about the unfairness of the world (although I have an opinion on the subject) but rather to point out the value of fully exposing one’s house to the market. This seller would have been pleased to receive $1,250,000 for his property. Had he taken that first, private offer, I would certainly have been better off but at great expense to the owner. The owner will now receive at least $300,000 more than that and, possibly, quite a bit more. A five percent commission on a sale of $1,600,000, just to pick a number, is $80,000.00. That sounds like a lot; compared to the extra value generated from exposing your property to the full Greenwich real estate community, it’s a bargain. And of course, because my client decided that it “would be unfair” to pay me any portion of the extra value he received, this entire exercise was a real bargain for the seller, indeed. The other moral of this story, I suppose, is when money hits the floor and starts rolling, stand back.
The private schools in town are on vacation and but not the real estate market. About fifty new houses came on last week, ranging from $16,900,000 (twenty acres at 500 Round Hill Road) on down. Nothing of note, to me, but I may have missed some. Thirty-seven houses went to contract, many in bidding wars mere days after being listed. 32 Vineyard Lane ($9,250,000); Round Hill Partner’s listing at 92 Husted Lane ($6,350,000); 17 Khakum Wood ($4,395,000); 2 Palmer Terrace, in Riverside (mentioned in this column, bidding war, asking price $1,395,000); and 11 Plow Lane (bidding war, asking $1,295,000) are all representative of what’s happening: houses are selling.
In-Town
Houses close to town continue to sell. Mary Crist listed 7 Sheldrake Road this past Monday for $1,169,000 and had an accepted offer and several backups within hours. There is a very large demand for houses within walking distance of the Avenue, and very little supply. That’s a nice place to be, if you are a seller.
What a Broker’s Worth
A few months ago a property owner approached me and said that he wanted to sell his house for $1,250,000 net —“but I don’t want to pay a commission”. I reasoned with the gentleman, pointing out that, in order to be listed with the Greenwich Multi-list system, he would have to pay a commission, but that he could almost certainly net $1.250. The owner was adamant: no commission from his pocket. So I looked around, found a buyer who would pay the owner his price and me a full commission of five per cent. I reported this to the seller but again urged him to place the property on the multi-list. Perhaps because my advice was against my own interest—I would make four times as much on a direct sale than I would splitting the commission with another firm—the seller agreed to at least “think about it”.
When he reappeared a month later he had decided to multi-list it. I advised him that the market had gone up during his absence and recommended that we price it at $1.350 and hope for a bidding war. We signed a listing contract to take effect in two days. A fellow named Finlay, one of those William Pitt chain store Realtors ( I say this without in any way disparaging a number of agents at that firm: Steve Archino, Peter Janis and Joanne Gorka, for example) discovered that there was a two day window and presented a direct offer to my client: $1.450, with his buyer paying him a commission. I would get nothing. My client called to tell me that he was going to accept the offer. Acting purely from my own desire to get paid, I urged him to let me go ahead with the listing but at a price of $1,550,500. We would exclude Finlay’s client but, if we received a sufficiently higher offer (it would require a bid of $1,525,000 to match Finlay’s no commission bid) we’d go with that.
I didn’t really expect to, but within twelve hours we received a full price offer. My client did not accept this but instead, told Finlay of the offer and Finlay promptly offered to match it. Good for my client, bad for me. Other would-be buyers appeared and today the seller’s attorney conducted a sealed-bid auction. Finlay won. All of which is not necessarily to whine about the unfairness of the world (although I have an opinion on the subject) but rather to point out the value of fully exposing one’s house to the market. This seller would have been pleased to receive $1,250,000 for his property. Had he taken that first, private offer, I would certainly have been better off but at great expense to the owner. The owner will now receive at least $300,000 more than that and, possibly, quite a bit more. A five percent commission on a sale of $1,600,000, just to pick a number, is $80,000.00. That sounds like a lot; compared to the extra value generated from exposing your property to the full Greenwich real estate community, it’s a bargain. And of course, because my client decided that it “would be unfair” to pay me any portion of the extra value he received, this entire exercise was a real bargain for the seller, indeed. The other moral of this story, I suppose, is when money hits the floor and starts rolling, stand back.
posted by Chris Fountain at 8:54 AM
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