Following the near collapse of Wall Street in September 2008, The Real Estate Cafe began tracking and mapping million dollar price reductions on luxury homes across Massachusetts. We were so excited that we created walking tours of “Million Dollar Markdowns” in two Boston neighborhoods — Back Bay and Beacon Hill — where buyer clients were looking for deals on luxury listings.
This year, we realized that focusing on seller-initiated MEGA price reductions caused us to miss some significant savings, like price concessions negotiated by exclusive buyer agents and price reductions that effectively occur when listings expire or are canceled. Is “timing the market” really be the most effective way to get a price reduction on a luxury home in Boston or elsewhere in MA? That’s a possibility, based on the success of past clients and our ongoing analysis of expired & canceled listings across Massachusetts during the final weeks of 2011.
During 20 day period between St. Nick’s Day and Christmas (12/6-25/11), approximately 234 residential MLS listings priced over $850,000 expired or were canceled. As noted in our previous blog posts in this series, sellers with high end homes seemed less likely to reduce their prices than less expensive listings which often expired even though they were priced well below their assessed value.
Still we were surprised by a new finding: As shown in the graph above, a stunning 60% [rounding up] of the 234 luxury listings that expired or were canceled during 20 days before Christmas 2011had never reduced their original asking price. Further, less than one in three luxury listings reduced their original asking price by 5% or more. That means that timing the market so you can approach homeowners directly after their listing expires or is canceled may be the most effective way for you to get a sizable price reduction. That’s because the seller is no longer obligated to pay real estate agents a brokerage commission. If you’ve (1) never seen the listing before at an open house, (2) had private showing, or (3) inquired about the listing by phone or email, they can reduced their last asking price by the full amount of the commission, pass the savings on to you and still net the same profit!
Why don’t Realtors blog about this money saving opportunity? Because they are more interested in relisting the unsold property than educating real estate consumers about savings opportunities. In contrast, as fee-for-service real estate agents, The Real Estate Cafe encourages DIY home buyers & homeowners, who are willing to offer their expired or canceled listing “for sale by owner,” to contact each other directly.
The opportunity to avoid paying real estate commissions can be big money. Nowhere is that more apparent than looking at what happened with expired and canceled luxury listings in Greater Boston and across Massachusetts during the 20 day period before Christmas. So, luxury home buyers, if you’d like to learn how you save at least a year of college tuition, room & board on one of these luxury listings, sign-up for a FREE 15 minute consultation.
BONUS: Be one of the first three to request a FREE consultation and we’ll email you a graph showing how much you can save on the expired listings from 20 day period analyzed. Would you believe the potential commission savings on one in four of them is over $100,000 or about the cost of two years of college tuition, room & board at an Ivy League college? Compare that to the media hype earlier this year when a Chicago-based Realtor offered coupons worth $1,000 at closingthrough Groupon!