Coldwell Banker holds a ten-day sale

Silliest thing ever. Why would I go to a 10% off sale when I can wait for the 30% off sale?

I can't imagine Mass. sellers going for this. They think anything that doesn't leave them with a 100% profit is just "giving it away." Plus, good luck to anybody who does cut their price trying to raise it again after 10 days.

With credit markets seized, home sellers will be wishing that they only have to cut their price 10% to lure buyers. Tough to find buyers for overinflated homes when people can't secure loans.

Got deflation?

saw that, I assumed its a gimmick - ie they took all the price cuts that were going to happen in any case, and held them till now for marketing.

I'd be interested to hear if it works.

Makes sense.... best way to get people to buy is to get them "shopping". Especially with couples, when one of them gets into the emotional mood to get a new house, it is like putting a train on rails. Smart move by marketing wise. For those calling it silly, you just don't know about how and why people bu homes: they do silly things everyday.

So Caldwell Banker isn't offering the sale: they are trying to convince their buyers to offer a sale.

Now if Caldwell Banker had a ten percent off sale, I would assume that would mean that listing agents give their sellers ten percent off of their expected commission, and selling agents would rebate ten percent of their commission back to their buyers.

Now that would be a sale!

Prices are still inflated considering that the remaining buyers are looking for a home priced under 300k. Sadly the majority of homes in this price range have been considered starter homes for sometime now. Consequently they are not in good condition .Since the owner's were short-timers, they did not invest the recommended 1% of the house's value (3k a year in this case) to keep the home well-maintainted and did nothing to improve the home value. Most homes in this range need several expensive updates - new roofs, windows, heating systems, etc which mean you get to take on 30 yrs of upkeep and are really buying a house priced at 350k -which is just too pricey

I'm an agent in the Hartford, CT area. Coldwell Banker has run this promo here a few times. Some sellers participate, others do not.

For the sellers that do participate and their houses don't sell, you typically do not see the house price go back up. It's not really a "sale," but something of a way to get a price reduction.

If I'm representing the buyer and the price is lowered 10% and then raised up again, the logic just isn't there that the seller won't accept 10% off the price. If they were willing to accept 10% off a few weeks ago, they should be willing to accept 10% off now. The seller cares about their net proceeds. If they publically signaled they'd be willing to take 10% less, it opens the door. Buyers don't fall for the 10 day "sale."

I am on the fence but 10% wouldn't do the trick. 20-25% would.

One of my sellers wanted to do this a few months back. We tried it. It doesn' t work. If a seller reduces the price and raises it back up again, the message to the buyers is that we are all "playing games".
If the seller reduces the price and leaves it there, there's a much better chance of selling it.

Things are not going well for Coldwell Banker.This appears to be a clearance sale prior to going out of business..

Yes, another gimmick -- but unfortunately, houses are not steak knives. As noted above, buyers actually know the prices will not go back up on the 11th day. Thus yet again, instead of pricing a property correctly or aggressively (or terminating contracts with uncooperative sellers), too many agents seem bent on employing the cutesy little tricks discussed here before, e.g. misleading square footage and bedroom counts, bribes to buyers' agents and over-staging. Speaking as a buyer and a prior seller -- these tactics are transparent, insulting and a root cause for our growing contempt of the field.

The only thing coldwell banker is known for is inflating the square footage of the homes they have listed, along with sale prices.

For example-MLS# 70713976.

This home has been for sale for a LONG time (232 days). Please add up the room dimensions and see for yourself. It's been under agreement 2x, and both times the deal has fallen through- I wonder why?? Could it be that the lenders are saying that the loan to value ratio is a little screwed up? Consequently, the realtor of this property will not admit that the square footage is grossly inflated, and the seller's will not come down on their price to a reasonable dollar amount for the size of the home....they will have to hope that someone has cash to pay in order to get ripped off by this Coldwell Banker, because I can't imagine a lender giving someone that amount of money for such a truly small home. The starting price was $540k- in Bolton!?
I could fit this home inside of mine, and mine is listed at 2700 sq. ft.

Check out their other listings in the area- gross and overpriced, and stagnant. Coldwell Banker needs to realize that they ain't in the driver's seat anymore, and they're doing the client's a great disservice.
Cheers!

Katt,
Public tax and deed record on MLS do list it at 2698 sq ft. What you are probably not accounting for is hallways and entryways. Those alone can be a few hundred square feet. It has also only been on the market for 180 days (this does not include the time it was off market and under agreement) and it has only been under agreement once (all according to MLS). I am a RE agent but not a Coldwell agent, you should check the facts before you slander/libel a business. I am not a huge fan of realtor mills like CB or C21 but I also dislike it when people spread misinformation.

on the amusing and misleading front, there is a place in Cambridge on Sherman that is listed as being in Harvard square. By that definition, just about all of Cambridge is in Harvard Square.

There's a fine line between misleading and just plain lying.

Of course the opening line is "Location, Location, Location" - a sure sign of a real estate agent who is trying to mislead!

I must say, per an earlier Rona post, that there seems to have been noticeably more activity of late, and many things are going under agreement. Human stupidity is just awe inspiring sometimes. It'll be interesting to see how many of these actually get funded....

Like, OMG - you mean I can now buy that (small, dingy, next-house-on-top-of-it, next to railroad tracks, starter home in need of repairs and an honest owner) house you were hawking for $399,000 for $359,000?!

Wow, thanks - but it's still overpriced, esp. if you're a single-income household, or two income, but paying for daycare/preschool/educational loans, 2 cars & commuting, etc...

I agree with some of the posts that buyers are sophisticated enough not to fall for a sales "gimmick" like 10% off. It's been my experience with traditional brokerage that listing agents like to under-estimate the sale price by around 10% to move property while sellers want to maximize their profit and will often try to inflate their listed sale price by the same amount. This could just be a way for Coldwell Banker to get their clients' listings more in line with what they want them to be. I would also hope that we wouldn't see them go back up again after 10 days...that would just be more silliness!

mhios@territoryre.com
territoryre.com

If a particular property is reduced by 5 to 10%, and it is a home that I am interested, there is no question that I will go see it. As will the majority of buyers who have the same criteria. With the new conforming loan limit expiring at the end of the 2008 (as part of the housing stimulus bill), many people are looking to make a purchase before year end, so at minimum it may help to move the purchase along more quickly. At the end of the day, a seller determines the asking price, but a buyer still determines the selling price.

Congratulations to Coldwell Banker for taking the initiative on a much-needed and great idea. The main problem with the economy is the stagnant housing market. The problem with the housing market is the large glut of overpriced listings on the market. If all sellers would reduce their prices, houses would start to sell again, supply and demand fundamentals would kick in, and the economy would start to turn positive again. Sellers simply can not get the price for their house that they could have gotten in 2005. Kudos to all sellers who are reducing their asking price for this sale.

David Shortsleeve
Director
Worcester Association of Realtors

.

Let's keep it honest-
I've been in the house- it's not the correct sq footage. Trust me on this one.

Enjoy

Yeah, it's real noble of Coldwell Banker to offer a discount on the *seller's* proceeds. As Mary pointed out above, they're certainly not offering to take a discount on their commission. I think this is a ridiculous idea. If a buyer saw a house on the market that they liked but thought it was priced 10% too high, wouldn't they just put in an offer for what they think is a fair asking price? This isn't going to give buyers any incentive to go shop. It's just a way for the agents to maybe get their commissions a little faster... at the seller's expense.

Also Let's keep it honest.
It is on my ziprealty website for 232 days. I saw it go under agreement once, fall through, spoke with the realtor, she said some excuse about it, it got put back on, it got put under agreement again and has since been taken off agreement, I could really care less about what you say, I'm only stating what I've personally watched, since this house was one I was looking at for a while, because the RE agent was less than cordial when we visited it a few times in the spring. It was listed on 2/18/08. It has one catwalk upstairs, and the closets are quite small, so if you count "air" as in a high ceiling, more power to you, I dont think bank appraisers do. The bedrooms are all TINY- you can't even fit a queen size bed and a dresser in any of them. My home is listed for 2600 square feet, and I am just telling you point blank, that this home could fit inside of mine with no problems.

I too don't like it when people spread misinformation, so I must admit, you sound just like a RE...I suggest you view the property for yourself if you think I'm wrong. I have shown the home to about 15 people in the business, both lawyers and RE friends- they agree it's wrong, but there's not much anyone can do since as you say, "it's in the deed and tax records" as if human error never occurs. Right.
If you'd like I'd be glad to send you the blueprint for the home, where you can also see that a room was removed from the home but the sq footage for that wasn't adjusted-. but even WITH that room, the sq. feet doesn't add up to even close the listed amount. So before you start using the l word- you should go check out the house- which more often than not is better than checking the 'facts'

This isn't a new idea. And it probably wouldn't be a bad one if the perception out there wasn't that things will be getting worse - forcing an even deeper cut in prices than 10%.

I'm one of those potential buyers sitting on the sidelines. I have a substantial down payment in a cd and a credit rating in the 800's. Another factor beyond tightening credit, etc is that so many homes in this area are heated by oil. And we know that expense is not going to decrease.

It's going to take a heck of a lot more than a 10% drop.

Katt,

For listing # 70713976, the Public Record has the square footage at 2689. It was only under agreement once. It was red flagged "active" status because it got an offer, twice. Accepting an offer is not the same as under agreement.

Why the agreement didn't work out could be for many reasons.

It all depends on the current situation of a seller. If they bought the house two-three years ago they simply can't afford to drop the price lower then where they typically currently have it. Sellers that were responsible in their loans and can still afford to pay their month to month but can't afford to drop prices another 10 percent or as noted above by more to become more in line with the market. How many 30 year old 1st time sellers do you know that can bring a 30-40k check to closing to pay for the difference? I think the general public that is looking to get into the market thinks seller's are being unrealistic, which in today's market is probably true but do they have an alternative way out. The answer is no unless they default and ruin their credit and become part of the real problem which starts and ends in the financial-mortgage industry. Good for CB if it works or gets some seller's that can drop 10% to do so. Fix the Mortgage Industry and the RE will follow.

Thank you Sally-
Again, I encourage you to go view the home- it is NOT 2689 square feet. There is no possible way, unless you count imaginary rooms, and count imaginary floors.
Yes, it may say 2689 in public records, but given the strange shape of the home, it's easy to say taking the outside measurements of the home gives you 2689- but I wouldn't consider a garage living space, as it's not heated, and rooms that are no longer there and a porch that's not heated should not count. Unfortunately only about 1500 is usable, as the rest is imagined usable living space. Again, let me be clear. IT IS SMALL. It's not only small, it's tight.

I'd be curious to know what realtors on this blog consider the correct way to measure square feet- is it usable, or is it simply the outside of a house, or is it whatever way gives you the advantage. I know that in speaking to a few housing professionals, both realtors, as well as mortgage professionals, that this house is unfortunately one of those that is going to be "troublesome" to put it gently, unless a buyer has A LOT of cash.

If the RE's on this board want to argue that since it says it's 2689 sq ft, than it is- that's great. Give me another reason for why it's just sitting there then, because it's actually a very nice house- it's just inflated in both price and size-. Square footage should be measured the same way for every home, not simply measuring the exterior for some, and room dimensions for another. Again, I repeat, my home is pretty much the same "listed" square footage, yet my room dimensions add up to that amount, and this particular home is puny in comparison to mine. I feel as if this is something of great importance to potential buyer's because it can be a real headache- paying for imaginary square footage and then having some trouble turning around and selling it without losing your shirt.

Most people seem to agree that thehousing market has not hit bottom yet. Does anybody have an idea what prices will do in our area in the coming months? I think 12-15% drop is coming due to the economy, unemployment and stricter lending standards.

I have seen other posters say the same thing about the exact house Katt is posting about. I haven't been in the house but just looking at the pictures, price, and the DOM it did not peek my interest. I just wonder how people can stand to be on the market that long.

Greetings all...

I think that you all need to keep in mind that something must be done to stimulate the housing market. Is a 10% reduction going to bring sales on all the listings that are participating? No, of course not . However, getting Buyers out looking at houses is sowing seeds for the future. I don't think there is anyone out there who would disagree that we need to do something to draw them out.

The fact that the price cut just affects the seller, not the agent, tells a lot about what has gotten us into this mess to begin with. What happens when the sale is over and no buyer bites? I like the concept though with a little tweaking...how about the seller cuts the agent out and drops the price by 6%, and then coming down 4%.

Liz - actually, the agent’s commission is based on the sales price...so if the house sells for less, it does affect the agent. Real Estate agents offer a service - you don't have you doctor cut their costs because your impending surgery is going to cost you more than you originally thought. Obviously Coldwell Banker's intentions were to encourage sellers to reduce their prices with a positive spin. No one wants to make less money, but it's the harsh reality that both sellers AND agents have had to face.