Stigma? Over Exposure? Whats going on here?

[JoeGermade]

I did an appraisal today on a waterfront property in the Hamptons section of LongIsland.

The home is close to 5,000/SF built in 2004 with all the amenities gunite pool, Wolf Appliances, and a boat dock. They didn’t spare a dollar building this house. It was a subdivision of a larger lot and now there is 4 or 5 home all built around the same time. Only 3 of the homes have water frontage.

I look at the comps last night and my purchase price is $500,000 - $700,000 below similar water front properties. I have more recent non water front properties that have sold higher in the last few months.

My subject has been on the market since 8/2005 almost 3 years. I spoke with the realtor who fills me in on some details. The owner put the house on the market for $3.75 and than became very ill. This was a primary residence and not a vacation home and the ill owner was home in a hospital bed. She said realtors didn’t really want to take there buyers into that situation. The owner passed away around 9/07 and after many price reductions the home is currently listed for $2,799,000.

I was just doing some research on the property and I find out that not only did the owner develop this small subdivision. He owned one of the biggest real estate offices in the area with 30 agents. The realtor told me nothing about this. He was her former broker.

Could it have been possible realtors were intimidated to show this home?

Please share your opinions.....

 

[Rufus]

First off, tell it like it is. Say something like "Here is what similar propeties have sold for around this lake. Although several miles away these two (or however many) properites have sold for a commensurate amount around a lake showing similar values. Ect...

 

[Mztk1]

The Heartland speaks! That's one big lake there in the Hamptons. Some call it a pond.

I suppose it could be intimidation, but the stigma is more likely. The fact that every agent who shows the house knew, or heard of, the owner and that he died there doesn't help. If it was just someone else who happened to have money, it might not be such a big deal, but that he is well known in the local real estate community means those commissioned to sell are the ones most affected by the stigma and pass that infection on to prospective buyers.

The other thing too, and I know you say the owner spared no expense, but it is my experience with agents that they know the superficial things to put into a house to make it sell to the typical buyer. The right appliances like you said is one of them. But they usually go for cutting corners here and there, which probably would be easy to see if you walked through 3 or four of these houses in one day hoping to choose one to buy, but otherwise, if you just go through this one, you might not notice the detail it lacks. Look at interior MLS photos of other sales (if available) very carefully.

 

[Marcia Langley]

I'm not really getting the stigma due to illness part. If it's a good house, most buyers would think it was a desperation/duress sale and try to see an opportunity to use it as leverage.

I'd say there is either something wrong with the property or the guy and his family were just really hard to get along with. Maybe the agents in his brokerage were all afraid of him.

There's not an over supply up there, yet, is there? Maybe the buyer pool is starting to shrink.

I read an article this week that said wealthy families were feeling the pinch ($4M bonus instead of $8M bonus, LOL) and starting to cut back.

 

[JoeGermade]

Its not the fact that the buyers didnt want it. It was possibly not made an option to a potential buyer.

Over supply, of houses not really this type. Most of the similar houses are just way over priced and wont sell. The marketing time is longer than the lower end homes and I think this is also affected by a seasonal market. It is June now and people with fat pockets werent visiting their friends in the Hamptons over the winter. Most of the transactions are cash.

The house across the street sold last year, non water front similar size and same buildier for $3.1+.

 

[Deleted member 77547]

maybe you can contact other Realtors and ask if they know any backstories.

 

[The Warrior Monk]

That sounds like Mr. O's. If so, he passed away about two years ago. I think there would be an issue if he was hospitalized and in his home, but I don't think that would be an issue if he weren't there.

It is possible the estate has to dispose of assets, since they owned plenty of property.

I would to see what competitive properties are being listed for.

 

[Charles Knutson]

Is it under contract now? Is the appraisal for a purchase, or something else?

High end properties have their own set of issues -- most notable is the small pool of buyers. Since this property has had a long market exposure, it could be that most potential buyers saw it (or heard about it) while the owner was ill, and passed on it. So yes, there could be a stigma -- but it's not something that should carry over into the future.

The small pool of potential buyers is a key factor with high end properties. A high end home can be on the market for 2 years at $1m with no offers, and then sell in one day for $1.2m after being withdrawn for a short period of time. It only takes one buyer, and when there are only 3 or 4 comps at the best of times, any given property can be a tough or easy sale.

This home could sell for $2.7m now, and become a $3.5m flip after some cosmetic updating. You just never know with high end homes -- and all it takes is one buyer.

 

[J Grant]

what difference does it make? if it sold low and it is worth more, than appraise it higher than the sales price.

 

[Mike Boyd]

This home could sell for $2.7m now, and become a $3.5m flip after some cosmetic updating. You just never know with high end homes -- and all it takes is one buyer.[/QUOTE]

I was going to mention cosmetic updating, also. Out with the old, in with the new. Hopefully, the survivors do not hang around the house while showing. New staging can present an altogether different picture.