Chapter 7: Kate gets outbid

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Still house-hunting, our guest blogger Kate in the Valley is still confused: who are these people bidding way over the asking price for dumpy houses?

‘Maybe I am a bit out of the loop, but I just discovered PropertyShark.com. It is completely amazing. The sale information is accessible so much more quickly than on Zillow and the level of detail is astonishing. As I was exploring this fantastic site, I entered an address of the house that Mr. Kate and I last bid on.

‘The house was originally listed at $780k but when no offers came in, the home was re-listed $730k. It was a small 2 bed/1.5 bath in Sherman Oaks that needed work. A whole lot of work. The back half of the house didn’t even have a subfloor. The kitchen was semi-gutted as were both of the baths and there was a huge dead tree in the backyard that would cost thousands to remove. So we bid $715k even though we felt this was high for the property. We really liked the neighborhood and we are so tired of the process, so we just bid.

‘The counter came back with the multiple offer box checked (there was one offer in addition to ours) and the price was $745k. We walked and the house went into escrow with the other bidder. The sale closed on July 13 so I figured the information would not be available on Property Shark yet, but it was. And it was shocking.

‘The sale price was $789,909. First off, nine-hundred and NINE dollars? Whiskey tango foxtrot? Seriously, did the nine dollars make a difference? Second, this house sold for approximately sixty-thousand dollars over list? When I could have bought it for a mere fifteen thousand over list? I presume that this was one of those cash-back-at-close deals. But I can’t imagine that this house would honestly appraise at that level. And finally, there are plenty of other houses (with three bedrooms, even!) for sale in this neighborhood for less. At $720k, this house was almost a deal but, at $790k, this is absolutely the worst value in the neighborhood. It just doesn’t make any sense. But I suppose this transaction offers some insight as to why, even though sale volumes are way down, sale prices still appear to be going up.’

Thanks, Kate
Comments? Thoughts?
Read Kate’s blog here.