October 27, 2010
The Margarido House Sells "At Asking" (And 38% Below Original List)
Two weeks shy of a year on the market, the sale of the "Margarido House" over at 5950 Margarido Drive in Oakland appears to have closed escrow on October 12 with an MLS reported contract price of $3,395,000.
Interestingly enough, the brokerage represent both buyer and seller is advertising the sale in print touting "Originally offered at $3,395,000." Not $5,500,000. Or $4,795,000. Or $4,300,000. Or even $3,950,000.
But hey, having reduced its list price to $3,395,000 in September after relisting anew in June, it is an official sale at "100% of asking" and just under "four" months on the market according to MLS based reports.
∙ Mmmm...Margarido Even More Happy Hour Pricing (If You're Buying) [SocketSite]
∙ The (5950) Margarido Happy Hour Now Starts At (Just Under) Four [SocketSite]
∙ March Madness For 5950 Margarido (Coincidence?) [SocketSite]
March Margarita Margarido Madness As 5950 Goes Live At $5.5M [SocketSite]
∙ There’s Green (And Perhaps Even Platinum) Up In Them Thar Hills [SocketSite]
∙ A Margarido (Sale) On The Rocks [SocketSite]
First Published: October 27, 2010 6:00 AM
Comments from "Plugged In" Readers
closing date matters
sale price matters
arms length matters
nothing else matters
Posted by: resp at October 27, 2010 8:02 AM
"nothing else matters"
Only the 5% or the cool 170 grand pocketed by the realtors matters.
Nothin else matters.
Posted by: alazyman at October 27, 2010 9:37 AM
I agree with resp.
Of all the elusive things done to distort "real"ity, the sale price to list price lies are mostly harmless. Real estate agents are commissioned to get the highest price and buyers should always try to get the lowest price. So is anyone surprised by these tactics. The industry has no regulation and hasn't set enough standards and there is no real motivation to do so. Here are the things that do not matter (to an educated buyer):
Prior purchase price (this is a red herring)
It's all about comps.
Posted by: eddy at October 27, 2010 10:04 AM
The good news is that thanks to the internets, people will know this was 38%+ off of asking and was on the market for almost a year. Aggressive price-cutting works!
Listing history always matters to a buyer.
Posted by: sfrenegade at October 27, 2010 10:12 AM
"the sale price to list price lies are mostly harmless."
If only that were true. It's what gets quoted in statistics to the media and the media prints this crap.
Educated buyers always care about DOM because it tells you about desperation and negotiating power.
Prior purchase price, you are correct, and I've mentioned the anchoring effect before and how destructive it can be.
Posted by: sfrenegade at October 27, 2010 10:15 AM
Informed buyers know to ignore list/close as well as DOM. We're all quite informed here on SocketSite. But we're the minority of the buying market.
So thanks to widespread naivete in the buying public, bogus stats like list/close and DOM do matter.
Posted by: The Milkshake of Despair at October 27, 2010 10:22 AM
Prior purchase price does matter in areas where the housing stock varies widely and few properties are directly comparable, which is many older and desirable parts of the bay area.
The reason it matters is that you can use prior purchase price to get an idea of how the market valued that property relative to others at the time of its previous purchase, and thus get an idea of its current worth relative to other houses for sale today.
For example, if a particular house sold for 10% more than the $/sq ft average at t=0, it is reasonable to think it would be worth 10% more than other houses for sale today controlling for condition, remodeling, mix, etc. That is, at t=0 it was shown to be a desirable property relative to others, which can be used to determine an offer.
Posted by: djt at October 27, 2010 10:43 AM
Still wasting away on Magarido Street is the home at 6001 Margarido (4,953 sq.ft.). RealtyTrac is now showing the auction on November 1. The home at 6001 Margarido was purchased for $2.15 million in Oct. 2005 with $1.935 million from Countrywide. Nothing motivates a seller like pent up supply...
Posted by: EBGuy at October 27, 2010 10:49 AM
By educated / informed, I meant that anyone looking to buy a home in today's technology enriched world should be able to uncover all relevant facts about a home and see through the crud put out there for the lazy. And comps are the single best method to value a property (and its trend) today. Prior sales price is just a historical neighborhood comp. But it shouldn't be given anymore weight than any other comps. It is an illusion. It is also why "resp" cautioned that 'arms length' mattered. Just because some "one" person paid a price does not mean that is the homes market value.
Posted by: eddy at October 27, 2010 10:52 AM
credits to buyer also matter, and are almost never disclosed to the public. Some properties sell with credits for closing costs, as well as money to make repairs included in the purchase price.
Posted by: lyqwyd at October 27, 2010 11:29 AM
Are you guys really going to have this conversation again?
Posted by: EH at October 27, 2010 4:01 PM
The tax basis for the owner/builder of 5950 Margarido is $2,160,413. I'm guessing he cleared $500k tax free (and then some?)
Posted by: EBGuy at October 27, 2010 4:31 PM
Mmmm...tax basis probably does not include the architect, engineering, permits, services and associated fees, the full cost of appliances, finishes, tile, flooring, etc. If the tax basis is 2.16 million, I bet there is more than 2.5 into it, if not much more.
I built a house. I know the form Alameda County asks you to fill out. Certain things don't get counted in the value of the improvement.
Posted by: djt at October 28, 2010 3:10 PM