They Cut, And Sold Higher

Let's say this: No one wants their listing to be on the market for a couple months or more.

When the market as a whole is moving, and your listing isn't, the anguish is real. Something has gone wrong.

Most commonly, the house is stuck because it's priced too high for what it is. There's something about the condition, or the location, or both, that makes buyers see the home as less valuable than the original pro forma analysis suggested.

If it's a price problem, you cut.

In one case recently, the cut really triggered action.

1204 Faymont (4br/4ba, 3598 sqft.) is new construction in Liberty Village, once the least-pricey little neighborhood within Manhattan Beach.

The listing debuted with almost perfect timing post-Summer, a week after Labor Day, asking $3.800M.

It got plenty of looks (we had clients come), they had some fun open-house promos, and for most of its run, this was the lowest-priced new construction SFR in Manhattan Beach.

But it sat for 5 weeks with no offers.

Was there something about the house people weren't jamming with?

Too pricey for a location so close to Trader Joe's and multi-family units nearby?

The seller relented, and cut $150K to $3.650M.

The cut drew notice. Buyers who had been "circling" close, but not acting, got active. A competition emerged, and one said "this is not getting away."

The home closed at $3.801M, $151K higher than the reduced price, and $1,000.00 higher than the first list price.

The cut had actually made the home more desirable. When there's competition in the air, any prior reservations all evaporate.

The sale is now the highest price ever paid within Liberty Village, the district east of Redondo Ave.

We know, because our Edge office has twice previously has set the record with listings ($3.320M in May 2021, and $3.725M in June 2022). Records are made to be broken. 

Also recently, when we saw another East Manhattan listing cut, we speculated that it might get bid up. 

It did, but...

1160 Shelley (4br/3ba, 1737 sqft.) cut $165K in mid-November to get just under $2M, at $1.985M with 66 official DOM.

It was a price cut that we compared to "sending up flares."

Hey! We're trying to sell over here! Come and get 'em!

The prospect of a sale under $2M was so interesting, we did a whole blog post to discuss how common sales of Manhattan Beach SFRs under $2M are.

Here, the competition and overbidding were – ummm – not quite as dramatic as at 1204 Faymont. 

The sale closed $1,000.00 over that much-reduced list price, at $1.986M.

It was quite a climb down from the start price, $2.299M.

Nerdy side note: There have now been 37 closed sales of SFRs in Manhattan Beach this year, with 3br or more, under $2M. Four of the last 5 were in East Manhattan.

Somewhere in between the $1K bump and $151K bump, there was the archetypal "cut till you create an auction" strategy over at 1504 Mathews (4br/3ba, 2024 sqft.).

We took note of the activity on this listing in a mid-July post, "This Listing Cut $600K Within 3 Weeks."

After they got it down to $1.999M, it got bid back up again, $106K over the last asking price to $2.105M, closing in August.

There, everything happened quickly. The listing only racked up 25 days on market. That's quite a result for a case where the start price was nearly $500K too high ($2.590M).

Rather than rely on cuts and overbids, it's best to start at the right price!