Liz, Home Buyer in West Hollywood, CA

Why are these houses, that are in desirable areas being listed so cheap? Is there some kind of hidden jack up in price or is this for real?

Asked by Liz, West Hollywood, CA Wed Apr 28, 2010

We are trying to move form Des Moines, Ia. to Los Angeles for our daughters schools, but are having a hard time finding what we are looking for in a house that isn't outside our budget. Now I'm seeing several houses for a crazy price and I'm wondering: what's the catch? Surely these houses aren't REALLY selling for the price shown.

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Answers

9
Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.

Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”

Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)

Different Banks have different philosophies about pricing their properties: You cannot draw any conclusions without a good analysis.

Have your Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. It is the surest way to determine the Market Value of the property.
0 votes Thank Flag Link Mon Sep 12, 2011
Liz,

There is a lot of inaccurate information out there, this is why it's a good idea to work with an experienced realtor who can show you real listings with accurate information. If it looks too good to be true, it probably is! A lot of these are foreclosures, short sales, and distressed properties that are either incorrectly listed or there is a back story! If you need any assistance, please feel free to contact me any time!

Regards,

Julie Kryukova
310.402.8181
http://www.larealproperties.com
0 votes Thank Flag Link Mon Sep 12, 2011
I'm thinking they're short sales Liz.

Short sale listing prices are imaginary to me because they're not official until approved by the bank. AND, many are surprised when they get a huge counteroffer. Crazy prices in short sales are unfortunately just a tease and marketing ploy to get multiple offers in.

I wrote a blog about short sale prices. You can find it here: http://www.trulia.com/blog/felixhung/2010/09/offering_the_fu…

The catch: you may be one of 20 offers on that short sale listing and the accepted price may be a lot higher. if accepted by the seller, your short sale offer may be countered to fair market value.

Hope that helps. Have your agent look up each and show you the short sales vs REOs vs traditional sales.

Felix
0 votes Thank Flag Link Mon Sep 27, 2010
Most foreclosure sites advertise lure prices to get you to sign up but there is almost always a catch.

If you want to search the most up-to-date MLS listings go to:
http://WestsideMLS.com

The following Web page has a map that shows you average prices in the Westside areas of LA. You might find it informational:
http://www.lalife.com/

PS - I am originally from Iowa and would be happy to have a conversation with you to see how I can be of assistance. You can click on the Web References link below and contact me thru my Web site.
Web Reference: http://MrWestside.com
0 votes Thank Flag Link Mon Sep 27, 2010
You're right, they aren't really selling for those prices. Bait and switch pricing on short sale homes is rampant in Southern California. Agents price them ridiculously low to generate calls and multiple offers so that they can hopefully double end the deal. Either these houses will get bid up to close to the market value or the lien holder will counter with a number close to the market value and the agent will have an "approved" short sale to market.

Take listed prices with a healthy dose scepticism these days if it's a short sale.

Brad Davidson
http://www.wehelpubuy.com
0 votes Thank Flag Link Thu Apr 29, 2010
Dear Liz,
It's hard to say, not knowing the houses in question. I would venture to guess, if it looks too good to be true, it probably IS. You might consider leasing in your desired area until you become familiar with our fair city, and purchasing later.
0 votes Thank Flag Link Thu Apr 29, 2010
Hello LIz,

The homes you are seeing for sale are probably foreclosures. Let's say you didn't pay your mortgage payment of $4000 per month for 6 months. They would post it as foreclosure for sale for $24,000. What they don't usually mention is the address. It sounds like you are considering West Hollywood. On the low end homes start at 700k for a small home. A two bedroom condo can be had in the 400s that's a major fixer. There are other areas to consider if that's out of your budget but if it looks too good to be true or the address isn't disclosed that it's proabably not real. Also, sometimes by mistake homes for lease will be listed for sale. So the price can be per month but look like it's for sale at that price.

Best,

Monique Carrabba
The Carrabba Group
Keller Williams Hollywood Hills
mcarrabba@kw.com
(323) 899-2900
0 votes Thank Flag Link Wed Apr 28, 2010
It depends where you are seeing the information. Because even with changes in prices with the housing situation Los Angeles prices are going to be higher than Des Moines. I am thinking you might be looking at the prices on Realty Trac or Foreclosure.com. These sites indicate all properties in foreclosure but they are not necesarily listed for sale. When you look at these foreclosure sites you need to make sure you understand how they work and what fields to look at. These foreclosure sites are good tools but they are only a starting point for your research. You really need to find a buyers agent to assist you if you are transfering from Iowa to Califiorina so you make the right choice. The foreclosure sites are good but it assumes you know locations you want properties.

Good Luck
Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee
http://www.milwaukeebailout.com
0 votes Thank Flag Link Wed Apr 28, 2010
Liz

Your market was hit hard during the down market. Houses in CA dropped significantly. Mostly, these houses that you're looking in, may have suffered from the decline.

Got Luck
Web Reference: http://www.kandhHomes.com
0 votes Thank Flag Link Wed Apr 28, 2010
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