Almost nothing to report. Lots of doings in the rental world, between price drops (once you’ve passed the opening of the school year, you’ve lost most of your market for homes) and actual rentals, but the single-family home market is practically dormant. I think that’s unusual for this time of year, but I haven’t run the stats to see whether my memory of past years is correct; I’ll post here after I do so.
I do note that 5 Sylvan Lane, Old Greenwich, reported as under contract just two weeks ago, is back on the active list. There are many, many reasons for deals to fall out of contract, ranging from sudden job transfers to the surprise delivery of divorce papers, to, the most dreaded by all commission-craving agents, buyer’s remorse. So you can never tell.
Sylvan’s price had been driven down over the past two years from $6.8 million to $5.195, and I considered it a pretty good deal: no flood problems, new construction that would certainly pass any house inspection, so what went wrong? Who knows, but that pesky buyer’s remorse is always lurking in the background of any purchase agreement.
Earlier this year, we managed to get a bid of $4 million accepted by an owner who’d paid $4.3 for the house, spent a couple of million restoring and improving it, and originally priced it at $6.750. $4 million was an incredible bargain (still is — call me), but when we notified the buyer with the happy news that his bid had been accepted he developed cold feet, and balked. That happens all too often (from an agent’s perspective), but that’s part of selling real estate here. In Greenwich, accepted offers are unenforceable by either party, seller or buyer, until an actual contract, prepared by the parties’ lawyers is executed by both sides — until then, either party can walk, with no cost; in fact, I have often encouraged buyers to toss a low-ball offer at a house, because they really have nothing to lose.
In other parts of the state this problem has been “solved’ by permitting real estate agents to draw up binding agreements (and thereby engaging in the unauthorized practice of law, in my opinion), but what could be dumber than committing millions of dollars to a transaction based on a contract drafted by a person who has no legal training and in fact, has no requirement to have even graduated from nursery school?
So I think the Greenwich Realtors’ approach is the proper one, but it does lead to disappointment for both sellers and buyers (when their “accepted” offer is dumped in favor of a higher bid) alike. In the case of 5 Sylvan, it appears that it was the seller who suffered the bitterness of lost expectation.
Were I advising a client in this price range, I’d suggest they submit an offer in the mid-to-high fours, just to see whether they couldn’t capitalize on the builder’s dashed expectations. Once a seller has started spending money in his mind, as this one probably has, a slightly-smaller sum is often still attractive.