Caveat Venditor

From the Record:

Seller beware: It’s a buyer’s market

As a real estate broker, Joanne English Rollieson knows how to price houses. But a rapidly cooling real estate market recently forced her to cut $30,000 off the $525,000 asking price for her own home in Teaneck.

“Buyers have a lot to choose from,” explained English Rollieson, president of English Realty in Englewood, who was successful in selling her four-bedroom Colonial. “If sellers are motivated to sell, they need to be more realistic with their prices.”

It’s a lesson home sellers are learning all over North Jersey. After five years of record sales, double-digit price rises and frantic bidding wars, the fizz has gone out of the real estate market, both nationally and in North Jersey.

The signs of a slowdown are everywhere. The National Association of Realtors recently reported that its index of pending home sales — that is, where the contract has been signed but the deal has not closed — is down 16 percent from July 2005. And the U.S. Commerce Department recently reported that the inventory of unsold homes was at a record high.

“Sales are slowing, homes are plentiful and sellers are negotiating,” said David Lereah, chief economist of the Realtors association.

For sellers, all this data adds up to one question: How to sell in a buyers’ market?

The first answer is probably the most painful: Price it realistically. Just because your neighbor got $600,000 a year ago doesn’t mean you’re going to get $650,000 — or even $600,000.

“A lot of sellers haven’t accepted reality,” said Nick Tselepis of the Nicholas Real Estate Agency in Clifton. “Anything eventually will sell — it depends on the price.”

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21 Responses to Caveat Venditor

  1. UnRealtor says:

    Caveat Greedy Grubberis!

    Ride the market down Grubbers!

    Jun 15, 2004 – Closed $755,000 (MLS 1671861)

    Mar 05, 2006 – $879,000 (MLS 2253723)

    May 01, 2006 – $829,000

    Jun 05, 2006 – $795,000

    Jul 13, 2006 – WITHDRAWN

    Jul 14, 2006 – $795,000 (MLS 2299446)

    Sep 07, 2006 – WITHDRAWN

    Sep 09, 2006 – $745,000 (MLS 2317848)

    Sep 27, 2006 – Under Contract

    Oct 20, 2006 – Closed @ $705,000

    Now the market is even worse — lots of drops to come for greedy sellers riding to the bottom.

  2. UnRealtor says:

    Property above is 18 Meadowbrook Rd, Short Hills.

  3. Clotpoll says:

    Hey UnRealtor,

    Why is it greed to attempt to realize the best price the market can bring you as a seller? Do you own a home? If you were selling your home, wouldn’t you try to get the best possible price…even in this allegedly-collapsing market?

    What will be accomplished for you if housing craters out? If you’re a homeowner, why are you interested in seeing the value of your own asset plummet? And, if you’re not a homeowner (that’s my assumption), what’s in it for you to be able to swoop in in a couple of years and purchase a depreciating asset that no one else wants?

    Or…do you just enjoy engaging in Schadenfreude?

  4. skep-tic says:

    the author of this article discussing proper pricing starts out by referencing the ASKING price of a house that hasn’t sold. this figure is meaningless.

    any proper analysis of pricing should start with what comparable houses sold for during the past 1-2 months.

    I think if local journalists started writing such articles, it would open a lot of sellers eyes. Realtors and sellers seem to be pricing from comps that are very old. the market is deteriorating by the month. you’ve got to throw all that old data out and say this is what things are selling at NOW.

    you’re getting realtors saying, “sellers haven’t accepted reality.” well, how about some specifics. Such as a 3/2 house on this street sold for X in Aug 2005. A similar house in the same neighborhood sold for X-Y two months ago.

    Until realtors start getting specific about how the market has changed, sellers will keep hanging onto platitudes about how this is just a “pause” and that everything will be fine in a couple of months

  5. UnRealtor says:

    “Why is it greed to attempt to realize the best price the market can bring you as a seller?”

    Well, if you can look at the above Greedy Grubber’s price history and come to that conclusion, nothing I can say will convince you otherwise.

    He wasn’t trying to get “the best possible price” he was trying to get an impossible fantasy price.

    As for “seeing the value of your own asset plummet,” don’t cry over lost speculator-driven paper gains. If this guy wasn’t greedy, he could have sold at a fair profit. Instead, he was forced to sell for a loss, after two years of ownership.

  6. factsrule says:

    The Bergen Record’s new Sunday real estate section is not new it is being revived from the early 90’s during the last down turn. I remember it well, and just goes to show history does repeat itself.

    Now as far as accuracy, well that is another story. They show case a house in RIver Edge and what it sold for, but the story as printed is not the real story. I know the house well and followed it. Below is what really happened..

    The house closed in the Fall of 2004, for 370k, it was a standard 3 bedroom Reis colonial, the town is full of them, they consist of 3 bedrooms, with the 3rd being more of a closet then a bedroom 1 to 1.5 baths, LR, DR, and a small non-eat in galley type kitchen.

    This house dod need work. They replaced the kitchen with a cheap Home Depot type one, home depot light fixtures. and bath fixtures, they refinished the floors and painted everything white.

    The kitchen renovation was poorly done, so I assume they did it themselves. The also put in new vinyl windows. Finally they painted the basement walls and floors, but painting concrete walls and floors does not to me constitute a finished basement, which is how they advertised it.

    The house has no back yard,and the large side yard is not large it is long,but width wise you can bearly fit a table out there.

    The house is on Bogert Rd. which is very busy street, which feeds into Rt 4. People on a regular basis do 50 miles an hour or more on that street, and according to the police the majority of the speeders are residents of town.

    Now the investors put the house on the market in 2005 for 679K, they tried to sell it on their own for months with countless open houses . They advertised the attic with pull down stairs where you can only stand in teh center as a 4th bedroom, and claimed the house was perfect for extended family etc. I guess that is where the so called finished basement came in.

    The house sat for almost the entire year of 2005, with price drops down to 599K, before they took it off, and then put it own with the realtor as discussed on the paper. The realtor too dropped the price, more than is stated int eh paper. The house closed in March or April of this year.

    What is really sad is that now there are much better, bigger, and nicer houses on the market. Houses with new eat in kitchens and family rooms, frie places, 4th bedrooms, all on nice safe quiet streets. And these houses now, have asking prices of 50k to 75K less than the 525k these poor schmucks paid for the one discussed in the Record, and to boot these better offerings are still coming on in River Edge and we are now just about into November.

    Any how just thought I would share the real story of that house, not what passed for truth as was told to the reporter for the Record.

  7. d2b says:

    At least she sold her house. I bet that every person in her office showed that house to every prospect that came in the door. I wouldn’t surprise me if she lowered the price because a paritcular buyer, looking for a particular property, was steered into that property.

  8. AMS In NJ says:


    In response to your post #4, the comps should be NO MORE than 6 months old. However, in light of the just-then occurring transition, even those comps are inaccurate. In my office we’re running the comps & then looking at the first reasonable price reduction & starting there. So if the comps come in at $639K say, the best starting point is in the $590k range.

    Even the most detailed explanation usually doesn’t convince the homeowner, unless they’ve owned the house for a good long while. My luck I’m running into a) flip jobs (literally) b) people who bought high and c) just plain dumbfolk.


  9. v says:

    Tell them about this blog.

  10. skep-tic says:


    thanks for engaging us doomsayers on this board.

    when you present these recent comps to clients, do they just reject them out of hand, or do they at least try to formulate a reason why their house is diff’t?

    what would you estimate is the level of all out speculation in your area (i.e., flips)?

    thanks again

  11. Hard Place says:

    UnRealtor – just taking a look at the houses in the surrounding areas to 18 Meadowbrook. Apparently 6 Meadowbrook sold for 499k earlier in the year. Does anyone have the MLS# for that one? Curious to see what it looks like.

  12. UnRealtor says:

    Hard Place,

    6 Meadowbrook closed @ $799K in Aug 2005 (MLS 2082910).

    8 Meadowbrook (MLS 2313131) came on at $709K in August, and has been at $699K Since Sep 27. No Greater Fools signing up.

    Lots of short-term owners on this street, probably people who used exotic financing hoping to camp out for two years and then resell for a profit. Oops.

    Here’s another house on that street, pulled off the market in August, and likely to reappear in the spring ‘when things are better’:

    93 Meadowbrook Rd

    Mar 22, 2006 – $799,000 (MLS 2259341)

    Apr 06, 2006 – $749,900

    May 03, 2006 – $725,000

    Jun 03, 2006 – $700,000

    Jun 15, 2006 – $699,000

    Jun 17, 2006 – $679,000

    Jul 14, 2006 – $650,000

    Aug 09, 2006 – WITHDRAWN

    Ride the market down, baby!

  13. UnRealtor says:

    Some excellent analysis in this New Yorker piece:

    Posted by “Waiting” in another thread.

  14. Hard Place says:

    Must be a typo in the tax records for 6 Meadowbrooks. Shows $499k.

    93 Meadowbrook is a shack, I think they would be lucky to get in the $500k region.

    Riding this market down. I’ve got my dollars in the bank and in the market waiting and growing…

  15. BuyNextYear says:

    How do you get tax records (for free) for SH/Millburn? I couldn’t find in the tools section. thx.

  16. Clotpoll says:

    Back to UnRealtor-

    I’ll concede the facts on 18 Meadowbrook Rd in Short Hills (response #1 to “Caveat Venditor”) do indicate that particular seller as being a greedy, ostrich-like “flipper”. However, I’ll still argue that’s not the case in a great number of NJ non-condo communities. The broad market of single-family homes in NJ bears no resemblance to Phoenix, Vegas or any other areas in which scores of speculators have been wrung out of the game. The price run-up that began here when the tax laws changed in the mid-90’s was- first, foremost and always- supply and demand driven. Now the shoe’s on the other foot. No argument there.

    Still, my antennae go up when I hear anyone opine on what is (or isn’t) a “fantasy price”, “excessive profit” or “fair profit”. People who bought homes here from 1996-2005 didn’t do so at gunpoint. I also cannot fathom that even a simple majority of those purchasers thought for a second about the “Greater Fool” coming to purchase from them a few years down the road…or even knew what a Greater Fool is!

    So, UnRealtor, why the vitriol? This stuff seems to be more than statistics to you. It seems personal. You still haven’t answered my question: do you have skin in the game? And, when the endgame is upon us, what’s your play?

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