October 8th, 2008 categories: Condo Knowledge
In the 2008 New Orleans Real Estate market it does help to know what the seller paid for his or her condo. It is important as the New Orleans Real Estate market has been rather flat for the past several years dating back to Katrina in August of 2008. There was a much smaller bump in the post New Orleans Katrina condo market than many people tend to think. You had an almost equal amount of people selling and buying. Some buyers did pay too much but that can happen at any time if you as a buyer are unaware of value.
This thought has helped me in getting several of my clients very good deals for two basic reasons. Knowing the value of the condo first plus knowing what the seller pays may give you an edge as a buyer. Second it helps to know the seller’s motivation and what the seller paid for the condo. Once you get back past 5 years it means much less. There are a couple of actual deals that will be good examples.
A Magazine Street Condo that we made an offer this past Summer is a good example. The couple had lived in the unit for four years and had found a new place in Atlanta. I looked up the price of the unit and saw that they paid 215k. I had figured that the condo was a good buy in the 220s range. The sellers were asking 229k. We offered 215k and the seller took our offer because they were glad to sell and move on to a good deal they got at the other end. It even surprised me.
I sold another nice two bedroom and two bath condo on Prytania that had just been reduced from 239k to 199k. It was the best thing out in the market. They had it listed with another agent at a higher price (239k) and the new agent wanted to get it sold as per the owner. It was easily worth 199k, my buyer at first wanted to bid much lower. My numbers said it was worth 210k easily. We bid 197k and got the condo bought before another bid came in. Knowing the value is a must for a buyer.
Sometimes sellers just want to sell after having been listed at a higher price and getting no activity. Pricing 10% over the value will scare off buyers in most cases. Another condo in the complex was later listed at 229k and was not nearly as nice as the one my client was able to purchase.
I had a potential client just call me about selling his condo in the next couple of months. Before he called back I looked up the condo that he purchased in May of 2005. I saw he paid 167k for a nice updated studio. I also noticed that the condo was owned by an agent who had purchased the unit for 127k in Jan. of 2008. The unit did not go up in value that fast. It was a developer’s conversion unit and that was bought a a great price.
There were better units selling for less money by the developer after his purchase. He did not know any of this but thought he had gotten a good deal. I think the unit may be worth now what he paid for it at best. He should have been told by the selling agent which was his agent at the time. I bet he would have thought twice about his offer if he knew the info.