There was a lakefront closing last week. A pretty house on 103′ of North Shore frontage closed for $2,725,000. If that were the end of the story, the story would be short, but it would still be sweet. The sale would provide ammunition for those that are pure “price per foot” worshipers, and the market would see one fewer lakefront home on the open market. But, as things tend to go, that isn’t the end of the story.
This home, for the right person at the right time, is a very perfect lake home. The house is nice, and newer, and mostly high end. The frontage is quite level, the neighbor to the West quite lavish. But strangely enough I never had the occasion to show this home. The home was wedged tight up against a large association pier, and access to the home was basically through that association parking lot, and while I can always change appliances or paint colors, I can never, ever change the presence of an overpowering association pier. For the right buyer, it’s a great house. For the broad market? It’ll always have a location issue that won’t go away.
But aside from the neighboring association that I obviously didn’t care too much for, it was an impressive structure, and impressive builds generally win the day over blue chip locations. This property had been for sale for a while, having been reduced in price a few times before settling in on the final asking price of $2,799,900. If we look at that sales price now, it looks painfully close to the ask when viewed through the eyes of most any buyer. And in that there lies this: Not only can objective advice be a rare commodity in a housing search, a keen ability to succeed in negotiations is a completely overlooked skill.
And why should it be? When buyers are buying, they’re spending gobs and gobs of money, many times cash money. Buyers align with agents for varied reasons, but shouldn’t negotiating style and ability go right at the top of the list? If an agent is nice but can’t get a buyer the right property at the right price, is niceness truly an asset? That isn’t to say that I’m not nice, because I am, most of the time, but that is to say that a little shrewdness here and there to accompany bold candor just might be the exact thing that your real estate search is missing. There are lots of reasons that properties sometimes sell very close to their asking prices. Usually, this is because the home was priced accurately at the start. Or the listing was somehow rare in the marketplace. Or there were multiple bidders (see prior story on Cahoots). Without knowing exact circumstances, it’s impossible to know the exact motivation for a buyer, but we can certainly dissect a sale on the known merits.
Over the past 12 months, I’ve represented handfuls of buyers and sellers. If I look at only the sales that possessed either lakefront or lakerights to Geneva, and I look at the sales that I represented only the buyer, then I can get a feeling for how effective my buy-side negotiations have been, and in turn, you can get a feel for how effective I have a chance at being for you. Past performance cannot guarantee future results, but it sure can make you feel warm inside. So while the last lakefront sale represented a deep discount of 2.7% off the ask, my 12 month running average for buyer-side negotiations is hovering right around 16.5%. Each negotiation is different, and some sellers simply refuse to, or have no reason to budge, but doesn’t a 16.5% discount off ask sound maybe slightly better than a 2.7% discount? Even Jimmy Falon knows that everyone wants more cash, and he’s a liberal!
For now, let’s celebrate that most recent sale. There’s a rash of lakefront closings on the horizon, as these many pending deals slowly trickle towards the closing table. We’ll break down the numbers after each sale to see just how the sale fits in to the lakefront market. Hopefully we’ll find some great values in these upcoming numbers, and hopefully we’ll have a chance to work together one of these days to lay claim to our own brand of Lake Geneva value.