If we’re looking back, as I’m fond of doing, 2009 was a really bad time to list your house. There were buyers, sure, but there was mostly just chaos. In March of 2009, the DOW had just finished its 16 month decline that shaved nearly 8000 points off of that index, and the world was generally uncertain of what would come next. Around that time, there were many in Lake Geneva who kept the calm by saying that we were different. That Lake Geneva, in spite of its extreme connection to the health of the financial markets, would be just fine. There was Kool Aide being mixed, and while I sipped a bit from time to time, most agents here bathed in it so they could more easily guzzle it. 2009 was a strange time.
When the stock market reached that March bottom, many owners of property here figured that things were either about to get a whole lot better or a whole lot worse. There were very few without an opinion. And so in July of 2009, an owner of a beautiful vacant lot in Loramoor decided to list. For $3,495,000. The markets would add back half of that lost wealth by December of that same year, but that did little to calm the fears that something extra bad remained in the offing.
This lot. It was listed then, and it sat from then until now. The price was shaved to $2.95MM, then some more, and then a little more. Then, once the shaving was done, they shaved it more. $2.1MM was the final list price, and off of that price I sold the lot yesterday to a beloved client of mine for $2MM.
The lot, admittedly, is a rarity in our market. 110′ of lakefront, 1.5 acres, give or take. The surrounding homes are newer, bigger, nicer. The association is spread out, with large lots and large homes. If you could draw up a location to invest in a nice but not entirely over the top lakefront home, this would be what you’d draw. At $18,181 per front foot, I challenge you to find a better property that’s sold at this price in the past 18 months. I am, as you can see, a fan of this sale at this price for this purpose.
Like all of my deals, this deal can teach us a lesson about the behavior of both buyers and sellers in this specific market. Buyers seeking lakefront in the $2MM to $3.5MM range are generally presented with two distinct options: Nice home on crappy land. Crappy home on nice land. There hasn’t been a true offering of nice home on nice land without some nearby impairment (launch, giant association pier, etc) for quite some time. If you’re a buyer capped at $2MM, you have plenty of tremendous things to consider, but if you’re a buyer who would rather find something of the caliber that $3.5MM can buy you, you’ve been wandering in the desert for quite some time.
The buyer here wasn’t particularly looking for a piece of land to build on. Rather, the buyer wanted a built house, one that could be bought, moved into, and enjoyed. But the market didn’t yield a match, and this was the most practical option. The negotiation of this property is where the lesson lies, and it starts with understanding that Million Dollar Listing negotiations are not Lake Geneva negotiations.
Million Dollar Listing goes like this: I buy a $6000 suit, $1400 shoes, a $100k car. I wear the suit, those shoes, drive that car. I would also be sweating a lot out there, but that could be taken care of for the camera with loads of towels and constant off-camera-fanning. I write an offer on a house, I call the other agent. He says I’m low. I say he’s high. He calls his seller. He calls me. We stare into the distance, on the split screen. We then declare we have a deal. Hurray! Then we go to dinner where we buy a nice appetizer for $54 and go home to our glassy, modern homes, the deal done.
In Lake Geneva, you make a bid in June, let it rest for July, August, September and October. Then, you try it again. If the seller has been sufficiently worn down, and his market fatigue hangs on him in such a heavy fashion, then he takes the bid and you close. Patience is a requirement of a purchase here, and some of the best deals I’ve done are deals where the buyer and seller take many weeks or months of time to wear down the other side. Of course, this has many disadvantages, as other buyers are apt to snap up a property while this grudge match occurs, but if the property isn’t one that you must have, and if the competition for the property is light, then waiting out a seller for a bit is generally a great idea.
To the buyer of this property, well done. It says a lot about a buyer if they stick with an agent for a year or longer while engaged in an active, somewhat disappointing, massively frustrating search. Patience and loyalty are two concepts that real estate markets don’t respect all that much, but I sure do.