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Not all REO’s are deals

by sfishome on February 23, 2009

Of the 23 REO’s in the list below, one that stands out appears to be an over priced 1 Bedroom. Granted, 1818 Broadway is in Pacific Heights, but an REO that is Asking over $1000 per SqFt? Yikes. Generally REO’s are priced below market. Banks usually want the “inventory” moved quickly, so over pricing isn’t an option.

This photo of the building is the only one in the Listing… but it’s on lock box, so I may have to break out the trusty video camera for a little tour to get a look at the interior.

One of the reasons I think it’s priced too high is my new listing, 3501 Laguna, is also a 1 bedroom but is larger and in what I think is a better location (it’s across from two parks, Fort Mason and Moscone Rec), yet it is priced lower. The size difference is 768 SqFt vs. 630 SqFt and that usually makes a big difference in one bedroom apartment. But the size makes the $20,000 price difference (only 3% apart) look exorbitant since 1818 Broadway is 20% more expensive than 3501 Laguna in Price Per Square Foot.

So 1818 Broadway hardly seems to be your typical REO. Maybe they assume any offers will be 10% below their asking price, and I’m just guessing but a $600,000 price would make 1818 Broadway look far more attractive and likely sell quickly.

If there is any lesson here, it’s to shop, shop and then shop some more. A dedicated Buyer can know the market better than most agents for “their market” and will develop a gut feel for what’s a deal and what isn’t. Unless I show up and find a place larger than 630 SqFt with nice outlooks that is also remodeled, I suspect this one isn’t a deal. Time will tell.

Of course, over priced listings tend not to sell in San Francisco anyway, so 1818 Broadway could be a buying opportunity in that a Buyer can go in with a very low offer and try to push it through. My guess is not too many other Buyers will bother, so your one offer just may do it even if it’s quite low.

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