Home prices are at record highs, but a growing number of properties are listing for a whole lot less. Like, $1.
Brendan DaSilva, a real estate investor and agent at Keller Williams NJ Metro Group, recently put a Newark, NJ, property on the market for this puzzling price.
“I’d never listed for $1 before,” says DaSilva. But his gamble paid off: Within days, the listing attracted “hundreds of inquiries and dozens of offers” that ultimately pushed the final sales price up to $550,000, which he calls “record-setting for a three-bed 1.5-bath sale.”
Although some sellers might cringe at listing their property for a buck, DaSilva points out that any asking price is simply a starting point. “I have argued with sellers for years that the market dictates the sales price,” he says. “Here we are now with a proven concept.”
The weird logic behind $1 homes
One-dollar listings are rare but on the rise: 512 homes were put on the US market in June for $1, a 24% increase from one year ago and an 82.9% jump over two years.
“The number of homes listed for $1 has climbed steadily as sellers look for creative ways to draw buyer attention,” explains Hannah Jones, senior economic research analyst at Realtor.com.
Between elevated mortgage rates and record home prices, buyers have been scarce lately. Even megamansions are being listed for a buck—including a five-bedroom, 5.5-bath, 6,000-square-foot house in Colts Neck, NJ, represented by investor and agent George Pavlushkin, who decided to give the $1 sales tactic a try for the first time in July.
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“I have not listed like this before, but with the economic downturn, it’s a very different approach to marketing that drives more traffic,” Pavlushkin explains. And it paid off, with “tons of showings and multiple offers and tons of calls and questions.”
If there’s any downside to $1 listings, it’s that they get too much attention, often from non-serious buyers who can be a time suck to sift through. Or, if you’re worried your $1 listing won’t sell for the sky-high price you’re hoping for, you can always set a retainer that must be met before the deal can go through. Since buyers aren’t informed of what that minimum is, that leaves plenty of room for them to overshoot the mark.
And if you spot one of these $1 listings in the wild, making the winning offer will require your best negotiation skills. “You really want to look at comps [comparable properties] and understand the market,” DaSilva says.
“Ultimately, a home is worth what a buyer is willing to pay for it,” adds Pavlushkin—who is currently awaiting the outcome on that $1 mansion in Colts Neck. Anyone wanna guess what this home will ultimately go for? Send me your best guess, and I’ll reveal who came in closest once the deal has closed.