365 Days on Market, and then an Above-Market sale

Here's a recent example:

6848 MELLODORA DR, Orangevale, CA 95662


List Date: 05/31/07

List Price: $245,000



MLS status is now "inactive"; zillow shows a sale for $255,000.



I am hard-pressed to believe that the market value was anything near $245k. Yet now it has sold for more than asking price; surely there was some cash, renovation money, or exceptional closing cost assistance kicked back.



With a price in the mid-200s, the buyer could take out an FHA 203k loan for remodeling. Most closing costs in this market are typically paid by the seller. Nehemiah type down payment "assistance" are supposed to be gifts - if the selling price is raised by the amount of the downpayment assistance, it is not a gift. And the property tax in California is determined by the selling price - a buyer saves money by minimizing the selling price, thus minimizing property taxes for as long as they own the property. So a reasonably intelligent buyer would roll closing costs into the loan rather than the purchase price. In other words, there aren't many reasonable explanations for paying more than asking price on a home, except cash-back-at-close or horrible credit.



Buyer beware. Ask your agent to specify exactly what concessions are included in the selling price of comparables.