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Playing Lowball

About 10 days ago the Washington Post featured an article called Playing Lowball: From the Reasonable to the Ridiculous, A Guide to Small Offers. Among the anecdotes in the piece was a bond trader disclosing a deep discount he achieved through negotiations at the Madrigal Lofts. I first saw this news on DCHousingPrices.com and later in a posting on PQLiving.

I do want to say upfront that The Triangle blog does not advocate one condo over another. Our knowledge and experiences will naturally tend to have a focus on the places we reside. As my screen name suggests I am resident at Madrigal Lofts. The aforementioned “Playing Lowball” WaPo article was of obvious interest to me as it relates to my recent purchase. However I did not want to rush to a reaction and pile on in an uninformed way. I wanted to take time to gather more information to gain a greater understanding of the situation.

My first goal was to understand what type of unit at Madrigal Lofts this deal was on and secondly review a large volume of local sales data to determine whether this sale was an exception or part of a macro trend. I’m going to table the specific Madrigal Lofts analysis for another post later in the week (Tuesday). Below I will discuss what I found when I tried to obtain a larger volume of sales data.

First I visited DCCondoPrices.com, a sister site of the blog DCHousingPrices.com, to review what data they had. The creator of DCCondoPrices.com uses data that is public record and applies it Google mashup style. Due to the lag in the public record data the most recent displayed sales are from February. Unfortunately 3 month old data is not current enough to answer our questions about the Playing Lowball WaPo article.

Searching for alternatives I came across Penn Quarter Residential which displays the 20 most recent sales in the Penn Quarter neighborhood (spanning 3/26-5/30). I contacted the blog owner to inquire whether similar data could be pulled for the Mount Vernon Triangle. Realtor, Jessica Wilke (www.jnwilkie.com) was very helpful and shared with me the recent MRIS results for our area.

Information from MRIS is deemed reliable but not guaranteed

The largest drop from list price to sales price among those 10 sales was < 5%. Several actually went for 5-10K over list price – but in these cases the increase was offset by a seller subsidy so it was a cashflow device.

I was underwhelmed by the volume of sales in the MRIS report. As it turns out when developers sell units in their buildings the sales are considered “For Sale by Owner” (FSBO). Properties of this type are not always entered into MRIS as listings or sales. Therefore using sales information in MRIS to analyze the condo market is more effective in mature neighborhoods that are experiencing re-sales as opposed to areas of predominantly new construction.

I’ve basically hit a dead end on getting a substantial volume of current new construction sales data to do macro analysis but I did learn something about MRIS. If anyone else has suggestions for another avenue to try please chime in.

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Comments

  1. 1

    fourthandeye says

    I’ll add that Madrigal Lofts does appear to be close to selling out. Typically the sales team only places one unit of each type on MRIS. Just enough to ensure that prospective buyers will find the property in their searches. They hold back the rest of the unsold properties to avoid incurring listing charges and the appearance of having substantial inventory left. However, once the building is near sold out it’s also common for all the units to be listed. Presently 11 units are on MRIS.

  2. 3

    Anonymous says

    I wasn’t able to find any recent sales for Madrigal Lofts in the DC Land records… seems to be a long lag time to get them online at least. The advantage to MRIS is that you can also see seller subsidies, not just sales price.

  3. 4

    boog says

    You can find all of the DC housing deeds on the DC Recorder of Deeds website:

    DC ROD

    A year ago, the deeds took about two months to get onto the website, but it looks like it only takes about a week behind now. This is the absolute best place to find out how much someone paid for their unit, assuming that you know either the name of the grantor/grantee or the lot/square of the unit.

    So, I just did a search for Matt Watson and downloaded his deed (costs $4). Apparently, he purchased unit #922 for $283,900 on May 15th. Not sure whether a parking spot was included or not, since the parking spots are not deeded. As a matter of fact, the parking spots for Madrigal owners are not deeded for anyone, which may be a mistake. What happens if there is ever a dispute amongst the current owners about how owns a parking spot?

    anyways, I hope this helps.

  4. 5

    fourthandeye says

    Thanks Boog!

    I had already known about the site Si referred to but unfortunately it does yet recognize the Madrigal Lofts address.

    However the DC Recorder of Deeds website is very current. Madrigal Lofts is Square 0528 Lot 0031. There is nothing that clearly labels which Sublot is which condo. But I was able to see that there had not been an avalanche of sales during May in the high 200s or low/mid 300s. Watson is the only sale in that range and I’m nearly certain that’s because he bought the Anerio floorplan which is basically a JR 1BR.

  5. 6

    fourthandeye says

    Anon 16:52

    You are right. The fact that MRIS provides the seller subsidy makes it a great tool for future buyers and their agents. As someone who already lives in the building, I’m not too concerned if the sales team brokers a deal that gives a new buyer much more subsidy than I received. I’d much prefer they use that tool than erode the $/sqft.

  6. 7

    si says

    ugh it stinks the recorder of deeds now charges for doc images. its public record!

    i checked the assessment record and you can dig for unit #s
    https://www.taxpayerservicecenter.com/RP_Search.jsp?search_type=Assessment

    just search square 0528 and all of the lots come up. when you click on the entries that have actual people names for Madrigal addresses (811 4th), you can see their unit #s (on the mailing address), sale date & price paid. then click “view property features” and you can see the sq footage.

    but they are ridiculously way behind…That office has many problems.