Well before anyone step into this kind of path, let think, is this going to be another kind of SCAM? Buying at one price and listing into 50% low, can we do this? – just a thought,
P.S: These days many kind of previous practices turned as SCAMs and now investigations started on those practises
I was posting more or less tongue and cheek, because frankly I don't think you have to worry about such a plan, it won't work from two angles.
1) listing one home even at 50% is going to make one iota of difference with nearby comps. Simple supply/demand and market conditions. If you list a home where street value is $1m for $500k, you'll generate a lot of demand. In a "normal" listing, this would end up in a bidding war, ultimately settling at a fair market value (or slightly below or above) ,which wouldn't be anywhere near $500k. If you never sell and never counter everyone will no you're pretty much not a serious seller and move on. Further, if this was done by an actual listing agent, I'm wondering if there would be ethical consequences (don't know).
2)Even it this plan were to work, what do you do with the home you bought pooled together? I mean, this plan's basis is on a group of you buying a home at market value and intentionally listing at a loss, with the hope that that will cause enough shock and awe to lower comps in this area. Well, if your 50% off listing is successful in knocking the value of homes down 50%, you effectively knock of 50% of your pooled home's value itself. So how do you plan on recouping that loss?
I don't know about the rest of you, but when I buy a stock, I don't intentionally try to take a loss by buying market price and try to sell it 1/2 price with the hope that my ridiculous price can actually move the market price of the stock, and that I can buy more shares at the firesale price of 50% and still come out ahead overall.
You *might* be able recoup this loss on the pooled home by an additonal 10-11 homes are the firesale price with the hope that in 10-15years, appreciation of those 10-11 homes will offset the first one you sold. But, that requires lots of financial capital and the ability to sit there for 10-15 years,which no offense if you folks are just talking about pooling resources to buy 1 home, I doubt applies here. If you had access access to several hundred millions, maybe you can play this game.
So frankly, it seems that for most of us without the financial capital to be a "market maker", we just have to wait until the market themselves dictate a lower price.
