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Inman’s “Anatomy of a Deal” is an occasional feature that examines the twists and turns behind agents’ remarkable transactions. Read the most recent Anatomy of a Deal coverage here.
Moving property in LA’s luxury market isn’t what it used to be.
Higher mortgage rates coupled with the enactment of the ULA tax on properties priced $5 million or more, and general economic uncertainty, slowed transactions down significantly at the luxury level in LA in the last year.
That’s why, when a home asking $5.995 million gets six offers — with the winning bid at $705,000 above asking — it bears noticing.
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Agents Claire and Sam O’Connor of O’Connor Estates at Berkshire Hathaway HomeServices California Properties recently pulled off just such a deal and came away with some very happy clients in the process. Before the O’Connor sisters stepped in, the property at 9455 Lloydcrest Drive had sat on the market for nearly one year. However, after they listed it a second time around, it was pending within 15 days.
A remodel, strategic pricing, choice photos, an offer deadline and strong agent relationships helped the team of sisters succeed with what was once a tough sell.
A redesign and remodel
Sam and Claire O’Connor | Credit: Reid Anderson
O’Connor Estates represented design firm and developer House of Rolison and a team of investors who acquired the property at Lloydcrest Drive with the goal of flipping it.
Claire and Sam thought the five-bedroom, six-bathroom home presented the perfect opportunity for investment with an older design scheme and about 800 square feet of unpermitted space that, as of yet, had been untapped.
One of the biggest visible transformations was to the exterior of the home. Previously, the home was in a Dutch Colonial style. House of Rolison opted to add stucco to the exterior and Spanish tiles to give it a more Mediterranean look. But instead of going with the classic, clean white stucco, they opted to paint it a sleek black, which helped it to blend in with the surrounding scenery seamlessly.
“It’s something that’s different,” Claire O’Connor told Inman. “And with the orientation of the house, there are all these beautiful trees all around it. And with the color that they chose, it feels very hidden — like a hidden tree house.”
House of Rolison took over design of the interior as well, upgrading all finishes and reorganizing the layout, working with a staging team to give shape to the previously untapped square footage, which is currently undergoing approval to be used as an ADU since it includes space for a bathroom, closet and kitchen.
9455 Lloydcrest Drive | Credit: Nils Timm
Strategic pricing
When it came to pricing, the O’Connor sisters knew they had to get it just right with factors like higher mortgage rates and the ULA Tax already serving to dissuade consumers from jumping into the market.
One factor that worked in the sisters’ favor — through no action of their own — was the fact that the property is located so close in proximity to the City of Beverly Hills, while still technically located within the City of Los Angeles where the ULA Tax is enforced. Potential buyers who had been targeting Beverly Hills saw the property come up in their search, potentially not realizing that the seller in the transaction would be taxed an additional 4 percent. Of course, this would not impact the buyer initially, but would impact them in their own future sale of the property, hopefully years down the line, when they would incur the tax themselves.
In order for the sellers to break even with the tax, and for the property to still populate in searches on homes under $6 million, the O’Connor sisters, therefore, went with the aggressive pricing of $5.995 million, thinking it would just sneak in under that $6 million threshold.
“A lot of people are looking at Zillow and Redfin and they’re setting their own filters and some people are just doing it for fun, but a lot of really active buyers are looking that way as well,” Claire said. “And they’re getting emails from these services, so I think in pivoting to this type of market, it makes sense to price right under the price filters on those services. So we generally always do that and it’s worked well for us, and in this instance, the comps really supported the price.”
Credit: Nils Timm
Choice photos
Since nearly everyone browses real estate listings online these days before speaking to their agent, the O’Connor sisters were well-aware that making sure they had the best possible photos up online was crucial.
Claire had heard at an industry conference that leading a listing with an exterior twilight shot was linked to higher click-through rates than other types of photos by a significant margin, so the sisters thought they’d give the strategy a try.
“I think a lot of times, people think that an interior shot means the exterior is ugly or something because it’s so ubiquitous that people have the exterior shot as their first shot,” Claire said. “But it was definitely a really hard decision because the interior shots are so beautiful [too].”
The O’Connor sisters attribute the listing photos shot by Nils Timm as one of the reasons they saw over 100 people come through their open house the first weekend the home was listed and more than 10,000 views and saves of the property on Zillow.
Great photos, paired with pricing and design, also helped the property go viral when the sisters shared it on social media.
The O’Connor sisters shared the property with their roughly 25,000 Instagram followers in different posts that highlighted the different rooms of the home.
“We highlighted different rooms in each post, rather than something like, ‘Here are all the photos in one post,'” Sam O’Connor explained. “It was like, ‘Here are the outdoor spaces,’ ‘Here’s the kitchen,’ and it got a lot of engagement and reaction from people.”
After they held a brokers open, where they allowed other brokers to also shoot photos and videos of the property, the sisters started seeing the listing show up on other people’s social accounts too, which “was really cool to see.”
9455 Lloydcrest Drive | Credit: Nils Timm
An offer deadline
Once it became apparent that the sisters’ had garnered a fair amount of attention on Lloydcrest Drive — “As soon as we went live, both our phones started ringing off the hook,” Sam said — it seemed appropriate to consider a deadline for all best and final offers.
However, the slower pace of the market in recent months had heretofore largely eliminated offer deadlines from the equation.
“Initially, we were like, ‘I don’t know if we want to do an offer deadline,'” Sam said. “They always kind of scare us a little bit because people get flighty and they don’t want to compete. But we felt so confident after three days on the market that that’s what we were going to have to do.”
Because of demand, the sisters actually held a total of five open houses over the course of about a week-and-a-half and then decided to make the offer deadline for 11 days after the first open house, on a Monday evening.
They ended up receiving a total of six offers, five of which were all-cash.
Credit: Nils Timm
Agent experience and relationships
At a time when the value of buyer agents is being questioned, the O’Connor sisters noted that there was a palpable difference between buyers who showed up with experienced agents and those who showed up with agents who either didn’t have the chops or were taking the job less seriously.
“Buyers that work with really sophisticated agents, those were the ones that showed up and were really strong competitors,” Claire said. “Buyers who were working with weaker agents or a friend of a friend of a friend, or almost self-representing, they were wanting like $1 million off [the list price].”
Added Sam, “I find it really interesting in light of the NAR settlement — there is a difference in working with a strong buyer’s agent and a weak buyer’s agent. The people who were well-represented had a strong shot at actually getting the house that they want, and the people who weren’t were sort of in a fantasy world.”
The O’Connor sisters also saw a noticeable correlation between offer quality, agent experience and their interpersonal skills. The seasoned agents made a concerted effort to develop good rapport with Sam and Claire, and in doing so, they were better informed about the sellers and what would make a compelling offer.
“We know to have a strong agent in your corner is a plus, obviously,” Sam said. “But even with speaking with other agents that are representing their clients, I feel like there was a lot of respect with the good, seasoned agents we spoke with and a lot of very weird behaviors in the agents that didn’t do a good job of representing their clients … We represented [the listing] well, and then we had really good relationships with the top three contenders. And I think that was an everyone wins situation.”
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