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California-j…, Other/Just Looking in Moreno Valley, CA

FORECLOSURE AND PRICING QUESTION ABOUT FORECLOSURES AND HOW THEY ARE PRICED.

Asked by California-jewel, Moreno Valley, CA Sat Dec 5, 2009

Saw a home before it was in foreclosure, for $400,000 now that this same home in the same condition is priced at $687,000 please explain why this price has jumped so high, who puts the pricing on these foreclosed homes, nice area but the home and its condition is surely not worth this high price. It did not sell at $400,000 what makes anyone think that it will sell for $687000. Thanks

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Setting the listing price is an art not a science. As we go through aour daily work we see pricing all over the board, too high and too low. Sometimes there is strategy involved but many time it really appears that there is very little market knowledge.
If you are a buyer it is important to work with an agent that follows the market closely or you need to do it yourself. By that I mean looking at what the sale prices are no the asking prices.
0 votes Thank Flag Link Sun Dec 6, 2009
Jed Lane; Fog…, Real Estate Pro in San Francisco, CA
MVP'08
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Hi there California Looking. Great Question. I see this every day. Everyhome is differnet and has a different set of financial aspects to ot. With ragards to big diffferences in price, it could be for a variety of reasons.
If you ley me know which property you are referreing to I can help get you more accurate information. Many Banks and liding agents have their own Idea of market value. The latest comps and the apprasal value are a more accurate source to determine market value. Its all subjective.

If you would like to get some accurate comps and data please feel free to drop me a line

Kind Regards
Michael Barron
Realtor/MBA
First Team Real Estate
0 votes Thank Flag Link Sat Dec 5, 2009
Hi California jewel,

Many times there is not much sense to how the listing agents come up with the prices. It doesn't really matter what the listed price is anyway. The reason is that there are far more buyers than there are sellers. Some homes are over priced but many are under priced so each one has to be looked at carefully. By reviewing the recently SOLD similar homes in the area and the current market conditions we can get a pretty good idea of what a home will appraise for. What it will sell for is appraised value and in many cases nowadays - plus 5% or more.

So if you see a home that according to recent data is over priced don't be afraid to make a fair offer. If you see one that is under priced you need to ignore the asking price and offer what it's worth and plus some if it's in good condition and/or in a highly desirable neighborhood. If you don't, many other home buyers will.

Under pricing a home is an annoying but effective way of getting multiple offers. Only the very best offer will get accepted and all the others will be out searching again. In Riverside and Moreno Valley areas it is not uncommon to have at least 3 offers the first day and as much as 70 by the end of the week.

The type of listing makes no differance on how much the home will sale for. Rrather it's a short sale, REO, or standard sale. It's worth whatever it's worth and that's what it will sell for regardless of list price. All the sellers and banks are looking at the same comparables that we are. They know what it's worth. There is no magic, just marketing techniques or sellers who really don't want to sell their homes... yet.

Now if you are interested in a seriously flawed property - you may still be able to find a pretty good deal. Maybe.

If you let me know which home you are referring to I am happy to look up the history and see if the current price makes any sense or not.

Linda Christopher, Realtor
951-780-7225
0 votes Thank Flag Link Sat Dec 5, 2009
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