Home Buying in 02917>Question Details

Helene Moret…, Home Buyer in 02917

smithfield ri, maket value versus list price. why would a home be listed 20 to 30 thousand dollars above market value?

Asked by Helene Moretti, 02917 Mon Jul 23, 2012

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Hi Juan, thank you for your question here. If it's in regards to this property on 3 Friendship Lane in Smithfield, I am the listing agent. The reason the Value/list price ratio seems so off is that it was a distressed property when purchased by the Seller. People who buy in that particular area, stay for a very long time. The seller has taken this home and renovated this property from top to bottom and added other amenities such as CA/CV, hardwoods, and a state of the art heating system to name a few. If you look in the lime Rock area where this home is being sold you'll notice that there are homes that have sold well above this asking price in the upper $400's and low $500's. The town has also not updated the assessed value. So, if you saw the home, the sq ft, and the lot/neighborhood you would see it was not easy to comp it out, I had to use the cost to build and finishes per sq ft adding and subtracting for things with those other solds to come to a Sales price. Unfortunate for the Seller, there are no comparable comps available, and too often agents weigh everything on that and that alone. So, we shall see what happens, he is ready to reduce the price but not because the value isn't there, it's just one of those properties that stands alone.
0 votes Thank Flag Link Thu Oct 17, 2013
Hi Helene, It is not standard practice to list a home above market price. The reason this occurs is because an agent will provide a Seller an opinion of value. He or she can't be 100% sure of what the market value truly is. The true value will be determined by what a Buyer is willing to pay and finally by a bank appraisal.

I do want to emphasize that in the South Florida market the asking price, in many cases is below what properties are ultimately selling for. This of course depends on the desirability of the property. A highly desirable property will generate more interest and probably multiple offers, which usually drive the property price up. I have experienced cases where the asking price is $20 to $30K below the final sale price (market value).

When interested in a particular property you should contact a licensed agent. An agent is really the only one that will be able to tell you, with some accuracy, whether or not the property is truly worth the asking price. Agents use experience and local values based on the most recent sales data to determine market value.

If you wish to discuss this further, please contact me at 786.302.0351 or email me at juan@insideMIAMIrealestate.com

Juan Sanchez – Broker Associate – Real Living FSR – Coral Gables, FL USA
0 votes Thank Flag Link Tue Sep 18, 2012
Just curious why you think it's priced $20k-$30k above market value? If you are referring to estimated values in Trulia, Zillow, or the tax assessor's database, those are all unreliable sources. Sometimes they may be correct. Other times they can be off by even larger margins than you mentioned above. A good agent will research comparable sold properties to help determine market value.
0 votes Thank Flag Link Tue Jul 24, 2012
Market value is the price that the highest bidder will pay. A savvy listing agent would always try to list a home at or below the full market price. So, if that home sells within weeks, you'll know that the list price is pretty close to the market price or value.

Of course sometimes, the homeowner may specifically request that the list price be far above what anyone would pay. It's a classic pricing mistake, but you'll see those mis-priced homes hang on the market for months.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Tue Jul 24, 2012
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