Take Care and good luck.
In determining the value of the home, an agent or an appraiser, takes into consideration the physical condition of the home, the number of bedrooms, baths and other amenities (such as garage, lot size, view, etc.). They then compare your home with other similar homes in the same or similar neighborhoods. Just averaging the sales price of homes in the neighborhood will throw your numbers way off. A single level home compared with a mid-entry (as an example) is comparing apples to oranges just as comparing a 1200 square foot home with a 2500 square foot home would be inappropriate.
Your list price should be based on the most comparable sales in the area. If you are not a distressed property, try not to used distressed homes (short sales and bank owned) as comparables. If they are all that's available, consider their condition compared to yours as well as the level of market activity in the area. I tell my buyers the only reason to consider waiting out a short sale is if you can get a great deal on it. If you are not a short sale, you should be priced higher than the recently closed short sales.
One other note, consider your active competition when pricing. You want to attract the potential buyers away from them if possible.
Finally, I hope you are getting the advice of a great local agent/broker. Pricing is one of the 4 keys to selling quickly and for top dollar. You can do the others fine, but if you price wrong, you'll miss out. I did a blog post on these 4 keys you can read at the attached link. It takes a great pro to hit all 4 well and will result in a higher net in your pocket if done right.
Good luck to you in any case,
Isaac Real Estate Team
Champions Real Estate Services
TriStar Finance #MLO-107799
Office: 425-483-6849 Cell: 206-841-9976
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I am a Real Estate Broker that lives in Lake Stevens and specializes in Snohomish County real estate. The bank orders an appraisal and the appraiser attempts to find enough apple to apple comparables to determine the fair market value of a home. The good news is that the bank owned homes are fewer and fewer and their values have been going up along with homes that do not have third party liens. I don't know of any Lake Stevens neighborhoods that have a huge number of distressed properties anymore, which is great news. The bigger problem appraisers are having is keeping up with the rising values when they are determining the risk of a particular loan. If there are not many comparables due to the low inventory and a home gets multiple bids, which is common right now, then it is possible that the home will sell for quite a bit over fair market value. This is the trend I am seeing in our region at the present time.
In contrast, some areas have few short sale listings, and there you can practically ignore them. That said, a couple of years ago I did see an appraiser use two or three short sales as comps in Newcastle, which he probably had to search out because that area had very few distressed properties. Even so, the house appraised for the contract price.
Finally I would note that some banks are not pricing their REOs low at all now, at least in some parts of King County. Sometimes they are even priced higher than what a normal listing would be, and I heard one REO agent say sometimes they are getting that price. So if a REO listing is priced low, it very well may be due to the condition of the property and not just the fact that it's an REO.
It is important to know which bank will be ordering the appraisal. Those who complete dozens of home sales a year can list what different lenders will impose on the appraiser when they begin the process.
It is criticly important that a homeowner be proactive and does not become a victim in this process. There are preventive measures and/or resources to addrss the situation.
If you 'think' you're going to get clobbered and the buyer is using a Too Big To Care Bank, you will...)get clobbered).
But you don't have to.