Home Selling in 07701>Question Details

Heather, Home Buyer in Red Bank, NJ

If your home does not compare to comps in neighborhood are they still valid?

Asked by Heather, Red Bank, NJ Tue Jan 20, 2009

My husband and I would like to put our house up on the market. The price quoted to us based on comps is quite a bit less than our bank who just reassessed our home ( Dec. 08) for an increase on our home equity loan and also the newly assessed priced by the town to determine our property tax. Should I have other realtors come and give me what their price would be or do all realtors use the same information? Thanks for your input.

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Comps are an integral part of all Realtors ability to correctly price a home in todays market. However, I have always been a huge believer in assessing value of a home individually because they are all different and each has their own pluses and minuses. Comps help but are not the be all and end all to pricing a home correctly for the market. Also proper and aggressive marketing to pinpoint your homes correct market audience is integral and an agent needs a strong marketing toolbox. I would be happy to review my marketing capabilities and the strength of correctly evaluating your homes market value. Please feel free to reach out to me. My office is in Red Bank. Thanks so much.
0 votes Thank Flag Link Thu Apr 29, 2010
I would have other Realtors come out and take a look at the home and give their opinion. Unfortunately, Real Estate is not an exact science. However, unless your home is extremely unique (no other home anywhere near it like it) an agent should be able to give you a pretty good range as far as what they think it will sell for. I wouldn't rely too heavily on the tax assessment unless the assessor comes inside your home and does a thorough viewing. This is not done in most areas. I wouldn't rely too heavily on the bank appraisal. They are just making sure that it is safe to lend you money for a certain amount. They are protecting themselves with an appraisal in case they would have to take the house back. It is good that it was higher than the price that you received (I'm guessing from an agent) with the comps because the banks are getting pretty conservative these days (at least in my area). In response to the heading on your post, the comps are still valid if your home isn't like any of the other comps in the neighborhood but the weight that they have isn't as great. I hope this makes sense. If not, just let me know.
0 votes Thank Flag Link Mon Jan 26, 2009
How important is pricing? What will the likely result be if you under price? What will the likely result be if you overprice? How will your choice in listing agent/broker impact your result?

A successful sale results from a combination of price and exposure. Be wary of the agent who tells you it is only about price. Be wary of the agent who tells you that you can market efficiently to generate a sales price high above market value. A property does need to be right priced in order to generate market attention. Marketing an overpriced will help sell the competition, not the house being marketed. The marketing dollars invested in the overpriced home will cause buyers to take note that the home down the street offers so much more for less money, because buyers will compare. Overpricing causes you to chase the market.

If a property is attractively priced, but poorly marketed, too few buyers have an opportunity. When several potential buyers see a property that is attractively priced, you can end up with multiple offers, even in this market. Absent a strong marketing campaign, the seller forfeit’s the benefit of the full impact of the potential buyers in the market place. Hence, the results for your property will hinge upon the combination of price and exposure. If your property is priced slightly under market value, but given maximum exposure to the market, the market will push the value up.

As a seller, you are at far greater risk of loss from overpricing than you are from under pricing.

The principles outlined here follow the basic marketing principles as taught in introductory marketing. All marketing brings together the three P’s: Product, Promotion (exposure) and Price. The Product is your property, and minor modifications can increase the likelihood of a contract sooner and for a better price. While location, style and structure are not easily changed, minor improvements in decluttering, staging and brightening can make your home more competitive.

It may be in your best interests to hear the proposals of a few prospective Realtors before making your final decision about listing your property. Review the proposal for pricing recommendation, marketing strategy (promotion/exposure), and presentation suggestions (staging, showing suggestions). When choosing your representative, you want to know that your choice will excel in all components of the marketing mix.

If you slightly under price your property, but it is marketed aggressively, and present a clean decluttered property, you will achieve a contract will with the highest and best price this market can deliver.

Deborah Madey - Broker
Peninsula Realty Group
Shrewsbury, NJ
732 530-6350
0 votes Thank Flag Link Thu Jan 22, 2009
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Dear Heather,

The three assessments you received on your home are all being used for different purposes. Your tax assessment is not directly associated with the market value of your home. The same is true of an assessment for loan purposes. If you hire a professional appraiser to provide an appraisal of your home, you will see that the price they provide will be more in line with your realtors estimate. Most realtors (and appraisers) will use comparable homes that sold in your area over the past 6 months (even less if enough comps are available). It is difficult to use "under contract" homes as you do not know what the accepted price was (and in this market, depending on the seller's situation, that number could vary greatly). When I run a comparable market analysis (CMA) on a home, I take the process a step further and run what is called a price adjusted CMA. This takes into account the condition of the home that sold, square footage of living space, size of property, location, and the date that the home went under contract (to adjust for the dropping market). I believe that this method provides a more accurate list price range. With high inventory in our area and the oncoming Spring surge, it is extremely important to start your home on the market at the right price. You will see the highest amount of traffic at your home during the first few weeks that it is for sale. If you don't price it accordingly, you will find yourself chasing the market down while your buyer traffic slows. As a result, months down the line you may end up accepting a price that is lower than what you would have gotten had you priced appropriately from the start. I have lived in the Red Bank area all my life, and I would be glad to provide you with an additional market analysis. Please feel free to contact me. I look forward to hearing from you.

Sincerely,

Patty Lipert
Heritage House Sotheby's Int'l Realty
Middletown, NJ
Web Reference: http://www.pattylipert.com
0 votes Thank Flag Link Thu Jan 22, 2009
Heather: A comp is a comparable sale or listing. A tax assessment is a blanket evaluation of all the homes in an area or town done for the specific purpose of levying taxes. An assessment should be done by a licensed assessor, based on the comps but also including adjustments for factors that may make the property more or less valuable than the comps.

Comps should not be more than six months old but what if no sale or listing take place in your neighborhood, or none of a similar style house? What may be used are older sales an area wider than the really relevant neighborhood, like properties in surrounding towns and you may as well throw in the kitchen sink as well, for as accurate as it will get.

On the other hand, when plenty of comps are available, one can "cherry pick" the results to produce high or low results. That approach won't really get you anywhere.

I have no idea why your comps vary so much from the other information but I've just mentioned some of the problems that may exist. There’s one thing you can do, and that is to get the Real Estate person you have talked to give you a more exact presentation, in their office or, if they have a laptop, in your home. Have them show you EVERY sale and listing of EVERY type and style home in your zip code for the last six months. YOU read the data, read the descriptions, read the Days on market and you decide what the asking price should be. If they fail to satisfy you, look around there are plenty of competitors out there.

Remember that marketing a house is not a scientific, calculated fact but a discovery of trends and what has happened to others selling homes in your area. In the final analysis, the only person who will tell you what your house is worth is the buyer who comes forth with an offer. Remember too that if one buyer will pay a high price for the house across the street, the other buyers may not be able to afford to come up with a similar offer for yours. You hope that one will but you can never be sure.

Try the market at one level, and then try it at a different level. Three years ago you could actually raise the price if you did not get an offer in the first six months, now it's a little different. Your Real Estate person should be experienced enough to work with you in your search to get as much as you can in the time that you want to spend getting it.

Good luck!
0 votes Thank Flag Link Tue Jan 20, 2009
Heather, you can certainly get other realtors' opinion, but make sure that he/she shows you how they get their comps. It has to be similar house to yours, sold within 3 months, and currently under contract. Even though, on the ones "under contract" agents will not tell at which price they agreed on, some will tell you the range. It would be even better if they've seen inside of other houses as compared to yours.
Good luck!
0 votes Thank Flag Link Tue Jan 20, 2009
Thanks for your question.

You have a very tricky one to answer. Based on what I read you had a home equity increase about a month ago. Now depending on how the lender rules were established they may have very different comparables then you neighborhood.

In your case I would recommend to get another opinion. It sounds like in the long run it is the only thing that you will be comfortable with.

When your looking at a new mortgage and need rates you can see them here at http://www.amerisave.com/partner/agrego

Tbanks
Tony
0 votes Thank Flag Link Tue Jan 20, 2009
Hi, Heather. Agents that are members of the multiple listing service all have access to the same information but may analyze it differently for the purpose of your market analysis. A market analysis is primarily based on closed sales, as is an assessment from the bank and appraisal. If your home is nonconforming to the neighborhood than the other homes still serve as a basis for price trends in your area. In that sense, they are valid. You should get another opinion if it makes you feel more comfortable but should not choose an agent to sell your home based on the price that they quote. You should look for an agent that is honest and that you feel will work hard to get you the best price the market can bear.

Tricia Schecher, ABR, CRS
Broker Sales Associate
Century 21 Schecher Realty
Eatontown, NJ
Web Reference: http://www.c21homesales.com
0 votes Thank Flag Link Tue Jan 20, 2009
Hi Heather, I recommend interviewing several agents always - you are evaluating the agents' abilities in market and pricing analyses, their marketing strategy/plan and your comfort level with working with them. I am always amazed when sellers just go with the first agent to come across their screen. By all means, interview another - you want to feel as comfortable as possible with every aspect of your real estate agent's marketing capabilities and proposal, and that includes their pricing analysis.

One thing to remember is this - there is something called "buying the business" that you should watch out for. I have lost business because of my honesty on the pricing front to the agent who essentially tells the seller what they want to hear. I caution you on this because the agent who brings you an honest assessment of pricing may be the very best agent for you, not the one you should cast aside. Fact is, the faster you sell your home the better you will likely do and you will sell you home quickly, only if it is priced correctly out of the gate.

You are here on Trulia, and so you clearly value the internet as a powerful marketing mechanism - which it is! Be sure to factor in the agents' internet savvy and commitment - it is so important today!

Good luck to you!

Best,
Jeannie Feenick
Search and connect at http://www.feenick.com
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Tue Jan 20, 2009
Hi Heather,

By all means get some more opinions. Realtors have widely divergent abilities when it comes to property valuation. Shockingly, there is little or no formal training, and most Realtors just go on their gut instinct.

See if you can locate a Realtor from your area who has some of the following qualifications:

1) Very experienced - like 15 years plus.

AND/OR

2) Also a licensed appraiser.

AND/OR

3) Is an active agent who lists properties for relocation companies. Relocation companies are very picky about who they utilize.

AND/OR
4) An agent who who also holds a broker's license. This guarantees at least a minimum level of competence/experience.


There is no point in getting another opinion that is not based on training, experience, or preferrably both.

Good luck!

-Marc

Marc Paolella
Relocation Director
Member, Worldwide ERC
Licensed Realtor NJ
Licensed Appraiser NJ & NY
Century 21 Joe Tekula Realtors
Agent of the Year 2008
Owner: Sands Appraisal Service, Inc.
Phone (direct): (973) 584-4235
web: http://www.marcpaolella.com
0 votes Thank Flag Link Tue Jan 20, 2009
Hi Heather,

Consulting other Realtors is an option but you should take in consideration that pricing is what makes a home sell faster. I advise my clients to if they feel so strong about their home value to list at their price and see for 2 weeks what kind of feedback we get. But remember another month that house does not sell is another mortgage payment that you have to make. Compute all of this in the equation and see for how long it makes sense for you to keep you home at a higher price.
Good luck.
Leonardo.
Web Reference: http://www.leonardoteam.com
0 votes Thank Flag Link Tue Jan 20, 2009
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