Market Conditions in York>Question Details

RGRDC, Both Buyer and Seller in York County, PA

Driving Prices Down? - Will Buy all Real Estate for Cash Offers

Asked by RGRDC, York County, PA Thu Apr 24, 2008

I am noticing more and more “vulture like” buying in my area. You cannot go anywhere in York County without seeing signs & billboards advertising “Cash for Your Home”, “Will Buy All Real Estate”…. You get the idea. Anyway I noticed a few homes in my neighborhood were sold to some of these investors. Obviously these homes were sold below market value and being “Flipped”.

The problem is that they show up as comparable sales when you do a MLS search. Currently my home is on the market and has had a very healthy amount of activity but no serious offers. We are not the most expensive house listed. It is the nicest home currently listed in my neighborhood so I am not worried.

* My question is do you think these “Prior Sales” are what causes some lower offers? Obviously when a bank does an appraisal and pulls up “comps”, all sales will show up even these “Flips”.

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BEST ANSWER
Sw
Good Question!
Shelley and Michael gave an excellent reply to your concerns, but I take a little issue with Trisha's anwswer "an agent or appraiser doing comps will not see it and/or use it." A good appraiser uses all recent sales, not just MLS records, and they were intimately acquainted with the courthouse records long before computer stats became available on-line.
Yes, if those properties were recent sales in your market area they can be used as 'comps'. because they too were sales that happened. Remember that MARKET VALUE is a record of what buyers will pay, and sellers will sell for at a given time and place, and cash sale sare a part of that.
Hope that helps.
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Web Reference: http://halere.com
0 votes Thank Flag Link Thu Apr 24, 2008
Sw
Your final premise is absolutely right. When a potential buyer is looking in 'x-y' price range, they are comparing what they see in your home to othres that are in that same range. Your best scenario is to have them look at your house and say 'this is the best out there for me."
I know a good, experienced agent in York-- let me know if you'd like a link.
Blessings to you as you make th e move.
1 vote Thank Flag Link Fri Apr 25, 2008
Sw,

Oh yes, all those investors. Fortunately most of them are now in a bind with properties they can not sell, therefore not showing up as sales and affecting the rest of us. In fact some of them are now becoming rent to own companies as they try to recollect their investment. Also the workmanship in these homes does not ever compare to owner occupied homes.

When buyers are out looking they typically limit themselves to a general area and more specifically a school district. I would take a look at all homes in your school district, not just those in your neighborhood. Take into consideration lot size, square footage, living space, bathrooms and the overall layout of your home compared to others. Also, who is the average buyer for a home in your community? Are they young families, or older couples? When working with younger families you will find their list includes a yard and a more entertaining layout. With older couples it is typically something with a smaller yard and "one floor living." Keep in mind that these are two extreme examples as there are all sorts of buyers out there.

When an appraisal is done they are taking a look at the most recent sales comparables. Most companies are only looking back within the last three months; some will still go six months. So any prior sale of a comparable property or those within your neighborhood will be used.

As for those low offers, most buyers after looking make an offer based on what else they have looked at and how it compares. It can be favorable if you are in fact the best home in your price range, but many buyers still are not paying full price for a home. The longer things sit on the market, the lower the prices go which means the home was not priced right from the beginning. If you can, I would ask your agent for all feedback from potential buyers so you have a clear idea of why they didn't choose your home.

I hope this helps,

Michael & Shelley Kefauver
*Good luck!
Web Reference: http://www.kefauverteam.com
1 vote Thank Flag Link Thu Apr 24, 2008
Sw,

I was also going to reply to Trisha's posting. Most of the appraisers I have had the pleasure of working with do use the tax records as well as MLS records. Therefore they are using all recent sales, not just those in the MLS. I also agree with Mim and I would like to reiterate that the price of your home is reflected in how much someone is willing to pay, not how much it is listed for. However with the activity it appears that you have done something right, but with no offers at some point it would be wise to lower your price; possibly at the two month mark or sooner if you really need to sell.

As for looking up prices of those investor "flips" it is actually very simple and that information is in our MLS system and also at your local courthouse. They have a record of all the recent sale information as well as the recorded deeds.

*Hope this helps too.

Shelley & Michael Kefauver
Web Reference: http://www.kefauverteam.com
0 votes Thank Flag Link Thu Apr 24, 2008
Thank you all for the information. I believe one of the homes did sell VIA the MLS system and I know the other did not which explains why it was more difficult to find how much the home sold for. So what I am hearing is that the appraisal will be done based on MLS sales and not courthouse sale records?

As for pricing a home, if you price the home right to begin with, it should sell closer to or at the asking price. I did not want to overprice our home like some people do. My theory is that if I priced it to high, that would limit the amount of people who find the home when they do an online search. (If someone ends their price search at “X” amount, a potential buyer may never see it if it is overpriced.)
0 votes Thank Flag Link Thu Apr 24, 2008
Were there "for sale" signs outside of the properties in you neighborhood before they were sold for cash? Usually the "cash people" will get calls from sellers who do not want to put their home on the market, they just want the property gone fast. In this case the property was never put in the mls system and an agent or appraiser doing comps will not see it and/or use it.
0 votes Thank Flag Link Thu Apr 24, 2008
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