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Ruthless, Other/Just Looking in 60558

Value of an appraisal when the house has been on the market

Asked by Ruthless, 60558 Wed Aug 1, 2007

If a house is only worth what someone is willing to pay, once the house is on the market, is an appraiser going to be un-bias? We're desperate and have dropped the price by almost 15%. It's only been on the market for 2 months and similar houses are selling for our original asking price and higher.

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I'm sorry to hear your predicament Ruth, many people are going through similar difficulties right now but luckily it sounds like your neighborhood is highly sought after, which is great for your home's selling potential.

I agree with Irina and Keith that an appraisal may be unnecessary, but if you feel the need to further verify your property's value then by all means obtain an appraisal from a certified appraiser. Buyers always like to see more information about a home than less, we all do.

However, from another perspective, you may want to be honest with potential buyers why you are so desperate to sell the house. Studies have shown that buyers better react to explanations for promotions or discounts--they react better to the word "because." For example, the study shows that more buyers will visit and buy from a store posting signs saying: "30% off because we can't afford our rent this month" rather than a store posting signs just saying "30% off." The verbage on your website looks great and I think mentioning why you are selling at such a discount may help. Buyers will be less apt to think there is something wrong with the property and instead will understand why you are trying to sell so quickly. Even if this doesn't produce a buyer, the least it will do is increase interest in the property.

Hopefully this plus all the other great suggestions provided here will help you sell your home in no time. Good luck Ruth!
Web Reference: http://www.simpluxe.com
1 vote Thank Flag Link Wed Aug 1, 2007
First of all, did you drop in to look at those homes that are selling for your asking price or higher. What did they look like compared to yours ? Be objective. Were they more appealing for some reason ? Is there something you could do to make your home more attractive?

Please step aside and think objectively with me for a moment. BUYERS BUY WHAT THEY SEE.......NOT WHAT COULD BE !!!

Ask about staging your home. I was in a home today that sported a very very very PINK nursery. WOW did the walls jump out at you,

I suggested the owner paint the nursery walls a more muted color. The answer ? We like this color, we chose the color ourselves and if buyers want another color, let them buy the house and paint this room !!!

People, it's not about your taste in colors........you are entitled to your taste....IT"S ABOUT DOING WHAT IS NECESSARY TO SELL THIS HOUSE., If buyers don't share your taste in colors ....they will move on the house down the street and buy it.

Ask your agent to stage a broker / agent open house......Ask if you can be there your self ......ask the agents attending......why they think the home hasn't sold. Don't take the ansers personally......they will be trying to help you.

Good Luck !
1 vote Thank Flag Link Wed Aug 1, 2007
Ruth -
I know this is not much consolation but GREAT WEBSITE ! REALY TELLS THE STORY !

http://www.brickbungalows.com
0 votes Thank Flag Link Thu Aug 2, 2007
Ruth,
With the listings I had in the past, we would only lower the price the first two months. If that didn't get more buyers to look, we would offer to assist with closing costs or pay for a one year home protection. In this market you need to have an agent that can come up with many different things to do besides just lowering the price. Staging may help. Offer to cover two or three months mortgage. Offer to buy them a BBQ. Maybe a short trip. As far as the appraisal goes, I have used some in the past to assist in the sale of the property by posting a copy of it in the home for everyone to see.
Good luck.
0 votes Thank Flag Link Thu Aug 2, 2007
Ellen, what an interesting study!

Keith said, "Most buyers purchase based on their budget. Part of it is emotion...but a lender doesn't lend money on emotion. "

That is part of my problem. The price of the house is equivalent to homes with almost HALF of the tax bill. So if someone can only afford up to our asking price, they can't afford it because the taxes push them over. The monthly difference is over $500. Because the house is so much larger than houses in this price range, they also have higher utility bills.

The emotion part is that someone who can afford a million dollar home, wants to be able to say that the own a million dollar home, not an $800,000 home. Here is a very interesting article:
http://www.nytimes.com/2007/07/11/business/11leonhardt.html?…

I have been inside many of the homes that have sold or are under contract. The house has been at the current price for two weeks and only one showing. Prior to that, we got only one showing at each of our 3 different prices.

All REALTORS and home owner:
I pulled up stats on sold and under contract homes (in my market), and only ONE home out of 13 homes sold as the result of a price change. I no longer have access to that same information but of the 21 homes that are currently under contract, one home has a market time from listing to contract of 184 days and all the others average 19 days from new to under contract. The official DOM for the past 6 months is 151 from listing to close.

So, sorry if I disagree with all the age old agent advice of reducing the price. I agree it has to be priced right in the first place and that your first offer is usually your best offer. But "If it hasn't sold, reduce the price" is getting a little old of an answer for me.

I'm sorry, I am stressed and out of answers. I sincerely appreciate everyones advice. It's just that sometimes I think the NAR is brainwashing all of their Realtors.
Ruth
0 votes Thank Flag Link Thu Aug 2, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
Ruth,
If you get a certified appraiser, you will get a good appraisal. It sounds like you are stressed and I can't blame you. While I am not sure you really need an appraisal, if you are wanting to use it as a tool, it couldn't hurt. You have received some good strategy suggestions. There are many incentives you can offer to a buyer to sweeten the deal. You may want to offer to pay a percentage of closing costs. At any rate, I wish you luck.
Web Reference: http://carriecrowell.com
0 votes Thank Flag Link Thu Aug 2, 2007
Ruth
I am sorry to hear about your situation. A couple of key points:
What is the purpose of the appraisal?
Generally appraisers use recently closed sales to support their value estimate. I have no stats on your local market, so let's say in general it's either flat or going down a little bit. The tightened lending guidelines alone are enough to put pressure on home values because it reduces the pool of buyers qualified to purchase a home in your price range.

If the market is moving, the problem with using closed sales is they actually went into escrow 45-90days PRIOR to closing, and were probably on the market 60-120 before that, so they are not an indicator of CURRENT or market value.

The important principle is that appraisals are supposed to protect the institution that's lending the money, so are normally conservative.

Ruth, I looked at your home and it appears to be well prepared for sale. As has been suggested, looking at properties that have sold, that you perceived as comparable, should be examined closely. Normally putting yourself in the shoes of the buyer is the best way to obtain a clear picture of value.

Have you physically been inside the homes with which you are competing?

Lastly, there is a difference between list price and sale price.If your circumstances are indeed dire, then dramatic measures are needed to make your home stand out.

At the risk of being repetitive:
1. Take it off the market for a week
2. Take new photos
3. Change the listing price 10% below where it is now.

Our broker just did this (in an area that is an extreme buyer's market), the listing sold with multiple offers in two weeks with no contingencies at the price they thought it was worth (10% more than the lowered list price).

If you have not got time, then you need to lower the price, and/or increase the value to the buyer. Most buyers purchase based on their budget. Part of it is emotion...but a lender doesn't lend money on emotion. It might be worth looking into some assistance with financing to buy down the monthly mortgage payment for the first three years or so.

I read a great article in the Wall Street Journal I'd be happy to send you that has some great ideas of what sellers can do to make their home more attractive to buyers.

Best of luck to you.
0 votes Thank Flag Link Wed Aug 1, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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Hi Ruth,

I agree with Robert, if you are thinking of getting an appraisal, then make sure that you obtain one from a certified appraiser.

Having said that, I'd have to wonder why you would need this type of proof to show buyers that you are selling at a significant discount. Buyers are out there looking at homes daily. They are very astute. If the home is truly priced at a discount, an appraiser will not be necessary. It will not make a buyer buy your home.

Just make sure that it is truly priced well (which most likely it is) and ensure that it shows very, very well. Buyers buy on emotion. The price will bring them in and the condition and the staging of the home will keep them there.

Good luck in the sale of your home!
0 votes Thank Flag Link Wed Aug 1, 2007
With homes in the price range you mention, I always recommend to the seller that they obtain an appraisal from a certified appraiser. That should give you the proof you need for the buyers.

Good Luck !
0 votes Thank Flag Link Wed Aug 1, 2007
The house had been completely renovated and partially staged. Our area doesn't use sq ft in the listing and all of the homes the same size as mine are priced at $1.2 mil or higher. Many of the over $1 mil homes haven't even had improvements such as air conditioning but have some rich original qualities that ours does not. Our house started at $925,000 which was realistic and the homes that have sold in that price are similar to ours. Our house is now priced at $799,900 and the homes in that price range are more than 1000 sq ft smaller and still not as improved as ours.

I've done my homework. I just want proof for a buyer or advertising that I'm selling at a discount because I'm desperate. However, when I asked an agent for a new CMA, they used unrealistic comps just to justify my lower price even though more higher priced homes have sold since they did a CMA in March before the renovations were finished.
0 votes Thank Flag Link Wed Aug 1, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
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