Home Selling in Austin>Question Details

Rob, Both Buyer and Seller in Buda, TX

In the state of Texas what is the current School of thought for pricing a house.

Asked by Rob, Buda, TX Thu Dec 25, 2008

Being that the Texas real estate market didn't spike like the rest of the country, how are prices being established in the Lone Star State, specifically Austin. How far off of the appraisal values are they selling? I have the opportunity to sell my house to a friend from out of state and I was hoping to avoid an agent and pass along the fees in the form of a discount towards the purchase.

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4
Hi Rob,

There is no magic number for calculating market value from tax appraised value. The price is between you and your buddy and will show up on the tax records for $10 and consideration like every purchase in Texas. Texas is a non-disclosure State in regards to price for privacy reasons. My advice on price is add the amount you want to make to the amount you owe. It is up to your buddy and his lender to figure out if it will work. Let the negotiations begin! The result is market price : )

As REALTORS, we do have access to 90% of solds entered into the multiple listing service. This is why our market analysis tend to be the most accurate of market value. However, now define accurate. Is it average comparable price in the last 3 months back, 6 months back, a year? All of this depends on the type of property and your area and will give you three different answers.

If your buddy is from Oklahoma or Ohio charge double!

Hook'em,

Greg
0 votes Thank Flag Link Mon Dec 29, 2008
Tax appraisals have often nothing to do with market values in my opinion. Often we see market values significantly higher than appraised values and sometimes significantly lower. Sometimes they can be right on. Why don't you allow him to apply for a loan and set up some kind of system to use the appraisal that comes back from the bank. If it is lower than what you expected perhaps you should have some kind of out, if it is higher than what he expected maybe he should have an out. A good board certified real estate attorney should be able to help you both draft some type of contract that would allow for the sale and the special provisions. Congratulations.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Fri Dec 26, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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Hi Rob,
First and foremost, you must understand that an appraisal is merely an opinion. If you are talking tax appraisal, you are better off asking my 2 year old daughter what your home should sell for. These values are gathered once a year and rarely reflect what your home is truly worth. If you are talking a lender's appraisal, then you are a little closer to the mark, but this is still only a justification that the home will likely recoup the loan amount in the event of default. It does not necessarily reflect actual market values and trends, though it may.

The best way to price your house in this market is aggressively. Compare the homes which have sold in your neighborhood of similar style and size. Place it somewhere in that mix.

If your home is better than recent comps, price at the top. If it is worse, price at the bottom. If it is average, price in the middle. What matters is how quickly you want to sell, and what your threshold for profit is.

Usually, when I do comps on a home for sale, I find a nice window based on the price per square feet. Usually, you can price your home somewhere in this window and get a good idea of relative market value. For instance, if 2000 square foot homes in your neighborhood are selling for $200,000, your average price per sqft is $100. There were probably some homes that sold for $90 per sqft ($180,000) and some that sold for $110 per sqft ($220,000). If you are looking for a quick sale, an aggressive price would be closer to that $90 mark. Or you could consider a more middle of the road route depending on your home's attributes and your comfort level. Somewhere in that $90-110 window would be a safe bet.

These are only example numbers, but you get the idea.

You are welcome to pursue this transaction on your own, but please beware that there are several risks involved in real estate that may expose you to liability. If you are selling the home and want to avoid a large fee, you could always consider retaining a seller's agent who represents only your interests and negotiate a lower fee. If the home is not listed in the MLS, the seller's agent is under no obligation to offer a buyer agent commission. If it is only a matter of drawing up a contract and ensuring that all processes are followed, you could get a nominal discount. This type of arrangement would serve to benefit you while keeping your costs low, but it would not entitle your friend to the same level of representation.

Step 1 is to get a CMA on your home. Any Realtor can do this for you and most will do it at no cost.

I have worked this type of deal in the past if you would like to speak further about it.

Good luck.
0 votes Thank Flag Link Thu Dec 25, 2008
GREAT QUESTION: home value would be based on comp / appraised value of property. Why would a seller sale property less than appraised value. YES friends due pass along realtors savings by discounting property, it is confirmed sale vs. listing home great option for you to move your life forward than owning a home you no longer intend occupy.

Real estate market has slowed due lending changing not many buyers no matter how low interest rate may go have money has a downpayment. If you can take a sure bet discount home too your friend. take the deal.

You still have comply as a seller per laws of State of Texas sale a property. If not your friend could sue you. If you have an agent pay a small % of fee handle transaction better safe than sorry. You would be covered under agents e & o insurance.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Thu Dec 25, 2008
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