June Labarre, Home Buyer in 283 Oakhurst Place,...

I am trying to decide what my house is worth. I have had two appraisals one for $900,000 and one

Asked by June Labarre, 283 Oakhurst Place, Menlo Park Wed May 21, 2008

for$1,000,000.

Realtors in Menlo Park say that we are holding our own. The truth is that there are few sellers and few buyers. Everyone is waiting.

I need to make a decision to either buy out my husband and risk the exposure of additional dept or sell by June 2009.

Does anyone have any pearls of wisdom?

Confused

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Answers

9
wow- where to start with that one.
The difference between someone who's been an agent for a number of years, and one who's been an agent since 01 is pretty astounding.

First and formost.
Appraisals are opinions of value. However to say the appraiser's opinion is worthless - is - flat out stupid.
Tell you what, when your buyer comes back and says "my lender won't give me a loan because the appraisal came in way under the selling price...." Tell the bank "appraiser's are worthless anyways - give him the loan".

see what the bank says.

As for putting it on the market for 850 and trying to start a bidding war. HAHAhahahahahaahaa
Given the fact that there are few buyers and sellers and your market is flat right now -
You will attract two types of buyers:
1) someone who sees a million dollar home on the market for 850 and sees an investment opportunity.
2) someone who cannot afford a million dollar home, but will stretch themselves to 850 to get in one.

In either case - when you start jackin up the price - both parties will very quickly get wise to the plan, and will very quickly lose interest.
Where does that leave you? THat leaves you with a million dollar home on the market for 850 - with very little interest. You can hope to get lucky and sucker somebody in, but chances are word is going to get around that you're just trying to lure people in. Good luck with that.

Now what do y ou do? You're going to raise your price to a reasonable level? or take a bath and sell it under market value when somebody comes along?

Following that strategy is not sound advice for selling your home. It is sound advice for getting yourself into a world of hassle and headache the likes of which I doubt any sane person wants to find themselves in - especailly given the current situation you have described.
4 votes Thank Flag Link Wed May 21, 2008
June,

When you say you have an appraisal, I presume that you are using the term as it was intended. That is, you have 2 appraisals from licensed appraisers, not some other source.

If that is the case, given the dollars we are talking are large, I suggest you get a third appraiser to do a desk review of the 2 appraisals. The review appraiser will provide you with an unbiased reconciliation of why the 2 appraisals are so different. Let the first 2 appraisers know you are going to have a desk review done after you've hired the review appraiser and that you are going to be expecting them to provide input once the reconciliation is complete.

Sounds like you have a reason to consider buying out your husband, is this due to a divorce situation? If so, your divorce attorney should have suggested the above. It's very typical in these kinds of situations. It's also exactly what the lending industry and the relocation industry do when they get 2 appraisals that are more than 5% different than each other, you have 10%+.

The desk review will be done to USPAP guidelines (Uniform Standards of Professional Appraisal Practice), and will be defensible in court if necessary. You'll likely get some changes to the first 2 appraisals, if the review appraiser finds obvious discrepancies or mistakes.

Hope this was helpful,

Jeffrey
2 votes Thank Flag Link Wed May 21, 2008
Myke's right, it is a sticky situation, but one for which there's probably not one dead right answer. Ask five different people their opinions on the value of the home, and chances are good you'll get five different answers. So many variables come into play: the street your home is on, the condition, amount of upgrades, current inventory in that price range, recent sales in your neighborhood, etc. Zillow.com, popular among many consumers, is a decent starting point, but so many other factors will affect the true value of the home, including the ability of buyers in that market segment to get loans (especially in today's tougher mortgage landscape). The value is ultimately determined by what the market thinks it's worth, regardless of what you need for it, what you owe on it, or what it's insured for. As a seller, you control the price you ask, the condition of the property, and access to the property. Unfortunately you can't control market conditions, the motivation of your competition (other homes for sale), and buyer perception of value.
2 votes Thank Flag Link Wed May 21, 2008
it's tricky - especailly in a market that's just sort of flat.
Appraisals are only one part of the puzzle.

From the sound of things - it's going to be a sticky situation regardless of what you do.
1 vote Thank Flag Link Wed May 21, 2008
Hi June,
I have been asked advice about this very subject from two separate families recently, though not in Menlo Park. There is appraisal value and market value. Reputable appraisers who know your market should be pretty close on the number. However, if the appraiser was hired by a lender for getting a loan to purchase your husband out, then the appraiser is looking at value from the lender's perspective, not necessarily true market value. True market value is best understood by the real estate professional because they are the ones who see the insides of every house and know the real meaning behind "updated", "fixer", "views", etc. You may not be getting the full picture from just MLS sales prices. Some agents don't state if credits were given off the sales price (example - for closing costs) which would reduce value. Since the two reports you received are $100K off each other, I would ask each appraiser what comparables they used to arrive at their respective values. Once you have that information, ask a trusted local Realtor who knows your neighborhood well for their opinion. My interpretation of "holding our own" from Menlo Park Realtors is that values have not dropped significantly. I certainly would advise discussing your situation with a local expert before you write a check or sign loan docs. I personally know and would recommend Kevin Boer, Arn Cenedella, Joe Parsons, and Pooneh Fouladi to understand your market very well. Ask them for the hard data and you will gain greater understanding of where your home fits into your local market. They can show you sales volume and numbers of transactions so that you can see for yourself how fewer buyers and sellers there are compared to other years. Best of luck in your decision.
Web Reference: http://mariansbennett.com
0 votes Thank Flag Link Fri Jun 6, 2008
June:

I am very confident of the long term prospects for our local market. Oakhurst is located in Suburban Park a very desirable entry level Menlo Park neighborhood. My sense is that market will continue to be flat but may upturn in 6 to 12 months.

I would ask a few questions:

Moving forward:
Where do you want to live? If it is Menlo Park, I would try to hold onto your existing house.
Are you going to be financially comfortable buying your husband out? If so, then holding on to your house makes sense to me.

No one can predict the future.

What does your gut tell you to do?
What does your heart tell you to do?

I typically counsel my clients to forget about trying to outguess the market. When personal or financial factors tell you to buy or sell, that's when you do it. And you deal with the market as it exists at the time you want to make a change.

Arn
0 votes Thank Flag Link Tue Jun 3, 2008
Hi June, I would recommend you get two BPO's (broker price opinion) completed which will give you an accurate value of your property at this point in time. What the BPO should include are CMA's for active & sold properties in your area and a 3 tier price analysis low, medium & high. If you are serious about selling your home, think about the medium to low price range keeping in mind, we are still in a declining market. If you are not serious about selling and would like to test the market then use the high price range. If you need a BPO provider in your area please contact me and I'll be happy to help you.
0 votes Thank Flag Link Wed May 21, 2008
Appraisal are opinions of value. Opinions differ.\
Buyers set prices. The golden rule applies.
The appraiser is not buying the house, the appriaser's opinon is worthless.

1. Make the house look "beautiful". Stage it.
2. Put it on the market at $849,000 (Discuss this number with your agent). Have your agent state in the MLS that you will respond to all offer with a multiple counter in 3 weeks.
3. You are running a low speed auction.
4. The price should generate a huge volume of activity. And multiple offers.
5. Multiple counter all offers. Set your terms & condition & ask for more money.
6. Look at the replies (more counter offers). Some people who made offer will drop out.
7. Counter aaginn, asking for more money.
8. Repeat 6 & 7 until you are comfortable with the strongest buyer (not highest, strongest, most down payment, best credit, etc...), as you want the highest probability to close.

Please remember, prices are set by ready, willing and able buyers. No one else.\

Good luck.
0 votes Thank Flag Link Wed May 21, 2008
Tough call, what are the agents telling you. You could list it higher and see what happens. If you don't get a lot of activity you can always lower it. Just don't wait to long to do that.
Web Reference: http://GetPrequalified.com
0 votes Thank Flag Link Wed May 21, 2008
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