If I list a home for $25K less than the appraised value, does it raise red flags with a buyer?

Asked by Jack Hannah, Fremont, CA Sun Jan 24, 2010

We live out of state, and frankly just want to get rid of our house in Plano. It's a beautiful home just under $300K range in great condition, and in a great custom neighborhood of Plano. But we don't live in Texas anymore, and rather than lose money every year (it's currently rented), we'd like to hedge our bets and sell it for about $25K under the appraised value. We fear it'll raise red flags with prospective buyers - but is there a way to list it for that price and maybe even find a buyer? Any help appreciated. Thanks!

Help the community by answering this question:

+ web reference
Web reference:


Patrick Thies, Agent, Anytown, IL
Sun Jan 24, 2010
What you need to compare the price to is what similar homes in that area are selling for. If the house is below the appraised value, but similar homes are selling at that price (the appraised value) then the appraised value doesn't matter. It's the price that simiar homes are selling at that matters. If most homes in the area are selling at the appraised value and you are $25K below that, then it could look like a good deal to a potential buyer.

If you are looking to sell quickly then price the home 1 or 2% below what homes in the area are selling for and below what your competition is listed at.

Buyers are looking for deals. If you price it too low below the competition then you could get low ball offers. Buyers may feel that you are trying to get rid of it. By pricing it just under the current competition but within the market value, then it gives you room should you get a low offer rather than putting it at a price already below the market and then get offers even lower.
3 votes
Dan Chase, Home Buyer, Texas City, TX
Sun Jan 24, 2010
It only raises red flags to buyers if posted something like

"Offered at $35k below 2007 assessment"

prices at different times from now are useless. You could even be high compared to todays market.
If it is based on current appraisals, buyers would go to your listing first. At least if your house was one they might like.
1 vote
Kim Nwachukwu, Agent, Irving, TX
Sun Jan 24, 2010
Jack, no, no and no! Not in today's economic climate. Listing it for $25K under is a smart move on your part, it shows you are motivated and ready to move the home. My marketing effort is exemplary and will get your home noticed, then beyond that it is the listing agents' job to let the buying public know WHY the home is listed at a discount. I say go for it, and I would be happy to discuss a full front assault marketing effort with you through my efforts with Ebby Halliday, REALTORS, the number 1 brokerage in North Texas. Best regards, Kim with Ebby at 214-695-3015.
1 vote
Nest Atlanta…, Agent, Atlanta, GA
Mon May 28, 2012
I think that Patrick said it best below....

Best of luck with the sale of your home!
0 votes
jo, , Hollywood Hills, Los Angeles, CA
Wed Sep 8, 2010
Your actually doing a wonderful thing...Putting a home up for sale below its market value will attract attention from other agents, who in turn will bring you buyers...If a few buyers start a bidding war, you will MOST likely get what its worth. Good luck :)

PS...the agents will see the condition of your house, thats nothing to worry about.
0 votes
Michael Russ…, , 75006
Wed Sep 8, 2010
I don't feel it's neccessary to "give" money away. Since your house is currently rented it may be slightly more difficult for buyers agents to show. Aside from condition and the ability of buyers to view it I wouldn't discount the price much. There won't be much of a red flag, just a likelihood of a multiple offer scenario where numerous buyers want your house. best of luck
0 votes
Shirley Shep…, Agent, Dallas, TX
Wed Sep 8, 2010
Before you talk price-- an agent would need to look at the condition of your home-- and then help you market your home
Price is a key in selling but it needs to be priced to help you get as much money as possible.
0 votes
Tamika Goree, Agent, Arlingon, TX
Tue Apr 6, 2010
Hi Jack,

Buyers are always on the hunt for a GREAT deal! If your home is listed for under the appraised value, you will definitely get interested buyers and/or Realtors to view your home.

I hope this helps!

Make it a Blessed Day!

Tamika Turner
Hendrickson Realty Group
Cell: (972) 697-1178
Fax: (682) 22-1049
Email: Info@NewHomesInDFW.net
Website: http://www.NewHomesInDFW.net
0 votes
Eric Egeland, Agent, Buffalo Grove, IL
Tue Apr 6, 2010

I agree with most of the other agent's responses.

-The county assessor value is generally way off base (at least in my local market), so that will not have any impact
-If you did an appraisal for yourself, that information is not public & often is not necessarily a true indication of market value.

A local agent with experience can guide you with true current market values.
0 votes
Rebekah Owen,…, Agent, San Jose, CA
Mon Feb 8, 2010
Hey Jack

The bay area home values are starting to ramp up - we have an office in Campbell as well - and DFW tends to lag that trend so, although prices are expected to increase - you probably won't see much appreciation his year.

That being said - do you need to think about capital gains? Did you live there 2 of the last 5 years? When's your lease up and would you consider selling to your tenants.

This is the kind of market that needs a little creative touch - think out side the box and you'll get it sold.

BTW Pricing is one way but there are BETTER ways to get your home sold and net you more cash in pocket.

Good Luck to you!

Rebekah Owen, MBA
Managing Broker
650-492-5958 214-257-0193
CA#00994952. TX#0555675

Skype Me at:Rebekah_o
0 votes
Ronda Allen, Agent, Plano, TX
Thu Jan 28, 2010
Buyers and agents in Plano are always on the lookout for a good value. We'd have to check the market value against the appraised value, and also see if the appraisal was independent or if you are referring to the Collin County tax appraisal value placed on the home. If your home is truly under it's market value, the house will likely have a dozen showings or more and an offer in the first week. Plano continues to be a very popular destination for home buyers looking in the North Dallas suburbs.

Have a blessed day!

Ronda Allen, Realtor and C.P.M.
CEO of comingsoonhomes.com
RE/MAX Dallas Suburbs
0 votes
Connie Wilda…, Agent, Long Beach, CA
Wed Jan 27, 2010
Buyer don't know the appraised price.. they only know what is on the market and what your competition is... and how you stack up to any all properties that are competing for your buyers... be aggressive, price to sell and get it sold... not just listed... stay on top of pricing... your best shot is the first month... always no matter where you live or what the market is doing... good luck
0 votes
Bruce Lynn, Agent, Coppell, TX
Mon Jan 25, 2010

Are you talking about the tax value or an appraisal done by a bank appraiser. If you are thinking about the tax appraisal, those are often way off. They can be way above or way below the actual market value. There are lots of people who don't understand that though....so sometimes they think they are getting a great deal just because they are buying below tax value. Buying at, below or above tax value is in no way an indicator of a great, good, or bad deal on either the buyer or seller side.

Surprisingly these days lots of buyers are very very in tune with values in specific neighborhoods. They know a good or bad deal when they see it. Sometimes it is also a function of the competition and what they've already seen at what prices. I personally don't think listing agressively hurts you in any way. In fact we often see that can generate great interest and multiple offers on a home. We just went through an experience about a month ago where a seller listed a great house about 5% under market. Five offers in the first 3 days on the market with 2 over the list price. That was at approximately $400,000. We also have another seller who has listed an average house about 5% over the market. Lots of people look, but the serious ones call to ask why the price is so high and would they take X....which is about 5% below market...then they never make the offer.
By the way if the home is currently rented, we find it best to sell once they are out. It is typically very very tough to sell with the tenant in the house for a variety of reasons. One is they typically don't want to move and find it an inconvenince to allow people inside. They rarely leave for showings which makes the buyers uncomfortable. They are rarely in show ready condition like a normal seller would have the home. They are also way to willing to share all the faults of the neighborhood, the owner, and the condition of the house with potential buyers, which often drives them away. So one idea you will want to consider is to get the tenant lease wrapped up, get them moved out, get the property back in show ready condition and then put it on the market.

Bruce Lynn
Keller Williams Realty
Web Reference:  http://www.teamlynn.com
0 votes
Amy Downs, Agent, Dallas, TX
Mon Jan 25, 2010

Why would you not try to get the most out of your home quickly by pricing it right?? I do not see any red flags, but some curiosity that may be made about "why".

Let me know if I can help get the marketing started for you to get it sold.

Your real estate resource,

Amy Downs, Realtor
Keller Williams Realty
Web Reference:  http://www.amydowns.com
0 votes
Andrea Brooks, Agent, Plano, TX
Sun Jan 24, 2010
Thanks for your question - it looks like you're getting plenty of feedback here! I've got a question for you though...Do you have an idea about what similar homes in the same neighborhood are selling for? I doubt they're going for $25k below appraisal, particularly at that price point. I think it's a far better idea to list your property for market value, particularly if it's in good condition and in a desireable area. I'd be happy to pull comps if you'd like more information about the sales history for that neighborhood. That way you'll see the price per square foot, days on market, and the percentage of list price to sold price. You can contact me at andrea.brooks@kw.com or direct at 469-450-1326.

Best regards,

Andrea Brooks

Brooks Team, Keller Williams
Web Reference:  http://BrooksTeam.com
0 votes
Ron Perry, Agent, Allen, TX
Sun Jan 24, 2010
Red flags?? Absolutely not! Sounds like you're an owner who is not intrested in "playing games" but totally focused on selling. When would you like to close? My 30+ yr career motto has always been, "call me--only if you're serious".

Ron Perry
Keller Williams Plano
0 votes
Denise Tower, Agent, Maryland Heights, MO
Sun Jan 24, 2010
Appraisal means nothing unless you are trying to get a loan and the value isn't there. Price it where you are comfortable and the buyers will come.
Web Reference:  http://www.denisetower.com
0 votes
T.E. & Naima…, Agent, Dallas, TX
Sun Jan 24, 2010
Hello Jack,

An informed buyer will know that the tax assessed value doesn't reflect the market value. It will show that you are motivated if anything.

I will be very happy to help you with the sale of the home. Please feel free to contact me.

Web Reference:  http://www.sumnerrealty.com
0 votes
Hello Sir,
If you're looking to sell it without a Realtor, then I would probably be your best person to lien on. I can't say that I have originated a loan that hasn't gone under contract ABOVE list price (at least in last 3 months, but that window is closing). Obviously my partners list competitively, but what I specialize in is coaching, training, and providing free marketing to Realtors. There wouldn't be any red flags, but the buyer's Lender may have a problem. For instance- 25k less than true market sales approach value, then you get 4 people competeting and all the sudden you're sudden your sales prices ends up 37k more than list. JP Morgan Chase and Bank of America will not originate that loan (for whoever buys it that is). I've yet to have an appraisal come in light because we have our own AMC, and it is located in Addison and we know the....wow.. just saw the 2010. lol... goodness.
Flag Wed Aug 27, 2014
Search Advice
Ask our community a question

Email me when…

Learn more