Monday, August 8, 2011

Really??

Recently, while I was away on vacation, someone in my neighborhood, listed their home for sale with another agent for 199,900. This home is clearly priced 52,000 dollars more than any other home in the neighborhood and based on it's size and age, should sell for right around what a recent listing of mine (a perfect ten, just a primo beauty of a home) sold for in the subdivision, 120,000. That listing of mine took only 40 days to sell, based on the fact it's averaging 157 days to sell a home in my neighborhood and it appraised for 121,500, 1500 dollars over the sales price, which is very, very good!

So with this in mind, it's time again for a little lesson in what happens when you price your home and put it on the market for sale. You get an offer down the road. That offer includes a mortgage the buyer has to take out from a bank or mortgage company, in order to purchase the home. That bank or mortgage company then sends someone out called an appraiser, to appraise the property's value, based entirely on recent sales prices in the neighborhood. That appraiser comes up with the homes value and turns their findings over to the bank or mortgage company.

So if the house is priced at 199,900 and the buyer wrote an offer for 180,000 and the seller accepted it, you then hope that the appraiser accepts it. In the case of my neighborhood in Troy, the appraiser would more than likely appraise the property for about 120,000. That's a difference of 60,000 between the sales price offered and the appraised value of the home. That also means, the buyer now must way overpay for the home, by coming up with that 60,000 dollar difference out of pocket, or the deal is off, unless of course, the seller is willing to lower their sites just a bit and accept the appraised value of 120,000.

And so it goes and it's always gonee that way, frankly! Price your home to sell when you put it on the market. Look at the comparable properties your real estate agent presents to you. If you way, way, way overprice your home, it will just sit there for month after month and will not sell! The house will eventually get word spread that the "houses is not selling because there's something wrong with it" and thus buyers and their agents will stay away in droves!! Buyers, with good buyers agents, will stay away in droves anyway, knowing the house is way, way, way overpriced!