Do you adjust listings in the grid?

[KD247]

She (the wife) will exclude houses she wants because of the list price according to the MLS.....

I get it. Sorry I misinterpreted what you said, but it was right on the heels of a post that essentially said listings don't matter.

I agree with you. I always tell people, it doesn't cost anything to make an offer, and every incredible deal begins with a ridiculous offer.

Some friends of ours recently bought a house that previously sold in 2005 for $670k. They wouldn't even go to an open house because the foreclosure listing price, at $580k, was out of their price range. I talked them into making an offer at about $465k and the bank countered at $3,000 less than the $580k asking price. Eventually the bank dropped the asking price to $555k and then $525k. My friends then made an offer at $490k and it was accepted. Think about how many potential buyers were turned off by the high initial price.

At the same time, a smaller house was being offered through foreclosure at $409k, obviously looking for overbids. It sold in one week at $471k (which, if you consider the size difference, adjusts to a higher value than my friends' house), while my friends' house took over four months to sell. I think this is interesting because, if you figure holding and marketing costs, the overpricing strategy yielded 5% less than the underpricing strategy. And the underpriced listing was barely marketed. No open houses, no ads, broker didn't return calls, just an MLS listing with a fax number for offers only.

 

[ZZGAMAZZ]

retracted

retracted....

 

[Chris Colston]

George Ellerman,

You asked Prop whether he has time to do appraisals. Everytime he answers one of my posts on the Forum my credit card gets debited for $9.95. I always presumed that everybody on the Forum had the same arrangement with him???

Please tell us ALL that this is really a joke.

 

[Hamlet]

Well Gama I’ve never known PE to charge for his advice. He has always been helpful and kind when I’ve asked for his help. I find him to be a gentleman and a friend.

 

[CANative]

The $9.95 charge is necessary because he has to pay me my $6.95 for the answer.

 

[hastalavista]

The $9.95 charge is necessary because he has to pay me my $6.95 for the answer.

How much do you pay Sandy?

 

[Hamlet]

How much do you pay Sandy? :rof

 

[Mike Kennedy]

What a couple of authors say about the Principle of Substitution....


"The principle of substitution states that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable replacement property."

"The appraisal process relies heavily on the principle of substitution in developing an estimate of value. This principle holds that typical potential buyers in a marketplace usually are unwilling to pay more for a property than the cost of acquiring an equally desirable substitute property."

Except between 2002 and 2005 and other prior "shark-infested Greed Orgies".

 

[FuzzyFeet]

I am wondering if any of the state appraisal boards have taken a stand on this issue - mainly NV. Let me know if you know.

 

[Vermonter]

It can be done, isn't that what one does on a RELO appraisal.

Just wanted to clear that point, but I am on your side with this one PE. Forecasting involving the current listings, in order to support todays value for the subject... the data is just not firm enough to hang ones hat on.

Why try to "equate" the listings with the actual sales, just let it stand as a listing. When you do adjust, most readers will get the false sense of security the adjustment implies.

This is the part I don't get.....if you have data to support the adjustment for list vs closed price as of the effective date, why are you worried what will happen after that date?

Or are you saying that the listing is going to close in XX days past the effective date for $zzz,zzz?

For the record, only put a listing in the grid once at the request of a client, but adjusted everything necessary including the list to close $ percentage but gave it no weight in final opinion of value.