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Sellers Who Determine Asking Prices

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Joined
Jan 16, 2002
Here I am reviewing work file getting ready to write report and notice the following listing history:

Owner listed property 11/17/02 @ $429,900 with XYZ RE.
Listing expired 2/17/03 with 93 days on market.

Owner relists with ABC RE on 2/24/03 @ $379,900 and listing expires 5/25/03 with 77 days on market.

Owner decides to list again this time with a third agent
on 5/30/03 for $369,900 with the following in bold print
"Owner Needs Fast Sale !" - 27 days later it goes to
contract for $362,000

All 3 listings were in MLS (which has 1800 agents/brokers).

Duh....I guess he finally figured it out by the third attempt.

Do ya think he'll be slightly annoyed if it doesn't appraise ? :lol:
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Why shouldn't it appraise? After all someone wrote a contract on it and we all know that buyers are well informed. :rofl:
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
That is called walking the price down to meet the market.

Actually, this could be a very smart seller.

Case in point: Suppose in the first listing an interested buyer comes along, the buyers wife likes the property and the seller lets it be known that he needs a sale fast. So the buyer shoots a $400,000 cash offer. Out of pure hardship of course, the seller accepts the $400,000 cash offer. Now he is sitting at the closing table with the proceeds from this $400,000 cash sale instead of from a $362,000 (the seller of course has a smile on his face) and we appraisers now have ourselves a brand new certifiable $400,000 comp.

I don't think that was a bad attempt if he had the time to spend on it.

Oh yes, and in the case of the cash offer, no appraisal was necessary to screw up the deal.
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Joe, ....Annoyed ?, like in, if it appraises for $340K and not $362K ? The series and sequencing of linked, or over-lapping, or next-day-new listings on the same property is quite evident in my market. Even, the same listing agent being part of that string of listings from the very start many months before when they legitimately could say that was Day #1 of the true public exposure of the property with the intent to "sell". I feel quite compelled to research such a listing history for a comparable used, as quite often the agent posts "17 DOM" for the (last) listing you see which lead to the actual closed sale......only to see that they started 3 lists ago, and 7+ months ago, for an initial offering price $30K higher. Safe to assume that any progressive price DROPS along the way are NOT following any upgrades and enhancements to aid in capturing a buyer. Same house, same condition as on Day #1, simply and finally gets a contract when the price reaches the tolerances of a willing buyer. I will mention the full tally of DOM (not those 17 days on the last listing) and even the %-of-original-list price which the closed-price represents......and call agent to see if that price is hiding even further concessions to make the deal fly. Concessions are very frequent in my market area. There is definite "stigma" about being able to present a "new" listing.....and portraying a short term of DOM in the summary of the sale after closing.....and I really wonder if that agent ever feels bad (embarrassed) about saying "17 DOM" when it really was (let's say) 209 DOM once that reality is revealed. What's the big deal about covering that up ? Of course, 3 different consecutive lists with 3 different agents takes my pet-peeve away somewhat, but not the facts away from what was the full market exposure time. Perhaps that is the best way to assure an agent of getting new first-time listings from prospective sellers. Whoever shows low DOM's on their advertising flyers (relating to those addresses sold) gets the business.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I always loved being the second or third REALTOR® because by the time I get the listing the seller is more realistic and usually more movitated because they have used up a lot of time. At least the appraiser will know what the property is NOT worth :rofl: :rofl: :rofl:
 

Kelly S

Junior Member
Joined
Apr 25, 2003
Professional Status
Certified Residential Appraiser
State
California
Reminds me of a house one street over from me. Now, they've done A LOT of remodelling, but their original LP was $689k. From my estimates, I think $575 would be TOP around here.

I snuck into the open house and the Realtor looked brand new - she's had an open house every weekend. Fast forward THREE months (in the crazy L.A. market that's ridiculous - a couple of weeks is considered long) and the price is down to $649k and ticking.

I can't wait to see what it appraises for - maybe someone will come along with a big bag of cash and I'll have a great comp for my own home!
 

TONY B

Freshman Member
Joined
Jan 16, 2002
I have a great one for you.
buyer purchases the home for $147,000 in 2000 in Levittown, L.I., does an unbelievable renovation making it look like a new construction in Florida (hip roofs and all) lists it for $729,000. Top in area is low to mid $400's. I'm praying I don't get that order! :blink:
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I read this with interest. I had my home on the market a couple of years ago and it never sold. I tried looking at comps but there were not any really comparable to mine. And ad in owner prejudice :mrgreen:

Well this week I had a verbal offer without them even looking at the house. 3 days latter I have a contract on it at my asking price. Buyer wanted it bad. I was concerned because I felt I had overpriced it just to leave some room for negotiating.

Then I found out buyer has sold his house and is going to have an LTV of about 50%. I LOVE IT! Just really curious as to what it will appraise for though. It's hard to be open minded about your own house.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Jeff:

Just another case of FOtCT Syndrome... put it in your file as a near perfect example!

(Feet on the Coffee Table) where the prosepective owners want a near perfect house which you have kindly provided for them and are willing to pay a significant premium for the privilige of moving their couch and coffee table into the front room and flooping onto the couch, no further work needed.

There seems to be an increasing amount of this happening all over.

Call it a lifestyle committment: the PERCEPTION of all the free time folks are going to save in the first few years of ownership before the honey-do list (maintainace issues) catch up with them as they probably did in their last home. Granted it avoids the mess of dealing with contractors... In your case it was probably a wise purchase ont eh buyers part: they got more than skin deep! However when the perception of "well maintained" is actually limited to the top layer of paint and flowers freshly planted from the local home center.... that gloss will wear fast!

Will be interesting to see whether this trend will sustain a rise in interest!
 
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