when a house selling lower than the market value!

[Nader Maramkhah]

I am wondering when a house (its value is about 300k) listed for a price that is a lot (20-30k) lower than the market value, what sort of action we, as an appraiser, should take in writing the report.

:new_smile-l:

 

[bart nathan]

This happend to me last week. Just give your opinion of what it is worth.
The only thing might want to do is talk to the listing agent or the buyers agent and ask why it is selling below market value. They might have a answer and they might not. Just be extra observant when doing your inspection.

 

[aussie ken]

Comments

I am wondering when a house (its value is about 300k) listed for a price that is a lot (20-30k) lower than the market value, what sort of action we, as an appraiser, should take in writing the report.

:new_smile-l:

"The subject property has been under-sold by the listing real estate agents. Our assessment of value and attached supporting sales evidence clearly indicates this to be excellant buying at $270K"

 

[Chris Colston]

Lots of reasons....estate sale, needs a quick sale due to a move, preforeclosure, divorce, might not really be an arms length transaction...so on and so on. Are you sure this isn't a "distressed" sale? You could ask the agents involved. Ken's answer is a good one, too.

 

[Pamela Crowley (Florida)]

Have you checked it against what is actively listed? How does it compare there?

 

[Jungle Boy]

All good answers.
Are you being pressured by the LO to come in low ?

 

[Webbed Feet]

Mr. Maramkhah,

I personally would not start asking questions of sellers and listing agents regarding why it is selling below market value.... The reason is that the act of so doing is expressing an opinion of value to someone other than your client...If you indicate "greater than contract price" you just gave an oral appraisal report... Refer back to USPAP confidentiality and oral reporting.. Also, telling a listing agent they might have egg on their face sometimes can result in a backfire... At most I may inquire with the selling agent (without discussing my value conclusion in any way) if the buyer is related or if some aspect of not being arms-length was known... However I would think several times about it before even making that call regarding a subject during a sale... A comparable yes, but not normally a subject unless I was picking up same last names between seller and buyer or language on a MLS listing such as "seller very motivated!"

Take the time to show you read the sales contract and discuss what you know about the transaction and compare it to your final conclusion as best you can. If your answer is "I cannot explain this. All indications are this is a low sale." .. then that is your answer.

Barry Dayton

 

[Nader Maramkhah]

No I am not.

But, don't you think if I talk to agent or anyone except my client (who wouldn't have any clue), that would be crossing the line. (USPAP: Ethic rules: Confidentiality)

What I am asking, why sometimes UWs want me to state the property is selling under market value, don't they see it, that my value is higher than contract price in the report. Are they lazy or st....d, or there is something that I don't know. I would like to find out.

 

[Nader Maramkhah]

Mr. Dayton,

I think we were posting our replies at the same time.

Yes, I agree. But please read my previous post too, thanks.

 

[Hal Mann]

I certainly agree that it wouldn't be wise to ask the agent such a question (how come it sold so far off of MV?), but there wouldn't be anything wrong with simply inquiring of the agent or buyer what may have gone into the decision leading to the agreed-upon contract price (without revealing anything about one's value conclusions).