A man owns a 2,500 square foot home in a well established subdivision. He wants to sell. He had the home appraised 6 months ago for $450,000. He calls me and tells me he wants to list his house. I do a market analysis, pull comps, and tell him his home should be priced at $395,000.
He has a fit.
I explain there are 22 other homes in his neighborhood of the same floor plan all currently for sale. The highest priced is $415,000, the lowest is $370,000. In the past six months, 8 homes of the same floor plan have sold. The lowest for $362,000, the highest for $412,000. The average days on market for his neighborhood is 131.
He has a fit. He tells me that he looked his house up on Zillow and it shows $465,000. I try to calmly explain to him that he might want to ask Zillow if they are willing to buy his house for that price. He has another fit (I might have had that coming). He then explains to me that he has spoken to 2 other agents, both of whom will list his house for over $425,000. He tells me he will not be using me because I do not know what I am talking about and hangs up the phone.
This all occurred a little over 4 months ago.
Fast forward to yesterday...
Angry guy calls me. He is still angry but not at me. He tells me he listed his house with one of the other agents for $430,000 and it did not sell. Wasn't even shown once during the 4 months it was for sale. He is furious that the agent did not do more for him.
I calmly explain that the home is (was) over priced and with so many other homes in the neighborhood priced correctly, there was little incentive for an agent to show his. He asks me what price I think he needs to be at to sell in 30 days. I tell him $370,000.
He has a fit.
I try to explain to him that even if he could find someone to pay the $425,000 he desires, he will never get it appraised for that much. Also in this market, a buyer is not going to be willing to come up with the cash to make up the difference. Twelve of the twenty-two homes which were listed when we originally spoke had sold. The average selling price was $372,000.
He said he would think about it.
Had he priced his home correctly from the start, there is a good chance it would have sold. The moral is this...if you are planning to sell, be extremely realistic about pricing. If your real estate agent tells you a lower price then you hoped for, know that the agent is probably doing their best to get your house sold.
If your home was appraised for a certain amount then shouldnt that be the price it will sell for? Why would it appraise for motre then it is worth.
Posted by: Tony | July 10, 2007 at 06:12 AM