Overpricing

There have been so many times I have heard of an agent going to a listing appointment and loosing out on the listing because another agent came in at a much higher list price than they did. These same listings then sit on the market for 70, 80, 90, over 100 days; have multiple price reductions; and either sell for the list price quoted by the other agents (if not under) or they do not sell at all – which, sadly, tends to be the case a majority of the time.

Properties that sit on the market for extended periods of time, due to overpricing, become stagnant. Buyers will either wonder what is wrong with the property or will play a “waiting game” to see how low the property will go and once it is listing for undervalue, will pounce on it and score a great deal.

It is SO important to price a property correctly (reflecting the type of market in play) because those first initial days on the market set the whole tone for getting a property sold. A listing will generally have more activity the first few days on the market, compared to a listing that has been on the market for more than 30-days.

If an agent does a Comparable Market Analysis (CMA) for you, really look at the comparable properties being used and the type of adjustments made – all which leads to the agent coming up with a “fair market value” for your property. Ask questions and to how that particular agent came up with their value.

Pricing your home accordingly, based upon the current market and other properties, is key successfully getting your property SOLD.

Home Buying: Appraisal

Home values are constantly in flux. Market values increase, decrease, or stabilize. These changes can happen daily, weekly, monthly, or over an extended period of time, based upon that particular market area. There can even be spots within the same city that are doing one of each, at the same time. Due to these changes, there is a need to determine current values for properties, which is why lenders hire appraisers when working on a new loan. The lenders want to be able to assess the risk of loaning a certain home.

To assist the lender in this decision, they hire an appraiser to “evaluate” the property. It is then up to the appraiser to come to an objective opinion of value – Uniform Residential Appraisal Report. The appraiser will select comparable properties and make adjustments based upon the condition and features of those homes. NOTE: The lender’s appraisal is not used to determine market value, it is used for the lender to verify the security for the amount of the loan.