Oh I get it you don't believe me so get it appraised!
It should not be a big surprise that there are still home sellers who have not caught up with the market.
If you are a listing agent you might be asked why is my property not getting shown, or how come the price reduction didn't work?
The truth is, the market has shifted and is nothing like we were accustomed to just a few years ago. I really feel for home owners who need to sell, especially those who bought at the height of the market and now find themselves carrying a mortgage that is larger than what the home is worth.
With that being said, both sellers and agents have to pay attention to the trends in the existing market. So, here are a few situations to ponder.
- What if as a seller you just agreed to a price change but you still don't have any showings?
The market is liquid and it is not uncommon for your competitors to make even bigger cuts which would immediately put you at a disadvantage. This could mean you might have to cut even further.
- But my house is assessed at $380,000 why am I getting offers only in the $200,000's?
Just a few years ago it was not uncommon to see a house assessed at $200,000 selling for $400,000 and this made home sellers happy. That was a market called a Seller's Market, in other words more buyers and fewer properties. The well known rule of supply and demand dictates that a higher demand with a limited supply will result in higher prices. Today the scenario is so different. Very high inventory and few buyers makes this a Buyer's Market. In this case buyers want to spend less and get much more for their money.
- How come my neighbor's house sold for so much more than I am being offered although my home is larger?
Mr. Seller take a close look at the neighbor's property. Did you notice the nicely landscaped yard? And do you remember the large renovation project they did a year ago? Well, curb appeal and the condition of the home does matter. Do you remember the checklist of the things you were told you would need to do if you wanted to get more for your home? How much of that list has been completed?
- Please don't tell me what potential buyers have to say about my home. Despite what they have to say, I know my home is lovely and worth every dollar I am asking.
If potential buyers are saying similar things and making similar offers this is an indication that this is what the market will bear. Sorry, you really don't get to make this decision, buyers do.
So, you have the feedback, the offers, the comparative market analysis and you still disagree. Yes I get it you don't believe me. May I make one final suggestion? Get it appraised.
The appraisal will show you what your home is truly worth in this market, and what a bank will finance. The question is: Do you really want to sell your home or are you waiting for the market to come back? Keep in mind that it may be a long wait.
Jennifer Fivelsdal - JFIVE HOMES REALTY LLC - 845-758-6842- jennifer@jfivehomes.com
www.jfivehomes.com or www.midhudsonhomevalue.com
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Copyright © by Jennifer Fivelsdal, all rights reserved-Oh I get it you don't believe me so get it appraised!
Yes, Jennifer. It's going to get appraised anyway. Perhaps if they have the $400 for an appraisal it might be better spent on some upgrade. They should be give that choice and perhaps they will start to believe you.
You point hit the nail on the head! If they don't believe us, why call?
Great post. I wish clients would put more faith in us. But I guess with so many "part timers" and agents who are just out to make a quick buck, its no wonder clients have a hard time trusting agents.
A great post to hopefully help sellers understand the market more. I had a seller get an appraisal after I gave my price opinion on his property, the home was in the upper price range, the difference was 4 thousand dollars. We don't make this stuff up as we go along, we research and use comps that have sold.
Hi Jennifer, this is an excellent step by step explanation how the market dictates the price of the home and that it does change with conditions. I love the sound ECONOMICS within your post! I am just not that confident with many of the appraisers in our area that they would get the true and current value of the listed home. This is an excellent template for any listing agent to explain why the home is not selling, or for the consumer to better understand this market!
Hi Jennifer, You tell it like it is. This is why sellers hire a real estate agent so that they can sell their home, but then I'm not sure why sometimes they don't believe us when we tell them what they need to do.
Sure, get it appraised. Then they'll say the apprsaier doesn't know whar he/she is talking about. Then it comes down to your last question: Do you really want to sell your home??? Love your post!
Jennifer, I truly don't understand why a seller would put themselves through the stress of selling when it isn't a priority...but it happens too often!
Glen - good point.
Joan - that is a question I wished I had an answer to. Do you hire a doctor or lawyer and then ignore the advice? Yet ignoring their agent advice is done all the time although it might be the seller's largest asset
Good explanation without being confrontational on what can sometimes be a delicate subject with sellers. While they've lived there and built memories, it's a home. To the market, it's just another house -- and those two valuations can be very different.
LOL, okay, I used that line, and we did get it appraised and the appraisal was way lower than my price and even way way lower than what they wanted to list for.
It was a lakefront home.
My price $700k
Their price $910k
Appraisal price $600k
After all that-client asked me to list at $910k STILL. I said no thank you. Good luck.
Ed thank you.
Ryan it would be so nice. One reason is, sellers sometimes listen to friends and family member who try practicing with a license. They know how you should market the property or what the house should sell for based on less than factual information.
Diane that's for sure, the appraisers will be using the same sale data available to us.
Bruce thank you. It seem I achieved my goal of explaining how the market is.
Good advice Jennifer! Get it appraised and see for yourself...numbers don't lie. Buyers are so on top of home prices (thanks to to tools on the internet), they can't be fooled by an overpriced home, and they won't buy an overpriced home.
Congrat's on the feature.
Jennifer - The neighbor's house may have sold for more because it wasn't arms length, or was an anomaly. Your line is good hard talk to the seller.
Mary I am always puzzled by this type of an action.
Barbara you are so right, the appraiser will be considered incompetent too. A seller really need to determine the motivation or lack of for selling.
Laurie it sure happen more often than we would like to see.
John confrontational is not my style I try to be as tactful as possible, yet at the same time get the message across.
Mary I am always puzzled by this type of an action.
Barbara you are so right, the appraiser will be considered incompetent too. A seller really need to determine the motivation or lack of for selling.
Laurie it sure happen more often than we would like to see.
John confrontational is not my style I try to be as tactful as possible, yet at the same time get the message across.
There's no question that this is a rough time for many sellers who have "blinders on" and don't want to acknowledge the current market -- in many local markets. Daily there is a long list of new listings, an even longer list of price reductions and a much shorter list of "SOLDS". You offer good advise in trying to get the sellers to take the "blinders off".
Sue of Robin and Sue
Jennifer, Jennifer
Thanks for the powerful post. What sellers have to realize is we are still undergoing a paradigm shift and, to your point, the market is extremely fluid. All the more reason for sellers to take a hard look at neighborhood and general market trends. And yes, for the most part, the real estate data base used by agents is the same as that used by appraisers.
Two keys to success in this market is having accurate and timely information and agents who use it to be true advocates for their clients. Thank you Jennifer for your advocacy and wise advise.
Your post is right on target! I understand that it's hard for many sellers to wrap their minds around the fact that their home just isn't going to bring the price they hoped for. It can be a real shock when they are faced with the truth about what homes in the neighborhood have actually sold for. Of course, with all the talk in the media, I think the reality is starting to sink in.
Way to spell it out for sellers! We have Seller Markets and we have Buyer Markets. Sellers can not win all the time!
You should send this blog post as an email the next time you have a listing appointment so your sellers can read it before you arrive.
Jennifer, "get an appraisal" is an excellent idea especially for the Seller that is convinced that their house is the best house on the block therefore they should get more money than anyone else. An appraisal is a great eye opener, and now they will also see the limit that a Lender will lend up to.
That is an excellent idea and one that needs to be used more often. Although it could not be used for a mortgage approval, it would at least give you more credibility with your seller when trying to convince them of a realistic sales price.
How many sellers would actually put out the money for an appraisal? Not many, I'm sure. It's an excellent idea though.
But Jennifer...how about the seller who had their home appraised a few months ago for a refi and it was much higher? Good post for all to read!
Margaret
Some borrowers don't understand that what we do is not a HOBBY but a PROFESSION!
Love the post today, thank you for getting it out to us. It's a great post to get out to sellers/ I'm reblogging it ...now!
Patricia/Seacoast NH
Jennifer, congrats on the gold star! The seller in this cautionary tale makes me glad I work mostly with buyers!
Jennifer I am so glad you post was featured! This is such a great point. I posted something similar a while back and it is good to bring this to the attention of the AR community.
Jennifer,
It goes to show you that most sellers feel that the market has not affected them, until it's time to put the house on the market.
Then we get looked at funny because we tell them that their home has indeed been affected by that same market.
Good post, Jennifer. My problem, however, is that I have folks who get their home appraised and then wait three or four months to call me to list. Then they want to list at their OLD appraisal value. No matter what I show them about what's happened in the market in the last 3-4 months, they believe that appraisal value is set in stone. After all, that guy was an APPRAISER! I'm just a lowly real estate agent.
Jennifer, A well deserved feature and may I just say Amen! I so agree with everything you said.
Great points. Unfortunately, some sellers think they are an exception to the market. If it is early in the relationship it is better to walk away, however if you have had the client for a while and $ invested in ads it is harder to say goodby.
While I was reading this post I only had one thing on my mind. Appraisals. You and your seller can hire an appraiser of your choice and that is fine for a value but the buyer/lender has to follow HVCC. A total different story then. Or are you not experiencing that in your area?
I had a condo with an Ocean View. One appraisal no spike for the view. Another lender and another appraisal later a spike of $35K.
There is no rhyme or reason but a great post.
Everyone has a seller like this.
... boy I think this should be printed and mailed to about 75% of sellers out there right now !!!!
Nicely done Jennifer ! ... hope you are well over there in Rhinebeck :o)
When I do a CMA and they don't like I offer an independant appraisal. If he he comes in different than me by 5%, I offer to pay his fee. Never had to pay yet.
Well deserved feature Jennifer! Sometimes a new appraisal is the only thing that can convince a seller what hte value of their property is. Even then some folks just don't want to hear it.
Pre-appraisal, pre-inspection . . . anything that the sellers can do to get a clear picture of their home, the market, etc. is a good idea. Terry has a great remedy!
I think appraisals are a great idea for many sellers. I gues the benefit to doing so many short sales is that the sellers are generally not very concerned about price.
A suggestion I make up-front as an alternative at times...
Ya' know, when you see the little grimace happen at a suggested asking price?
Jennifer, thank you for the topic. Several good comments have come to the discussion.
My heart goes out to Mr & Mrs Homeowner--they have been robbed as sure as shoot'n. The irresponsible and unethical behavior of politicians is fleecing America--they get richer and more powerful while we struggle to hang onto our homes. If a burglar broke in your house and stole a $100,000 valuable, you could call the police and your insurance agent. You would have two shots at regaining you possession: insurance claim and/or the arrest of the thief. We know where the thieves are, but who will arrest them? "NOW IS THE TIME FOR ALL GOOD MEN TO COME TO THE AID OF THEIR COUNTRY."
I encourage my sellers to weigh the need to sell against other needs in their lives: I'm sitting on my property, confident values will rise; but not everyone is in that position. Real Estate remains the best investment most people possess.
Buyers will begin beating a path to our doors when they are confident prices have reached bottom [I think they are close]; and lenders will be forced to adjust their lending guidelines--they don't make money sitting on it. ATTITUDE has as much to do with market conditions as government regulations.
Work long and hard, but take time on election day to vote.
That is a great advice and proper for so many overpriced homes nowadays
Kim -Yes even with the appraisal some sellers still will not face reality.
Kath so true no way a buyers is going to overpay in today's market, and if a mortgage is involved no chance of that happening.
Wendy thank you, that do happen at times.
Sue you are so right, the inventory is growing, the price reduction too, and the sales are much fewer.
Patrick more than ever sellers have to pay attention the the market trends and make adjustments accordiingly.
Melanie I think some just won't get it. Speaking of media just yesterday the prediction was being made that price will be down another 6-7 percent, but as we know real estate is local.
Catherine I agree, sellers did have a long run and we all knew it would turn at some point, however not like this. Now even the foreclosure situation is being projected for a much longer period.
Tamara Now that I have this all written up I will use it at the appropriate time.
George now more than ever a pre-appraisal makes sense, less time will be spent adjusting down since the property will more likely be priced right from the start.
Rodney the appraisal is a tool which will help everyone to be on the same page.
Kathy you would be amazed, more sellers are doing this especially if they have a unique home, or no sales in the area.
Margaret great point, once the appraisal information is available it should be used immediately; waiting for several months would not work since the market is changing so quickly.
Mathew so true.
Patricia thanks for the re blog, glad the information is useful to many.
Pat thank you. Trust me I could write one for buyers :)
Joan thank you, if this could help one seller make the proper adjustment it was well worth it.
Melisa That is so true. No one has escaped this market.
Anns sellers have to act promptly when the appraisal is completed.
Oh, the resistance I get when I tell people to get a pre-appraisal. Penny wise and pound foolish.
Marchel thank you. A topic that so many can relate to.
Gordon Putting myself in the shoe of the seller I wonder how I would react? Yes the emotions can run high.
Ken this is true, but the valuation should not be so different. A problem could come about if one of the appraiser is not very familiar with the area.
Marchel thank you. A topic that so many can relate to.
Gordon Put\ting myself in the shoe of the seller I wonder how I would react? Yes the emotions can run high.
Ken this is true, but the valuation should not be so different. A problem could come about if one of the appraiser is not very familiar with the area.
Sheldon thank you. It would be nice if sellers who want to price their home step back and consider these points.
This is a great technique for educating recalcitrant sellers. Some people just don't get it even if you show them the facts. An appraiser can make our lives so much easier. I have offered to rebate half the cost of the appraisal at closing if they agree to price it at or below appraised value. That gives some additional incentive.
Terry great strategy.
Lori even after the appraisal some sellers will be in denial, however I think the majority of sellers will value the data from the report.
Carla I too like the way Terry handles the situation. An appraisal can be a valuable too.
Christine yes, appraisal is a great tool. Short sales though is a different category as you pointed out,
Brian it is always wise to give alternatives.
Boy, right down the list, these are the things I also hear in this market. Just reblogged!
Fred I do empathize with home sellers, and if they do need to sell an appraisal is a way to come up with the correct valuation when the advice of the agent is being ignored.
Fernando watching the price change list grow over the past six months I am sure with an appraisal the price points might have been different, and more properties would have been sold sooner.
Richard some things never chance; we can only win some.
Kathryn this market has been a shock to so many; it is even more important for us to educate our clients and provide them with alternatives.
Fred I do empathize with home sellers, and if they do need to sell an appraisal is a way to come up with the correct valuation when the advice of the agent is being ignored.
Fernando watching the price change list grow over the past six months I am sure with an appraisal the price points might have been different, and more properties would have been sold sooner.
Richard some things never chance; we can only win some.
Kathryn this market has been a shock to so many; it is even more important for us to educate our clients and provide them with alternatives.
Fred I do empathize with home sellers, and if they do need to sell an appraisal is a way to come up with the correct valuation when the advice of the agent is being ignored.
Fernando watching the price change list grow over the past six months I am sure with an appraisal the price points might have been different, and more properties would have been sold sooner.
Richard some things never chance; we can only win some.
Kathryn this market has been a shock to so many; it is even more important for us to educate our clients and provide them with alternatives.
It is certainly a shame, but it happens every day. As someone said, even the appraisal can come in lower...The bottom line is, if you don't price your hme correctly and you do not HAVE to sell right now. Don't waste your time, or the agents. It's heartache for everyone.
The appraisal in my opinion can sometimes be a little tricky too, because if it comes back higher than what people are willing to pay then the seller will hold onto that value in their mind and not agree to what the buyers market is willing to pay. But nonetheless its a third party to the deal that will give them as baseline of what the house will sell for in the eyes of a bank which ultimately will probably be a big deciding component of the transaction.
Hi Jennifer..Good post with real facts but, you say its a "buyers market" and I am not in total agreement of that statement, and I'm not beiing confrontational, just starting a conversation. :)
Here is a paragraph from a very recent post of mine..
"However, is it really a buyer's market? I keep hearing it's a buyer's market, and it may look as if it is so especially from a seller's perspective or from the media; Inventory is definitely high, but the demand (and in my point of view "demand" is what drives a buyer's market), is just feeling a bit flat. Buyers are more conservative due to the economy, anxiety over job loss, all this adds up to less buyers with the right stuff to bring it to the table and close, and rightly so."
We have wayy fewer buyers out there driviing the market...
Anyway, would love to hear back from you and anyone else with an opinion... :)
Oh, heres the link (no, not self-promotion...I actually have had many hits but no comments...) just curious to know if anyone see's it the same way...
http://activerain.com/blogsview/1743627/2010-reality-and-the-market-
Good post. Thanks. Even as a home inspector, I hear about a lot of sales that fall through because the appraisals come back much much lower....crazy market these days.
You hit the nail on the head with this post Jennifer! This blog should be required reading for every person who is considering putting their home on the market!
Jennifer, some sellers just don't want to believe the market value of their home. The appraisal is a great response. Thanks.
Jennifer - Truer words couldn't be spoken. I wish I could send this to most of my sellers... They sometimes just dont and wont get it.... Great post and a well deserved Gold Star.. Hope you are well.
Mr. & Mrs. Seller, you're home is only worth what someone is willing to pay for it...Good post...Enjoy the day
Jennifer - As the market has declined I've turned down several listings due to unrealistic seller's. Although they always find an agent to list their home, most are still active to this day and those that did sell ended up selling for less than I originally told them due to the declining market. Getting the home appraised is always a great option for those stuck in 2005.
Not to worry. Most homeowners are too cheap to pay for a real appraisal of their property thus the "free" CMA. The owner most likely got a "special" invitation by a credit company to give an appraisal to tap into their home equity if they sign up for the major credit card offer. Move on to the next client. They will soon be buried in debt.
In California, the assessed values have nothing to do with the market price. Someone who purchased at the peak will have a value considerably lower than the assessors price. Getting an appraisal will just confirm that as would any good CMA.
On the other hand, I had a situation recently in which the assessor had the wrong values for the home's size. As a result, the assessor valuation was over 10% lower than the true value of the home. Having an appraiser come in and provide accurate dimensions gave the seller the ammo to ask for a higher price on the home. As a result, they did very well compared to others in the area.
Jennifer Sellers fail to realize an assessment is made to generate tax revenue - has nothing to do with market value
Hi Jennifer..
I've turned down quite a few listings lately for this reason. I try to explain to them, of course we can list your property for a million dollars.. and maybe even find someone dumb enough to offer you a million dollars.. but, we're not just looking for one dumb buyer.. we'll need a dumb appraiser from the mortgage company willing to lend someone a million dollars. (...maybe a few years ago huh?? lol)'
I strongly agree with you. If you don't believe us, hire an appraiser. Of course you can find another agent who will list your property for whatever price you want for little or no commission.. But the house will sit on the market until it expires, eventually making your property unsaleable. I've seen some properties showing over 800 days on the market! ... If a potential buyer, or even in some cases an agent, would look at that.. they would automatically assume "something must be wrong with it" and skip right over it.
Seller.. Ask your agent for a list of similar SOLD properties in your area. Not just what's for sale. SOLD will tell you what a buyer is actually willing to pay for your type of property.
Great post Jennifer. I agree with you 110%
Have a wonderful weekend... and refer them! LOL
Vienna
Margaret brought up a good point - appraisals for refi are always higher, but sellers don't understand the difference between them and an appraisal done for a sale - maybe there shouldn't be a difference!
Sure, get it appraised; BUT also realize that appraisals are based on sold prices (and are, by their very nature, maybe out of date when the market is falling). MS Seller: Please also look at my active comps to check out your competition. If houses somewhat like yours still have not sold after 120 days on market, though they are priced $50k below yours, we need to do something to make yours a better deal. What do you suppose that something is going to be?
Jennifer, no doubt! an independent appraisal can be a great response to the reluctant seller or buyer. Properly handled, it can bring the parties together. BUT like a sharp butcher knife in the hands of an inexperienced and/or uninformed party [including many agents], it can become the proverbial dagger!!!
My earlier response was out of concern for sellers who are NOT ready to sell, and DON'T have to sell. I respect their remorse, and figure everyone would be better off if they took their property off the market. It would reduce the clutter caused by an apparent excessive number of homes on the market. To say it another way: DON'T LIST YOUR HOME UNLESS YOU ARE SERIOUS ABOUT SELLING.
On the other side of the issue, to buyers: "DON'T WASTE THE TIME of SELLERS, REALTORS®, nor YOUR TIME IF YOU ARE NOT SERIOUS ABOUT BUYING A HOME. NOW IS NOT THE TIME TO play homebuyer. NO REALTOR® should be playing chauffer for un-qualified, un-prepared and un-certain buyers. All REALTORS® want to help home buyers find their home, but sellers insulted by rediculous offers and inquiries are less focused on the REAL DEAL.
We must work harder to provide our clients with the full picture: everyone needs to have a realistic understanding of the current value of the subject property as well as the best comps. Lets not get caught up in the scenario seen in the TV commercials where the actor says, "I'm not a doctor, but I play one on TV." That was funny when we first heard it, but it is not when (1) a friend/neighbor thinks they are an agent or appraiser; (2) the seller/buyer thinks he/she are the expert; or (3) an agent goes off half-cocked. Let each of us declare: I'M NOT AN APPRAISER. I'M NOT A HOME INSPECTOR. BUT I AM A REALTOR®."
I had a similar situation, Jennifer. I valued the home at $245,000 and suggested they offer it at $250,000. The sellers thought it was worth more. So they paid for an independent appraisal, which came in at $249,000. We listed it for $250,000 and sold it... for $250,000! (Funny how the current market conditions influence a home's value.)
I say the true value of any house is what someone is willing to pay for it! Great discussion and post. Thanks
We seem to be in the second year of a recovery here. Many homes are now getting multiple offers again with selling prices above the listing price.