If I have a property that was just appraised for $159,900, and I call a realtor to list it for me, should the realtor list it for higher, lower, or the same as the appraised value? If higher or lower, what should the initial price be? That is, what’s typical?
Depends on the purpose for which you had it appraised. For refinancing? For sale? For property taxes? A Realtor® should be able to offer advice on this, and actual prepare his/her own appraisal based on comps. There are a lot of variables to give you a firm answer without a lot more information. Talk to two or three Realtors® and see which one makes the most sense.
Your real estate broker should know what the common practice is in your area.
Tell your broker what you realistically want, then a listing price could be suggested.
It’s pretty common that buyers expect to pay less than the original list price, like many car buyers expect to pay less than the sticker price.
A “real” appraisal, as opposed to what’s merely an estimate of value, reviews the assets (and liabilities) of the property, identifies what comparable properties in the same general area have recently sold for, adjusts their prices to reflect the differences between them, and arrives at a fair market value for the specific property.
A typical assessment will simply say, “Well, this property was valued at $95,000 five years ago, single family houses in the area have sold for about 20% more than what the five-year-old assessment had them valued at, and the rebuilding of the porch added $5,000 to the value, so it’s now worth $119,000.” This totally ignores location, who did or didn’t do what, the impact of neighboring properties, and a whole bunch of other variables.
Typically, too, a listing will have an asking price a bit higher than fair market value, the profit motive being what it is. This provides room for negotiation.
Ask to see similar properties that have sold in your neighborhood in the past six months. Compare them with your property. Ignore any estate and/or foreclosure sales.
Listing a property for a lot more than it could possibly sell for, simply to get the listing and reduce the price at a later date, is known in the business as “buying a listing.” It’s frowned upon.
Also list it for a bit more than you really want. For example, if you have a piece of property that you want $50,000 for, list it for $60,000. If someone gets it for $55,000 or even $52,000 you’ll both be happy.
Yeah, what she said. A comparative market survey may sound like a gimmick, but it is a very good indicator of what one could reasonably expect one’s house to sell for. You just have to make sure that the houses and LOCATION are comparable.
This is because every area is different, some markets have houses selling way over the appraisal, with multiple buyers trying to outbid each other. Other market areas, however, even in today’s market, are flat or even soft, and the house could sell for less than the appraisal. There are so many variables in this it isn’t funny.
Check your area.
Around here houses typically go for at least 5% over list price, at least based on those real estate flyers everybody gets 3 times a week urging them to sell.
I’m not sure why it sounds like a gimmick. You want to know what your X will sell for, you should survey the market to see what things similar to X are selling for right now. People do this on eBay, and for selling/buying cars, it’s really very basic.
You only really care what actual buyers are willing to pay for your house, not what a professional appraiser thinks its worth. You get that from comparables. Generally, you list for a bit higher than you expect to sell it for, so you have negotiating room. You can list for a bit lower if you want to sell fast. As mentioned, though, there are vast differences between local markets, you need your real estate agent to give you their experience.
Note also that the comps will also show Days On Market, the original Listing price, the final Listing price (if they lowered the price) and the final sale price. These will all tell you a bit about your market, and help you make your decision.