ATTN: Realtors - Price your homes correctly...

... or this is what may happen. Pricing LOW for a quick sale these days may backfire come appraisal time....
  • October 24 2012 - Los Angeles
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Answers (5)

multiple agents disccussing fixing home prices; the number of anti-trust laws being broken (or bent) is astounding.
  • December 04 2012
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I agree that the home must be priced close to appraisal or there will be problems. Unfortunately, most buyers and sellers expect some back and forth negotiations on price and the homes are listed at a price that reflects this. So far I have not had issues with the appraisals personally, but many have.
Good advice Vince.
  • December 04 2012
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Here on Cape Cod the bank appraisals are very tight and if the property is not priced correctly it will not go through. 
  The bank owned forclosed or short sale can hurt the values of other homes in the neighborhood.  We had a buyer the other day inquire why he couldn't buy a non distressed house at a below average price when a buddy of his had with a forclosure.  The buyer was subsequently educated as to the process.
   It is very important to price your homes correctly to represent your sellers in the best way.  
  • October 24 2012
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Profile picture for Cindy Quinton
And buyer's agents better be even doubly careful. For instance, many bank owned properties are going on the market at lower than market value prices. Then they have multiple bidders. At least one bank is now including a caveat in the contract that if the appraisal is lower than the sale price, they will NOT renegotiate. So if the buyer happens to offer more than the appraiser says it is worth, they have the choice of paying the extra out of pocket or losing the contract. 

The problem is that when they sign the contract saying they will pay the difference, there is no way to know what that amount might be. If the buyer is trying to bid the most the house is worth to get the contract, they are going to go OVER more times than not. A minor 3% difference on a $300,000 is an extra $9,000 out of pocket.,..or start over and forfeit the hundreds if not thousands you have invested in inspections and appraisal (my personal inspection costs came in around $1,500).

I understand why the banks are implementing this policy, to keep people from overbidding just to get the house and then using the appraisal to renegotiate. However, I feel if they are going to do that, they should have an FHA (or somehow written in stone) appraisal at the beginning. Then if people want to overbid, they know how much has to come out of pocket, as HUDSTORE does it. 

But alas, that would be entirely transparent and fair...
  • October 24 2012
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Profile picture for wreynol4
Curtis, what a great example!  How true it is that every home should be priced correctly in order to maximize value for the seller, and secondarily the homes around it.

  • October 24 2012
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