Profile picture for CherryLiu

What does it mean when the listing price is 2x as high as the market value of the place?

Hi, I'm a first time buyer and I have so much to learn. I just don't want to get a really bad deal out of my ignorance. So I'm looking at this condo I like. It's listed as $160k, but the market value is only $80k. I'm not sure what to make of it. I'm guessing it means the listed price is super inflated and this is a bad deal, right? The property is in Pittsburgh PA.
If someone could please let me know how to interpret these terms it'd be super helpful! I researched on google a lot but got confused even more. Thanks in advance! :)

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June 20 2012 - Squirrel Hill North
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Answers (6)

Is it reallly listed for sale by a a Realtor at $160K? It would be unusual for a Realtor to take a listing at twice its real value.
If so, where do you get the value of $80K from? Hopefully from recent actual sales, not from an "automated valuation model" like Zillow, because they are a joke.

If it is really listed at $160K and only worth $80K, I would wait for a more realistic opportunity.

The best advice I can give you is to find a good local Realtor to help and advise you, who likes working with first-time buyers. Shouldn't be too difficult.
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June 21 2012
Dear Cherry:

As a first time buyer you are no doubt confused about what Zillow is.

Zillow is not a licensed real estate broker and they are not in the business of selling homes.  Zillow is a site designed to sell advertising.

Zillow listings are not a substitute for a local MLS.  If you are getting a mortgage loan, there is not one single bank that will use a Zillow Zestimate.  The Zestimates are a mathematic formula applied to data Zillow scrapes from public tax records, based on the tax value of a property, which has nothing to do with the actual market value.

Since you are a first time buyer, you should select a good local Realtor to represent you.  Home sellers in short sales, and banks listing foreclosures, have teams of lawyers and real estate agents working for them.  You should never pay any fee to have a buyer's agent represent you.
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June 21 2012
Profile picture for bbyrnes59
if you are looking at a fact sheet from the West Penn MLS about the condo, the "market value" is actually the assessed value that the county assigned for property taxes.  This was set up back in 2002, and a new assessed value for 2013 should have been determined for next years taxes.

If your comparing on your own, you will want to also know what the monthly fees the condo has and what they cover.
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June 21 2012
Profile picture for the_country_hick
Sometimes you will find a seller who bought at the most expensive time to buy real estate ever about 2006. They then figure they deserve to make at least 50% profit on the sale. As a result they overprice their property by a huge amount.

In that scenario it means the property is not going to sell.

Otherwise read the replies below.
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June 20 2012
Profile picture for wetdawgs
Perhaps you could expand on your source of  the "market value" of the property?  

If you are referring to the Zestimate as the market value, you may find that "What is the Zestimate?" and "Data Coverage and Zestimate Accuracy" are useful background reading.

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June 20 2012
Hi Cherry,
Sounds like you may know more than you are letting on. Is this condo a short sale? Sometimes a "short sale" property will be listed at what is owed. This is done to prove to the lender that it isn't worth what is owed. The listing price will continue to fall until an offer is made. If you can substantiate that the property is only worth $80k, make an offer at that price and submit comparables to show how you arrived at your offer. Short sale or not, if you can substantiate your offer, you just might have a chance at this condo. The worse that can happen is that the seller says no. If they do, move on and find a condo that is priced correctly.

Good luck!
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June 20 2012
 
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