Tuesday, March 4, 2014

What Is My Home Worth?

It's only worth what a buyer is willing to pay for it. There, this blog post is over....all done.

Oh, okay, I'll explain!

So much of what Realtors do is valuation of homes. For a buyer we check comps to see if the home is over priced or under priced.  We discuss appraisal problems with over priced homes. We discuss the likelihood of multiple offers with unrealistically under priced homes.

Same for seller. We show them the comparable sales in their are. We add and subtract for amenities or lack thereof.

But, quite honestly it boils down to what a buyer is willing to pay to have that particular home.

A seller story and a buyer story:

Ran the comps and suggested a list price for a new seller. He asked if I would take an open listing and sell it for $50,000 more and we would share the profits and he would increase the commission paid too. I get it, he thinks I would possibly be monetarily motivated to get someone to pay way more than it's worth so we'd both be happier. However, it can also be a complete waste of valuable marketing time by listing too high. Trust me, no buyer would pay that price for that home. Nope, nada, none. Not in the current market. I told him in 2021 maybe!

Buyer story goes a little different. Found a property, showed buyer the comparable sales. Again, making adjustments for similar homes with and without the same amenities. They decided to write at 10k over list price. Okay, then we get into a multiple offer situation and they bump up their offer another 5k. Really pushing the limit on appraisal. Listing agent collects a few more offers and then calls me to see if my buyer would go up to 35k-ish over list price as they have some in that ballpark. More than one too!

I love my buyer. The says: "What are they crazy? They can have it for that price!"

You see, it's only worth what a buyer is willing to pay for it. It wasn't worth it to my buyer. Maybe someone else's....but certainly not mine. Smart cookie my buyer is!

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