With more buyers looking for homes than there are homes for sale, it seems sellers are okay with allowing agents to overprice their homes.

Based on opinion, anyone can give a price – me, another agent, the seller, Zillow, friends and family. On the other hand, if you are thinking of selling your property, what are the drawbacks of overpricing your home?

bank appraisal vs market value

If the house isn’t a cash transaction and the buyer is getting a mortgage, the bank will appraise the home’s value to validate the seller’s listing price. This is part of the selling process.

As part of the bank appraiser’s job duties, they compare nearby homes that have sold recently. If the appraiser notes the home is priced correctly, great! If it’s under priced, then the buyer gets instant equity.

What happens if the home is overpriced?

Once the bank appraiser has provided a market value, the seller has these options:

• The buyer can choose to pay the difference – if they have the cash
• The seller can lower price to the appraised price
• The buyer doesn’t have to buy
• The seller does not have to sell

Why should you be concerned?

YOUR home’s value has been influenced by homes being sold in your community! Did you know that home sales over the last 12 months within 2 miles of your home have an effect your home’s value?

Neighborhood Market Values May Differ

If you’ve already found a home in a new neighborhood or different state, the proceeds from the sale of your current house may not be enough to cover the mortgage on the new home. If your current home’s value is less than the price of the home where you’d like to live, you may have to find a home that meets your budget or obtain a mortgage for the difference.

It’s challenging to tell a seller that their desired home price may be overpriced. However, think of how challenging it can be to continue paying a mortgage, keeping the utilities on, maintaining the property and lawn care chores, paying property taxes, etc., for a home you don’t want to live in anymore! 

 Having reasonable expectations helps a seller move forward towards getting top market dollar for their property.

It’s AWESOME that the market has rebounded quite a bit. However, for a seller to accept a listing price without the agent providing comparable homes sold to validate the listing price promotes unrealistic expectations. The seller may have plans to use the extra money when they move to their new destination.

Some agents do this just to get a listing, which can lead to disappointment for the seller – especially if the house doesn’t sell due to an over-inflated listing price.

Real estate is a very competitive business. Just because an agent comes in with an infectious personality, promising you everything from doing yard sales to walking your dog – it doesn’t mean the agent can accurately and professionally market and sell your house.

If it’s too good to be true, it probably is! The real estate market will not always remain a seller’s market. Working with an agent who can accurately assess neighborhood home values, whether in a sellers’ or buyers’ market, can give you a realistic picture of what to expect when you decide to sell your home.  The goal is to get you the most money the market will allow, selling your home on time with the least hassles.

Isn’t that what you hire an agent to do?

I’m a local  Realtor® serving home sellers and buyers in Virginia Beach and the surrounding areas of Hampton Roads.

If you’re serious about selling your home contact me today to help determine the best possible estimate for getting your home sold!

There are many reasons a homeowner may want to sell their house For Sale by Owner. The seller might be concerned as far as how much money they’re going to get out of the transaction because funds are tight, especially if they have to make repairs to the property. Another reason is that they may feel that they can do it themselves and they don’t need an agent or perceive the value that a real estate agent provides.

What are the Pros And Cons

Knowing the best ways to sell your house For Sale By Owner will save you time and money. Before you decide to sell your home unrepresented by a real estate agent, you need to ask yourself a few questions:

Do you have the time to invest in selling the home? Agents and buyers will be calling you quite frequently for questions and showings.

Do you have time to show the property? Do you know how to stage the home to impress buyers so that when they see it they’ll fall in love with your house? Staging also includes adding curb appeal. That’s very important in attracting potential buyers because if the property doesn’t look good on the outside it can be a turnoff for buyers.

Do you have it advertised online? That’s where most people look for homes. Tip: It just can’t be advertised on sites like Zillow. You have to have it on multiple sites.

Do you know how to set the right price? You don’t want to leave money on the table or end up giving the house away.

Another thing is showing times. If you’re not flexible when it comes to showing the house possibly due to your work schedule or other obligations buyers will lose interest and you’ll miss out on showings.

Are the buyers pre-qualified? If not, you may have to help the buyer obtain financing. I’m sure you don’t want unqualified buyers touring your home. That’s a good thing to know.

Is the buyer working with an agent? Are you willing to compensate pay the agent for bringing you a buyer? Don’t forget, the agent will not represent you, but the buyer. You’ll be working out all aspects of the transaction as well as negotiating, completing the purchase contract and legal disclosures, scheduling inspections and coordinating the closing, and performing other necessary aspects of the sale. The best ways to sell your house For Sale By Owner require planning ahead.

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Dealing with the legal stuff…..

An important aspect of the sale is the purchase contract, addendums and disclosures required by law. Do you know about disclosures for lead paint disclosure, disclosing to buyers about living near military installations that use aircraft (AICUZ) and other disclosures required by law?

What if you live in a condo or property owners association? There are disclosures related to that as well as disclosures about fees and association documents that must be provided within a certain time frame.

You’d want to be prepared for all these different aspects of the sale so that later on, even after the sale, you don’t want to incur a lawsuit from the buyer or others related to the sale just because you did not disclose certain things that you didn’t know were required.  What’s good about having a real estate agent to represent you on the seller side is that they have errors and omissions insurance, which can provide coverage in the event something goes wrong.

Now you have the information you need to sell their house For Sale by Owner. By the way, research from the National Association of Realtors® (NAR) shows that people who sell on their own usually knows the person with whom they sold the house. Also, statistics show that FSBOs typically sell for less than the selling price of other homes. Data from the NAR as of 2018 FSBO homes sold at a median of $200,000 last year (up from $190,000 the year prior), and significantly lower than the median of agent-assisted homes at $264,900. That’s possibly because of the seller not having all the data available when it comes to doing a comparative market analysis or having a market snapshot of their community’s value.

The Bottom Line

If you have any questions or concerns I’m here to help. There’s no charge or obligation until you’re ready to list your home. Also, I don’t get paid unless the house sells, so there are many advantages to consulting me regarding the sale of your house. If the fee for service in representing you is a concern, I understand that you’re trying to save money. It’s an investment and you want to get the most for it. But….if you want to:

• Benefit from their expertise to help you prepare your house to WOW buyers and get the most traffic
• Showcase your property to get buyers attention with professional photos
• Utilize hundreds of websites to give your house the most online exposure
• Have someone arranging showings
• Have the most qualified buyers come through your door
• A skilled negotiator who is working for you, not the buyer
• Getting your house under contract to sell on time with the least hassles and for the most money the market allows
• Making sure legal risks are covered during and after the sale
• Facilitating the paperwork and coordinating the closing process so the only thing you have to focus on is moving….

If after giving it a try you decide you want an agent who knows the market, who has access to qualified buyers and their agents, and who provides quality service you deserve,  contact me to discuss your goals and how to achieve them. I will make sure you have all the facts.

So, with that being said, Happy Home Selling!

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