How do you price your home for sale during climate change?
Wednesday, December 30, 2009
A) We all know that pricing is the most important part of marketing your home for sale.
B) A willing buyer and seller are key to executing a sale and buyers set market price for everything.
Right? Not so fast. We have experienced a climate change in the entire real estate market specifically, Los Gatos and comparable San Jose neighborhoods.
Today, the appraisal has become a problem for some. Just look at Los Gatos homes for sale they are like a floating iceburgs…. some underwater. The appraisal issue has created some warming and chilling. Why appraisals? It’s called HVCC (Home Valuation Code of Conduct). Basically, it means a buyer’s lender will have little, if any, persuasion in the appraiser’s valuation. Cooling home prices and heating up debate.
When the Poole family wanted to make an offer on a home recently they were surprised I suggested a number much lower than the listed price. It was obvious to me the home was poorly priced. Due to the HVCC issue the appraisal came back even lower! This was great news for us and terrible news for the seller.
Appraisals are now ordered and obtained through appraisal firms who then distribute the appraisal orders to their list of appraisers. The chosen appraiser may not be familiar with the Los Gatos Real Estate market, the surrounding neighborhoods in Cambrian or the broader San Jose Real Estate Market that they are being asked to evaluate. Real climate change.
Should you ask your Real Estate Agent to provide a market analysis to help set a Los Gatos ‘market price’ for you? Yes, but not any “agent” will do anymore.
In the end the appraisal will make or break the pending sale.
A market analysis report provided by an agent is derived from the MLS and misses a few appraisal factors as part of the equation. Alternatively, an agent who provides BPO (broker price opinion) to lenders will have experience using a more accurate formula as opposed to an ordinary agent’s market analysis.
Lenders order BPOs from qualified Broker/Agents, as an analysis tool, for refinancing, loan modifications, short sale approvals and foreclosure pricing. Using a Broker/Agent, who is qualified to provide lenders this kind of information is a better choice.
So what do you do?
- Interview several Realtors to help you ‘range’ your price.
- Request contact information from their past clientele. Not simple ‘textimonials’.
- Choose one who provides 3rd party resource material as part of their pricing quote.
- Try to find a Realtor who is a BPO provider and request their BPO documentation that supports their familiarity with your neighborhood.
Using these simple tips alongside a common sense marketing approach will help you price your home realistically. Remember, the appraisal will ultimately define the selling price and it is of enormous importance to get it right from the start.
How would you feel if you accepted a “pie in the sky offer” to only have the buyer’s lender not grant loan approval? You would probably go off like Mt. Vesuvius and that won’t help the climate change debate.
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