The scariest scenario for any homeowner in today’s market is to be left without equity, after trying to sell their home for an extended period of time. This is all to frequently how that happens. An investor friend decides to put his Boise real estate on the MLS with a real estate agent. As is often the case, the listing agent comes back with a Comparative Market Analysis which indicates the value of home to be around $250,000, then the owner decides that he wants to list the home for about $25,000 more to start off, at $275,000.
Due to over-pricing, the home stays on the market with no offer or hope to sell it. During the same period of time, the home down the road sells for the correct market price of $250,000. By the end of the 6 month listing agreement the seller decides the Realtor did not do a great job of marketing the home and drops the listing.
The seller hires a new agent, and lists the house for $250,000. With recent CMA in hand, the new listing agent puts the home on the MLS for $250,000, still $25,000 above the depreciating market value. With that rate of depreciation, the current price simply means the home will sit on the market even longer. Another 6 months goes by and nary an offer is brought.
In another rotation of agents, the new listing agent is dismissed and a replacement is brought in for a fresh start. The home has been on the market for a year now, with 3 different agents. Now aware of what is going on in the market, the homeowner agrees to list the home at $225,000, thinking that will get it done. By now, the owner has lost around 50 thousand in equity, because the market has slid to about $200,000 for his home value.
I think you get the idea here. Given the information, the listing agent and the market variables cannot be the cause of this problem. The problem is a bad seller. If the correct market value would have been agreed up on in the first place, the home would have sold. Boise real estate has been depreciating on a weekly basis, so letting any listing sit on the market at a steady price is disastrous for the seller, regardless of how much they have put into it.
The other thing to bear in mind is appraisers look at the same comparable sales that we as Realtors look at. If your Realtors CMA says that the listing price should be a specific amount, you can also expect that the banks appraiser will also conclude that.
You can remedy all of this with this easy solution. Once the homeowner has indicated they are not willing to follow your professional opinion relating to the house, accepting the listing would be a big mistake. Unless you have the idea of needing a place to park your real estate sign, taking a Boise real estate listing like this one is a very bad idea and may cost you valuable resources. For a seller, if you think your Realtor’s analysis of your home is inaccurate, it might be a good idea to have a formal appraisal done on the property. It’s extremely rare for someone to be able to sell a home for more than the appraised value because lenders will not write a loan for more than a home is worth.
There are lots of appraisal companies for Boise real estate, and the cost is generally a couple hundred dollars. Insisting on your price, over what an appraisal will tell you is the market value of your home, may end up costing your thousands of dollars in equity, and ultimately any sale at all. Listing any real estate for more than it is worth does way more damage than good, and even costs an agent more money, so avoid it. I understand wanting to make sure you don’t get as much as possible for your home, but listening to the expert opinion of your Realtor can make the difference between a sale and a foreclosure.
The author enjoys writing articles about Boise real estate. Click on the above link to learn more about that topic!