CLARK: Appropriate pricing remains important

According to a recent survey (Quicken Loans Home Price Perception Index), home owners estimate the value of their home to be, on average, 2% above that of an appraiser’s opinion. This can be significant in metro areas having higher than average market values like Greenwich.

This inflated view of a property’s value often results in the seller’s putting their homes on the market for above market value. This has been proven to be a costly mistake. Buyers will wait for the property to be reduced or they will move on to other properties. Realtors need to inform home sellers what not only has sold during the best one to three months, but also what is on the market and under contract.

Home prices need to be adjusted if there are no showings and no offers (4-6% reduction); if there are few showings (6-12%); and if there are only drive-by looks; and if there are no showings (at least a 12% reduction). Everything sells, but it has to be presented at close or near market value.

Sellers of the perspective there needs to be room for negotiation should understand that appropriately priced homes get their list or close to list price. Greenwich market statistics substantiate this contention. Homes at the higher end of their range are more likely to get less than if priced closer or at market value. Although there is a limited supply of homes in some areas, buyers are still being careful and fear over paying for a home.

It is recommended that an “audit” of the home’s attributes (i.e. square footage, number of bedrooms and baths, age of home, height of ceilings and floor plan) as well as its areas of concerns. Negatives have to be considered when formulating the list price (i.e. busy street, flood zone, electric and oil heat, septic and well). If a mortgage is being sought by the buyer, the home will have to be appraised by the bank and these factors will be taken into account.

Realtors and appraisers work to ensure an appraiser provides “an independent, impartial and objective market value of a home”. Appraisers are receptive of information that assists them. As realtors are more likely to have the latest market information – what has an accepted offer, what is under contract and pending, they can provide needed information to appraisers.

Often appraisers request of a realtor the terms of the sale, properties that would considered comps and a list of renovations or upgrades done by the current owner – all contributing factors of value. Realtors cannot attempt to influence the appraiser to formulate a value. Rather, the realtor can only provide facts.

Realtors should also continue to update their clients with market developments that affect the homes they represent. These developments can affect the value of the property and the property’s list price should be adjusted accordingly to effectively sell it.

Mary Ann Clark is a realtor with Coldwell Banker at 177 West Putnam Avenue in Greenwich. Questions or comments may be emailed to [email protected]

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