Had a listing appointment the other day and wanted to share my experience as well as maybe get your advice or opinion.
This prospect/customer had a 10-acre lot with a 1,700 square foot, 3-bedroom, 2-bath house on it. But she gave 5-acres to her son and now wanted to sell her share 5-acres which has the house setting on it.
They had a rod-iron fence custom built around the 10-acre lot with a horseshoe style driveway and a remote gate (which had NO Keypad, required remote from within).
They stated she wouldn't sell for less then $500,000, justifying the price because of the cost of the fence $250,000 and the driveway $50,000 and because she had utilities already on the property.
So I explain to her about the other properties in the neighborhood exactly on the same street that were available using the CMA Report that showed similar properties in the same area 5-acre lot at $120,000 & another 5-acres with a 3-bedroom house at $185,000.
She stated that she would sell for less, so I asked her "so you want a buyer to pay full amount for the fence and full amount for the driveway", because if someone purchases this property they will only receive half. She just stared at me...
That's when I explained the appraisal example and I gave her to scenarios; the first one I stated, what would you do if we received the full amount for the property at $500,000 and the appraisal came it at $1,000,000 - you would be short changing yourself, on the other hand let's say we accept the offer at $500,000 but the appraisal came in at $300,000 - who would need to make up the difference?
Because the lender will only loan on the lowest amount and in this case it will cost them even more since there aren't too many lenders' willing to do 100% loans. That means the buyer will need to bring $200,000 plus 20% down of $300,000 = $60,000 - that's $260,000 cash plus costly cost.
I then suggested that they get an appraisal so they wouldn't be short changing themselves... And they agreed!
What else would you have done?
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