As Realtors "we" can list your home for whatever "we" want. Why else are there so many homes on the market? Most of them were priced incorrectly. So in order to say "I can only price it at appraisal", first, I have to have a valid appraisal. An appraisal from a tax assessor, refinance or even sometime during a purchase is not a valid appraisal. Those appraisals do not take into account current market conditions and only evaluate the past solds. Doing this is like chasing a ball downhill, looking at 3 month data is always going to be problematic in a market like this.
Now that's not to say an agent will list the home for appraisal. Professionally speaking, it would not be wise for any agent to list the home at appraisal value given the current market conditions.
Secondly, the purchase contract a buyer will use to buy the home has a special stipulation in there that allows them to opt out of the contract if you will not match their appraisal. For example, if we listed your home at 500 and the the buyer agrees to 500 but the appraisal comes in at 250 then you have the option of matching the 250 or the buyer can opt out. Reason being, the bank will not lend more than the appraised value. In fact, the banks are now lending as little as 75% of the appraised value in many cases. Unless you have most unique home in the universe, you wouldn't expect a buyer to make up the difference over and beyond an appraisal.
The buyers are smarter. With the internet and the amount of research that buyers do, they can rule out homes very easily. If you price your home at appraisal or above, they will immediately know. Furthermore, their agent (myself included if I am their agent) will do a market analysis and provide them information on making an offer if they were interest. The bottomline is that the buyer may not even see the home if you price it out of range. More on this when we meet.
Comments(1)