How much is the home actually worth?

By
Real Estate Broker/Owner with Christiansen Group Realty (260)704-0843

I had an interesting conversation with one of my buyers recently.  He had interest in a home that is priced at $250,000.  It's been on the market for a few months now.  

The home itself is in an area he likes, but it does need some cosmetic updates.  By cosmetic I mean a fresh coat of paint throughout and some wall paper removed.  

When we were discussing the offer he asked me what I thought the home was actually worth.  

Knowing the area well, I told him that if he got the home in the $235,000 - $240,000 price range, he would be getting a fair deal.  

Top listing agents in Fort Wayne"I'm not paying a penny over $225,000 for it.  That's what I think it's worth" said my buyer.  

I asked him what he based his price on.

"Nothing.  I didn't base it on anything.  I'm just saying that I won't pay a penny more than $225,000."  

 

We wrote the offer at $225,000 with a few seller concessions.  I told the listing agent that our offer was a "take it or leave" it offer and that my buyer wouldn't go a penny more.  

They rejected it.  

My buyer was 100% okay with them rejecting it and we moved forward and found him another home that was the right fit.  

The home he made an offer on later sold for $242,500.  

This story got me thinking...  How much is a home actually worth, and who decides on that number?  

When we list a home or write an offer on a home, we do a market analysis to determine our opinion of price.  

That consists of looking at comparable homes that are active and pending, and comparable sold homes in the area of the home in question.  

Our opinion may be slightly different than another agent.  

That other agent's opinion may be different than the seller's opinion.

That seller's opinion may be different than a buyer's opinion.  

That buyer's opinion may be different than an appraiser's opinion.  

Overall the market dictates what a home's value is, but everybody has their own opinion.  

Thoughts?

Century 21 Bradley Fort Wayne

 

 

Posted by

 

 

   

Fort Wayne Realtors Jared and Amanda Christiansen with Century 21 Bradley

Amanda Christiansen is an award winning Realtor with Christiansen Group Realty.

 

Jared Christiansen is a business partner and in charge of marketing and taking care of things behind the scene.

 

Enough about us...

 

Tell us what you want your real estate experience to be, and we will do it YOUR way.

 

Buying a home in Fort Wayne? Tell us your wants and needs. Let us know how you envision your family living.  Tell us what's important to YOU, and we'll find the community and home that fits.  

 

Selling your home in Fort Wayne?  Our job is to make you the most money possible in the shortest amount of time. We offer our sellers professional staging, professional photography, and more internet marketing than most. 

 

We are committed to giving you everything we have to offer.  We are both full time agents and will work around your schedule.  Do nights and weekends work better for you?  NO PROBLEM. We are here to help YOU at YOUR convenience.

 

Amanda can be reached at 260-704-0843, and Jared can be reached at 260-704-0842, or you can email us at JaredChristiansen@gmail.com, or Amanda427@gmail.com.

 

 

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Rainer
88,126
A. J. Zaki
REMAX Realty Pros - Boca Raton, FL
Home Finder In Florida

                                                                                                                      Well written. I enjoyed reading this, thank you for sharing.

May 21, 2014 02:21 AM #1
Rainmaker
2,394,822
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

AND Everyone is entitled to our opinion, right? I'm glad to hear you take the time to do a comparative market analysis for your buyers. I am amazed at the agents that don't and then pull a price out of somewhere unknown to other buyers and write the offer.  When this happens, a low ball offer I ask the agent for the homes that sold that lead them to believe it was a fair offer.  Talk about sputter...

May 21, 2014 04:00 AM #2
Rainer
355,882
Tom White
Franklin Homes Realty LLC (615) 495-0752 or www.FranklinHomesRealty.com - Franklin, TN
Franklin Homes Realty LLC, Franklin TN

Jared, this is such a hot button topic these days because the inventory is so low and the demand is relatively high. Some sellers are asking prices that are way over recent comparables. Tough market to be buying.

May 21, 2014 05:09 AM #3
Rainmaker
798,546
Kerry L Klun, Broker/Owner
Palm Realty - Melbourne, FL
321-626-5868

Congratulations on finding the Buyer a home in his price range.  In some situations you could have been showing homes for months.

May 21, 2014 05:15 AM #4
Rainmaker
528,197
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

At least your buyer was honest about what he was willing to pay and was okay with the outcome of that decision.  Sounds like you found him a better fit for a price that he was willing to pay in the end.  It is interesting that he had no reason for his price, it was just his price.  It wasn't the right home for him.  I think that many buyers try to justify their price by what needs to be done or by what the current owner paid.  Those are not really correct measurements of value either.  Great discussion topic.

May 21, 2014 05:43 AM #5
Rainmaker
1,518,592
Amanda S. Davidson
Amanda Davidson Real Estate Group Brokered By eXp Realty - Alexandria, VA
Alexandria Virginia Homes For Sale

Jared, you know what they say about opinions ;) You hit the nail on the head, the market dictates what a home is worth. I do find it interesting he didn't have a reason for the price, normally I hear buyers say one thing or another as to why they think a certain price.

May 21, 2014 06:46 AM #6
Rainmaker
1,333,294
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Jared - You're spot on, everyone has their own opinion.

May 21, 2014 08:38 AM #7
Rainmaker
1,558,046
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

The opinion of value may be what the buyer will pay for it and it's their budget.

May 21, 2014 12:15 PM #8
Rainmaker
398,287
John Wiley
Right Move Real Estate Group- EXP Realty - Fort Myers, FL
Lee County, FL, ECO Broker, GRI, SRES,GREEN,PSA

Jared, thanks for sharing a thought provoking post. The Seller cannot set the value, the Agent cannot set the value, it is the market, the one who pays. Everyone else has to decide if the price offered is something they can live with.

Great job with your buyer.

May 21, 2014 10:00 PM #9
Rainer
220,146
Suzanne Otto
Six Twenty Designs - Lansdale, PA
Your Montgomery County PA home stager

You're right, they all have an opinion. But I think the seller has the final say on what he thinks his home is worth :)

May 21, 2014 10:01 PM #10
Ambassador
884,209
John Meussner
Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, - Walnut Creek, CA
#MortgageMadeEasy Walnut Creek, CA 484-680-4852

As much as I don't like it, if a buyer is using financing, the appraisers opinion on what the home's worth is the only one that matters.  It is amazing how differently buyers, sellers, agents, and others all think differently.

May 22, 2014 08:20 AM #11
Rainmaker
3,142,395
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Home and Condo Specialists

We just had a situation where we priced a home at $250,000 because of its condition (its an all original 40 year house and needs lots of renovating and repai). The offers started pouring in, but one of our own buyers said to us we will NEVER get that price...Not only did we get it, but it went over ~ So who knows the real value???

May 23, 2014 11:25 PM #12
Rainmaker
926,216
Kwee Huset
Kwee Huset Realty - Venice, FL
Venice Florida Homes For Sale

Beauty is in the eye of the beholder. If a buyer fall in love with a house he/she will pay for it. BTW thank you for your comment on my post.

May 24, 2014 01:36 PM #13
Rainmaker
868,086
Elyse Berman, PA
Best Connections Realty, Inc. - Boca Raton, FL
Boca Raton FL (561) 716-7824 CRS, ABR, GRI,ePR

Jared,  A house is worth what a buyer is willing to pay for it.  I just had a similar situation where we presented an offer above the comps, a clean offer asking for nothing and got no response from the seller - not even a counter.  The buyer walked.  The house is overpriced according to the comps and to this buyer.  Will it sell for more?  Maybe, maybe not.  

May 26, 2014 10:06 AM #14
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