Originally published on HomeAppraisalsBatonRouge.com as Post-Listing Appraisals For OverPriced Baton Rouge Homes Not Selling
Post-Listing Appraisals. Between mid April 2016 to mid May 2016, I've been hired to perform more Post Listing Appraisals than Pre-Listing Appraisals. Below is just a couple of recent summary requests". And, be sure to read to end for "5 Ways an appraisal can help sell a stale listing."
"Hi Bill, what do you charge for a listing appraisal where the seller needs a reality check?"
"Please perform an appraisal for us at 1234 Sample Dr. This home has been listed 181 days and we keep receiving low ball offers. My sellers want to know why and why this home isn't SOLD yet in this supposedly HOT Baton Rouge housing market where inventory is low and homes sell in days."
"Please conduct an appraisal on this property for me and my clients. We've had X number of showings on the home, and they are asking why it isn't selling. We want a realistic price in today's market to make it sell."
Generally, the listing has been on the market for 90+ days, isn't selling and the REALTOR® asks me to be that unbiased third party to deliver a dose of reality to sellers. And, this happens more often where the sellers wanted to list at THEIR PRICE versus the price the Agent recommended.
REASONS WHY A LISTING ISN'T SELLING:
1.) Overpriced. Sometimes the home may be overpriced. We've been hearing for months now about low inventory and homes selling in days, which makes today's buyer more willing to over price based on the hype in local and national news. Facebook posts about homes selling in days also help fuel the over pricing fire.
2.) Outdated Design and Renovation Cost, Will I be upside down afterward?
Sometimes the home has outdated features, such as 2,600sf living area BUT a tiny 8' x 9' Kitchen, which suited buyers in 1970 but not in 2016.
Sometimes that 1970s no personality front elevation design just isn't appealing and can't be changed to make the home attractive. Sometimes the design can be changed but probably at enough significant cost to leave on upside down on value.
Then, the insane cost of renovating Kitchens and Bathrooms in 2016 means a buyer must buy at a lower price so as not to be so upside down after renovations. The question in a buyer mind is will the home be worth at least my investment after I buy and invest say $80,000 in renovations? This leads me to my next point...
TODAY'S HOME BUYERS ARE SAVVY AND HIGHLY EDUCATED ON WHAT AND WHAT NOT TO BUY! THEY'RE NOT STUPID WITH THEIR OR THE BANK'S MONEY!
Below, the two homes at top are new construction in a subdivision where the majority of homes are similar to the two homes at bottom of photo. The bottom 2 sold around $219,000 to $237,000 or $119/sf and both have lake frontage. The 2 custom homes are not on the lake and are offered around $295,000 or $150/sf have been sitting on the market for close to 350 days. Today's buyer is highly educated and knows they shouldn't be paying $150/sf in a sudivision where the majority of homes are selling at $119/sf, despite the fact these are new custom homes.
My Appraiser Friend in Birmingham, Tom Horn SRA, wrote an excellent and thorough article about this here:5 Ways an appraisal can help sell a stale listing . Tom's main points are quoted below:
"Get accurate square footage for an accurate price- Accurate pricing on a home starts with knowing the correct square footage."
"Take into consideration solds and listings that have occurred since the listing- If the listing has not sold within a certain period of time then there could be more recent data to base a different list price on. Maybe some homes have sold since the home was listed or others have come onto the market."
"Get a fresh set of eyes from an unbiased third party- Bringing in an Appraiser who has a fresh and unbiased perspective on your home could result in arriving at a price that is based on the market rather than what you need to get out of your house. We all have notions about what we want to sell our house for and maybe what we need in order to pay off the mortgages we owe, however this may be different from what the home is actually worth."
"Use the sketch as a selling tool- Some people are more visual than others and providing a floor plans sketch may help these individuals “picture” themselves being in your home. Knowing where rooms are located and the flow of the home can help buyers envision where their stuff will go, which can help sell your home."
"Market it as a “pre-appraised” home- The peace of mind that a buyer has knowing that the likelihood of their deal falling through due to a low appraisal will be increased by getting a pre listing appraisal."
"Use the appraisal to find out what should be fixed before selling- One area I have seen cause problems when performing mortgage appraisals is that of repairs, and this is especially true for homes that use FHA financing. A listing appraisal can help you determine what repairs should be done ahead of time so that the loan closing will not be delayed or the loan fall through."
If you have a stale listing sitting on the market and need a fresh set of eyes to deliver a reality check to your seller, I can help. Thank you for your time! Bill Cobb Appraiser 225-293-1500