The Top Ten List of Homes Undersold in 2014!
Oh how I wish I could publish this list of homes sold under or way under market. Every month I have to check the comparable sales in our neighborhoods and I continuously have to look at sales that are, at times, disastrously under market. Members of the general public mistakenly believe that it is a simple process to determine the value of a home. In fact every home is different and variations in the upgrades, improvements, maintenance and overall condition significantly affect the final sales price of a home. It is easy to see how agents with less experience who do not work these subdivisions every month or only once in a while could make a mistake pricing a home. Combine this with the fact that our market has yet to show a definitive trend one way or another could lead to some serious underpricing errors.
As an example of this, one of my strongest points as an agent is the ability to effectively challenge appraised values on my listings. We recently had an appraisal come in several thousand dollars under sales price. When I looked at the appraisal, I found that the appraiser had used some comparable sales that were not the most appropriate and had also made downward adjustments for condition as compared to our subject property. At this point, most agents would acknowledge that the appraiser is more knowledgeable than they are and either ask the seller to sell the property for the lower price or it would eventually lead to a cancellation of the escrow. In fairness to appraiser’s, they are commonly right on the money as to value and condition but not always. I was able to effectively and professionally challenge the appraised value based on the following criteria. First, several of the comparable sales being used were my sales. Actually having visited the comparable sales allows me to dispute the condition adjustments used by the appraiser. Secondly, having intimate knowledge of the similar floorplans in the neighborhood allowed me to promote the use of different comparable sales that both more closely matched the subject property and better supported the appraised value we were seeking. Thirdly, when the appraisers do their research, they can see how many homes that I have sold in the area and thus are more likely to be receptive to the suggestions listed above. The net result was, the appraiser adjusted the sales price to our requested value and the transaction progresses. The alternative would have been for the entire escrow to be renegotiated, usually under the pressures of moving commitments that forces a seller to choose a less than desirable outcome.
My point is that if an appraiser, who has hundreds of hours of required training and apprenticeship, can make an error pricing a home for sale, what is the error rate for agents, many of which have a very limited amount of training or experience, especially in this area, in pricing your home? I think the error rate may be much higher than you might think and that’s why it breaks my heart when I see a comparable sale come up for $5,000 or $10,000 less than I am sure I could have obtained for the home.
You may be thinking why is this important to me! Every time a sale happens for less than what it could have sold for, this limits the appreciation and growth of equity in your home, whether you intend to sell it soon or not. If you are considering selling your home then these recent low sales directly affect the appraised value of your home.
In the past six months, I have sold more than twice the number of homes as my nearest competitor and almost 4 times as many as the next three competitors. My marketing plan has proven itself for almost 20 years here in the Avondale area. If you plan to sell your home and you have a favorite real estate agent that you have used in the past, there is no harm in at least interviewing with me and helping to establish the market value of your home so that you receive the maximum return on what for many of us is the biggest asset we will ever own. I provide this as a free service.