If you’re suffering from a stale listing consider an appraisal
If you’re a FSBO (for sale by owner) home seller or an agent and haven’t been able to sell your home, you may be the victim of a stale listing. A stale listing is one that has been on the market for a longer than normal period that hasn’t sold.
One of the top reasons that a home will not sell is that it is not priced correctly. This may have been caused by a homeowner with unrealistic expectations or maybe the home is in an area you are unfamiliar with so you weren’t sure about what the asking price should be. Today we’re going to take a look at the different ways an appraisal can help sell a stale listing.
Get accurate square footage for an accurate price- Accurate pricing on a home starts with knowing the correct square footage. If you don’t know what the accurate heated and cooled living area of the home is you will not be able to determine the most accurate value for it.
There are certain areas of the home that cannot be included in the above grade, heated and cooled living area. Most appraisers use the ANSI standard when measuring a home for an appraisal. If the square footage you use is different that what the appraiser who is doing the mortgage appraisal uses then there could be a big difference between his/her value and what the home is under contract for. This could cause a deal to fall through because the home does not appraise.
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.
Active listings, aka: competitive listings, are something most people don’t consider. If there are other similar homes for sale that are priced more competitively and to the market than yours they’re probably going to sell more quickly. If you want to sell your home then you better get a more accurate list price that reflects the current market, or it will never sell.
Real Estate Agent Perspective
In order to get a good perspective on the subject of pricing a home correctly I reached out to someone in the real estate industry who is selling homes successfully every day. Bill Gassett is one of the best real estate agents in Grafton MA who has been selling homes for the past twenty nine years. I knew Bill would be a good choice based on his knowledge of the business.
“Thanks for the opportunity to share my thoughts with your audience Tom. As you know there is nothing either a real estate agent or seller can do that’s worse than overpricing their home. Unfortunately this happens quite a bit as witnessed by the myriad of price reductions that take place on a daily basis.
Pricing is an art and numerous agents do not have the proper training on how to accurately gauge market values. Unless you have years of experience under your belt it is easy to make the mistake of overpricing a home. There are of course a few ways to minimize the chances of this occurring. A real estate agent can often times mentor with someone else in the office who has far more experience pricing homes properly. I am not sure why more agents don’t do this more often. This is great for that seller who is reasonable and wants their home priced where it should be in order to attract a buyer in a relatively short period of time.
On occasion however it is possible to run into a seller who either doesn’t trust a real estate agent’s judgment or for whatever reason has a number stuck in their head they think they can achieve. For difficult clients like this it might be wise to suggest getting an appraisal done by a professional. The beauty with this is there will be no bias. There won’t be a bunch of real estate agents competing for a listing who may let their better judgment get in the way by suggesting an unrealistic price. By hiring an appraiser you are getting an independent third party who can provide an accurate assessment of value.”
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.
Having this type of mindset can result in overpricing the home and not selling it. The home must be priced to the market or potential buyers will pass over your home in favor of the ones that more accurately reflect the market.
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.
A pre listing appraisal will have a basic floor plan sketch in them, however you may be able to upgrade that sketch to include placement of walls to help buyers even more. An appraisal can help reduce confusion when it comes to knowing more about the house you are trying to sell.
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.
If your stale listing didn’t sell, and was on the market for an extended period of time, it may have some stigma attached to it. When buyers see this they may feel they can lowball you since you may be desperate. However, if you make them aware of the fact that the new price was arrived at via a pre listing appraisal they’ll know they don’t have a leg to stand on.
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.
Do you have a stale listing right now and you’re not sure what to do about it? If you have any questions that I can answer for you, feel free to contact me or if you’re ready to order an appraisal call me now and we can get started. Please leave a comment below and let’s keep the conversation going. As always, thanks for reading.