Deciding on a selling price (agents, square footage, for sale, value)

[Clay Lady]

The appraised price for our home was so far below what we have invested I am wondering how to decide on a fair selling price. There was no added value placed on the metal roof, flagstone patio, goldfish pond with a waterfall, or cement driveway. The 30'x50' shop is finished and insulated - with heat and air. The value placed on it was only a couple of thousand. The houses shown as comparable on the appraisal did not compare in beauty at all. I want to be fair - but not lose nearly all of what I have invested. Please help - I need advice.

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[gentlearts]

Did you get three separate opinions? If so, and they are all in the same ballpark, you just aren't being realistic.

[Racelady88]

A lender will only finance what the property will appraise for.

[F22Lady]

There's a possibility you may have added more to the house compared to the others in the neighborhood and effectively priced yourself out of the market. All those perks and extras won't mean a thing if the comps for similar square footage, Bedrooms and Baths are less than what you expected your improvements to add to the house.

Prime example: I know a couple who purchased a 700 SF condo in a heritage building in ByrdPark. It sold for just under $160K. Client pretty much gutted the unit and wanted to go for the WOW factor and put in all this extraneous stuff that wasn't necessary, especially since it was originally going to be a rental. Bear in mind what they paid for it.

So, they turn around and decide they want to sell it, but because they put in granite counter tops, hardwood flooring, new appliances, a Euro washer and dryer, repainted and arched out a pass-through wall, they listed it for close to $225K thinking they were going to get that. Big laugh!

Reality check - an 1100 sq ft top floor 2 BR/ 2 Full BA unit with a gorgeous view of the lake sold for $195K and it had exposed brick walls and huge balcony overlooking the lake. What were they thinking? Well...after several price reductions and now it's in the $190s...the still have out priced themselves for a 700sf 2 BR 1 small bath condo. I don't care if it had 14K gold floors...they very likely won't get that price as it does not comp with similar units in that building or immediate neighborhood. $175K is more reasonable, especially since they paid under $160K in August! They have out-priced themselves in the market. They have the fanciest place, but it means nothing if it doesn't comp.

Get a second opinion even though appraisals can be expensive. It may be worth it. Though the workshop is finished and heated/cooled it's not a living space and really comes off as a fancy workshop. Not much value added to the property for that.

If for some reason your home may be difficult to appraise, I can recommend an appraiser who specializes in difficult properties - ones that usually do not have comps to go on.

Good luck with coming up with a price that works all the way around.

[Clay Lady]

Thank you each for your thoughts. There has only been one appraisal. F22Lady I may get back to you about your appraiser. The interesting thing is my house doesn't even have a for sale sign up yet. Someone drove up and asked if I would sell. The house is unique - built in 1924 - no others that age in the area.

I thought an appraisal was up to the buyer to get for their lender. Is this wrong?

Since I have decided to sell, how would I benefit from hiring a professional?

[Silverfall]

A fair selling price is what the market comps indicate the home should sell for. It doesn't matter what you want for it, it matters what the buyers are willing to pay.

So...out here in Oregon, those extras you mentioned would not get you a whole lot. The shop would if it had 220 or air compressor. Most people think that when they remodel, they are going to recoup 100% of the cost. That is not the case.

Yes, buyers typically pay for the appraiser via the lender. If you want to know a fair market price, call 3 reputable agents who have sold older homes and get their opinions.

[Clay Lady]

Silverfall, the shop has two 220 plug in places. I have fired two electric kilns to over 2000 degrees at once. It has commercial grade wiring. My air compressor is portable and I will probable take it with me.

[House Lady]

and STILL have a problem getting a decent appraisal. Appraisers are just like the rest of us. Some are better at their jobs than others. I have discussed this many times with our local appraisal board and they agree. Try calling some agents in your area that specialize in historic homes. Talk to more than one for sure. It's still no guarantee that you will get a truly good one.
That being said, if these people approached you, they may be willing to pay more than what the appraiser has stated. This is not uncommon with unique homes.

[Clay Lady]

House Lady you have addressed the issue that is my main concern. The appraiser had no appreciation for the uniqueness of this place. It even has the oldest trees in the area - old oaks 16' in diameter and the known oldest yellow poplar in the county. The house is in a rural setting - not in town with houses all around. This place has never been offered on the market. I bought it from a friend, who bought it via an family friend.

My new questions is: Should I expect to pay the agents I ask to give me a sell price? By asking and accepting their advice, do I obligate myself in anyway?

[pghquest]

Originally Posted by Clay Lady

Thank you each for your thoughts. There has only been one appraisal. F22Lady I may get back to you about your appraiser. The interesting thing is my house doesn't even have a for sale sign up yet. Someone drove up and asked if I would sell. The house is unique - built in 1924 - no others that age in the area.

I thought an appraisal was up to the buyer to get for their lender. Is this wrong?

Since I have decided to sell, how would I benefit from hiring a professional?

If someone just approached you off the street asking if you would sell, I'd question the neighbors to see if they had the same happen to them. Perhapse there is some development plan going on that your unaware of. (happens often).

If there is something going on that your unaware of, then the appraisal would need to be completed based upon those plans, because it would change the use of the property, thereby modifying the property value. (example, could it be zoned commercial?)