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I was just going to suggest that we have no way of knowing what, if any, improvements and/or upgrades have been done inside the house since it was last purchased. Perhaps kitchen and bath(s) have been gutted and replaced? Flooring replaced? Floor plan opened up? Custom closets installed? If so, the increased price may make perfect sense.
One of the reasons I hate comps is because each house really is unique, and you are almost never comparing apples to apples.
As an appraiser will tell you, comps are the most important factor in determining value in a neighborhood.
You take 3 homes on a average closed in less than 90 days (less time if possible). Then each home that has been sold is compared on a feature by feature basis, with an adjustment made for differences between the two homes. One having another bathroom, and the price is adjusted. Or another bedroom, a fireplace in one and none in the other. Adjustment made for condition is that is made at time of doing the comps. If one is doing it right, the 3 homes will adjust in price to be almost exact.
I have seen where the 3 comps, will adjust to as little as $10 between them, and the adjusted price of the target home will be seen immediately.
What a home was purchased for a year or more ago, has nothing to do with the current market value. And the circumstances of sale, may have allowed the home to be sold way below it's value a year ago, and it would be worth much more today.
Price per square foot, is not an important factor as to the current value of the home. It is a secondary factor indicating the value of homes in the neighborhood, but is not the determining factor in setting the value of one particular property. Too many amateurs think it is something that it is not.
There is a certain factor in real estate business. It is called, "Buying The Listing". The industry has even been taught to use it, in some classes on real estate and in books. It means, the agent will say it should sell for $500,000 when other agents have told the owner the home is worth $400,000. Greenhorn sellers will go for the higher price. As the books taught, you go back in a few days, and prove to them with comps, that it is only worth $400,000 so the price is dropped. Two many Greenies fall for this tactic and the agent has another listing, which he will bring down in price a few days after the listing is signed.
Price per square foot, is not an important factor as to the current value of the home. It is a secondary factor a certain factor in real estate business. It is called, "Buying The Listing". The industry has even been taught to use it, in some classes on real estate and in books. It means, the agent will say it should sell for $500,000 when other agents have told the owner the home is worth $400,000. Greenhorn sellers will go for the higher price. As the books taught, you go back in a few days, and prove to them with comps, that it is only worth $400,000 so the price is dropped. Two many Greenies fall for this tactic and the agent has another listing, which he will bring down in price a few days after the listing is signed.
So the agent/owner in the OP bought their own listing?
Just curious of what strategy would someone have for listing their house way over comps of the neighborhood? A house recently hit the market and the owner is also the listing agent. The comps in the neighborhood are $160-$170 per sq & yet this house is listed at $200 sq ft? There is nothing that this house compared to others has. The person bought the house last year and is wanting a 30% increase over what they paid- that is extreme. This house will be fun to watch to see if it ends up sitting for a long time with the occasional price drops- I guess it depends on what your goals are, if you don't really care if you sell or not then you can ask anything you want & if someone wants it bad enough or foolish enough to pay the premium?
They are doing it because they are stupid.
They will learn the lesson eventually and the price will come down or it will get taken off the market.
There is no explaining stupidity and there is no fixing it either.
There is a certain factor in real estate business. It is called, "Buying The Listing". The industry has even been taught to use it, in some classes on real estate and in books. It means, the agent will say it should sell for $500,000 when other agents have told the owner the home is worth $400,000. Greenhorn sellers will go for the higher price. As the books taught, you go back in a few days, and prove to them with comps, that it is only worth $400,000 so the price is dropped. Two many Greenies fall for this tactic and the agent has another listing, which he will bring down in price a few days after the listing is signed.
how long ago did you take this class? What book did you read that said this, and when was it printed? And are you asserting that they taught Realtors to suggest a list price that was clearly 20% above a CMA? And can you tell me how many days is a "few"?
Don't get me wrong - I agree that there are agents who ask "what did they tell you it was worth?" and add up to 10% to "win the listing". And "get a price reduction in 3 weeks".
I just want to know the classes and books, and the use of the terms in the present tense.
Just curious of what strategy would someone have for listing their house way over comps of the neighborhood? A house recently hit the market and the owner is also the listing agent. The comps in the neighborhood are $160-$170 per sq & yet this house is listed at $200 sq ft? There is nothing that this house compared to others has. The person bought the house last year and is wanting a 30% increase over what they paid- that is extreme.
Maybe the comps are too low, or aren't the correct comps.
Last year we sold a house where properties in the immediate neighborhood were priced in the mid-200s.
However, if you looked at a slightly larger area (i.e,. the same school district) many similar houses were selling in the mid-300s. I couldn't see any reason why this one shouldn't bring the same. So we put it on the market for $359K and quickly got several offers close to that.
Now the neighborhood is regularly selling in that range. In my opinion it was just underpriced.
Maybe they don't really want to sell but are looking for clients and this will help them get some inquiries that they can then sell another house to. Wouldn't be the first time someone did this.
I'm not a realtor, just a homeowner who looks at things from that perspective. I'm assuming they have nothing to force a sale, so if they hit the jackpot, great. If not, they keep living in it.
There is a home in our neighborhood that is just out of scale of everything around it. Beautiful home, several acres. Been on the market for about five years at just over $800,000 which is probably realistic for this home and land by itself. Everything else around is in the $70K - $200K range. I just can't picture someone who is looking for that kind of home also looking in that kind of neighborhood range.
Just curious of what strategy would someone have for listing their house way over comps of the neighborhood? A house recently hit the market and the owner is also the listing agent. The comps in the neighborhood are $160-$170 per sq & yet this house is listed at $200 sq ft? There is nothing that this house compared to others has. The person bought the house last year and is wanting a 30% increase over what they paid- that is extreme. This house will be fun to watch to see if it ends up sitting for a long time with the occasional price drops- I guess it depends on what your goals are, if you don't really care if you sell or not then you can ask anything you want & if someone wants it bad enough or foolish enough to pay the premium?
Not sure why many people on C-D seem to go crazy when price per square foot is brought up. OP said the house is listed 30% over what it was purchased for last year seemingly without many changes - seems pretty clear that it is overpriced regardless of whether or not you're looking at price per square foot.
But I think the other responses pretty much answers it. Probably doesn't really want to sell but is just fishing for a high price. OP, does the owner/listing agent have other listings? If so, how are those priced?
That 30% mark may or may not have any bearing either.
Just curious of what strategy would someone have for listing their house way over comps of the neighborhood? A house recently hit the market and the owner is also the listing agent. The comps in the neighborhood are $160-$170 per sq & yet this house is listed at $200 sq ft? There is nothing that this house compared to others has. The person bought the house last year and is wanting a 30% increase over what they paid- that is extreme. This house will be fun to watch to see if it ends up sitting for a long time with the occasional price drops- I guess it depends on what your goals are, if you don't really care if you sell or not then you can ask anything you want & if someone wants it bad enough or foolish enough to pay the premium?
At the risk of insulting agents, not that it really bothers me, some will list a house at whatever price the seller wants.
The ones I know, several, who do so do it so they can get "Most Listings" awards. They rarely win the "Most Closings" trophy.
Some also do it in the hopes a fish will come in and get hooked at the price.
Some sellers have no idea about comps, someone already mentioned that many have an inflated sense of what their house is worth. Some of that is magical thinking.
If a seller bought at the top of the market they are just now, maybe, getting close to what they paid then in many areas. That doesn't work for them because they think they just have to make money on their house.
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