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Greenback, what I was trying to point out is, as much as there are possible ways to calculate sold comparables, personal circumstances are pretty much impossible to measure and will probably lead to inaccurate results.
Value is based on socio-economic behavior. Economics is a social science. Real Estate Appraisal is property economics. I am not trying to argue with you, I am just trying to inform.
Real Estate Appraisal is not all about math (calculating). Math only makes up a small percentage of what is considered to be significant. We apply econometrics.
Also, what was sold was sold, so one's concern should be about current competition. At least this is the way people see it in many countries. It was just a different perspective.
This is why we analyze current market behavior and compare it with the recent past, as well as the long term past. Trends and patterns are deciphered, read, and interpreted.
I don't see it as a different perspective. I see it as right on the money. You are correct.
Yes, it is very good for you since you are still here.
Ah, this is all very unfortunate. I should have specified that my post was not in reference to the immediately previous one, so that is my fault. If you re-read the whole thread, I think one particular person may well leap out at you as fitting my description. Sorry.
I don't think you are necessarily wrong on what you are saying, but I don't think your advice is something that the average person who visits this forum is going to understand, or be able to apply to their situation.
Yes, the calculation of a home's value is complicated, but it can be approximated in far simpler terms. The OP isn't asking what a house is worth, but simply how to tell if it is way off the mark. They don't need to know that the house is worth $125,762.59. It is helpful to know that $160k is too high.
The OP isn't asking what a house is worth, but simply how to tell if it is way off the mark. They don't need to know that the house is worth $125,762.59. It is helpful to know that $160k is too high.
I understand.
I never implied she needed an Appraisal. I did say, after the OP'ster's second comment, that "personally" I would want to Appraise it (in response to her second post). I would be able to see more than just what the OP had noted. I also said that her questions would fall under 'consulting,' which doesn't have an estimate of value as the main objective. She presented a problem -- consulting allows us to solve many problems. But, seriously, I am not going to sit here and consult over the Internet -- I am simply providing information and opinions.
I gave the OP a lot to read before I mentioned that I personally would like to Appraise it. Of course I would like to, it is just part of what I do for a living. It is common for Appraisers to say, "hmmm, I would like to Appraise it."
A chat about comparable came up and, there was a moment when I defended my position. Believe it or not, value will eventually come up, and it did so in this thread. Comparable properties are used for more than just determining value, though.
I fully realise what the OPster's question was. I know that it doesn't need an Appraisal. I wasn't offering her an Appraisal or suggesting to have an an Appraisal. However; personally, I know what can be found if an Appraisal was mixed in. I talk to home owners and consumers all the time (daily) - they are part of my clientele; I don't have to convince anyone that they need an Appraisal -- an Appraiser's scope of work is very broad, which doesn't include an Appraisal. The general public is smarter than professionals give them credit to be; matter of fact, I have noticed a trend of home owners and consumers on this forum that appear helluva lot smarter than the Realtors who frequent
"...house is worth $125,762.59." <---- that is ridiculous. This is not how Appraisers present an estimate of value.
With all due respect, Lacerta, even though some one doesn't get what I am saying, at least they know where I stand. Not everything is solved by an Appraisal, it can be solved via consulting or other venues. But, like I said, I am full of information and I would like nothing more than to share it with the "general public." Truth is hard to come by too, and I have a lot of that to share, as well.
Ah, this is all very unfortunate. I should have specified that my post was not in reference to the immediately previous one, so that is my fault. If you re-read the whole thread, I think one particular person may well leap out at you as fitting my description. Sorry.
well, I am sorry then too. I thought you think I was being pompous by telling my story with a lender's appraiser.
well, I am sorry then too. I thought you think I was being pompous by telling my story with a lender's appraiser.
I am the pompous ass, dressy
By the way, I enjoyed your post, although the appraiser in your story appeared to have offended me indirectly. I hope you follow through on what we talked about The less scum out there the better.
And, you are correct, an Independent Real Estate Appraiser would have performed competently and ethically. I applaud you for being upset and acknowledging the difference between an 'Appraiser' and an "Independent Real Estate Appraiser."
The problem is that 6 months might BE the current average
days on market for the price range and location you are looking
at. So that might not mean the property is overpriced.
I would assume that almost all houses that take six months to sell did not end up selling for the original asking price.
That is, a house originally asking for $300k, might have experienced a $10k price reduction every month until it sold
for $240k. At that time, the house had only been on the market for one month or less at the sold price.
You cannot say that the house has been on the market for six months when the price has not remained constant.
A house that is 20-30% overpriced cannot be considered to be "on the market" by any serious buyer.
If that's the case, my 22-year-old car -worth $1,500 - is certainly "on the market" for $5,000!
Quote:
Originally Posted by Miaiam
... the concept of "sold comparables" simply does not exist, ...
... if seller A wants to sell bc he needs the money
quickly and is lowering the price substantially, ...
While there is a chance that seller A is pricing below market, such a price is referred
to in statistics as an "outlier" and doesn't effect the average or median very much.
While it is likely that the "seller A group" prices their property "at a low price"
it is extremely unlikely that they price it very far below "sold comps."
Why would they? If you price it to sell in two weeks, it will sell.
There is no reason to price it very much below "market."
I'd look at the rents as well to help establish a baseline. How much would a similar house rent for in the neighborhood. Also, use a tool like Redfin (or whatever) to get a sense on what the outstanding mortgage balance is.
In my neighborhood, some desirable properties haven't sold because the building is in litigation and no one could get a loan. The price was right. There of course also could be a back story. A good appraisal would be a good plan, even at this stage of the game.
Every market is not the same. Vegas and many of the other markets got crushed because those markets were fake. Sounds like the OP is in one of those markets. You have to ACTUALLY SEE THE PROPERTIES you are competing with and do the math. It doesn't matter what formula you have. It's only worth what someone is willing to pay. Are there properties selling in your area for 600k? Why would you call a buyer a sucker? Were you suckered into buying the house? Many greedy people got hurt in this fiasco and so did some honest average joes.
I think it is worth what a basket or (baskets) of demand will pay for similar properties (along with adjustments). One seller and one buyer do not make a market.
I believe properties will become overpriced once tighter regulations on the flow of funds have been realised and/or fully acknowledged. The prices will react late, allowing for many properties to sit in denial. Although properties are still over priced, I believe there will be an even larger gap from reality.
There are numerous reasons why it isn't a good time to buy. And, there are numerous reasons why it isn't a good time to sell. However; there are moments of equilibrium, when supply and demand 'reason' with each other. Overall, stagnation is predominant in my opinion. From what I am observing across the U.S. and locally, I see large amounts of stagnation.
I also see that reality is difficult to accept for many, as well. I'll be honest, we need more of a down trend than anything. Even though the larger markets were hit with artificial intelligence, there is an external factor that is already saturated across the board. The ripples are felt, but are not willing to accept the worse.
When funds are tightened, the supply will grow due to demand being shrunk. This hurts in and out migration. Not only funds tightening, but inflation on necessities (such as gas and food), and the affects from job loss. All these trends working together can cause the market to be over priced.
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