Can I do this with my asking price?

cjweismanOctober 29, 2013

When listing a home, almost everyone posts a specific asking price (or sometimes a range of prices). Instead of a specific price, can I post "Appraised Price" as the asking price? My vision for how this would work is both the buyer and seller pay for independent appraisals. You take the average and that is the agreed to price. No more haggling. The seller knows they're pretty much getting the most they can get for their home without finding a cash buyer and the buyer is assured they are not overpaying for the home (plus there is good liklihood that the home will appraise). Is this a valid pricing option when listing a home?

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It would work in a very stable market, but would hurt seller in a rising market and buyer in a falling market. Appraisals use past closed sales, so they are not a perfect indicator of what the market is doing today. This past year my market was rising fairly quickly and most appraisals came in below the sales price. Lots of multiple offers and sales above list price. Also lots of cash offers.

Appraisers can also be way off, if they don't know your particular area very well.

    Bookmark   October 30, 2013 at 12:29AM
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The buyer is going to use the lender's appraisal, right? So what happens when it comes in lower than the sellers appraisal? If you take the average of the two, it will reflect a price above the lender's appraisal. Most buyers refuse to bring extra cash to make up this difference.
Why not just get an appraisal, price it 3 % above this and then negotiate back down to the appraisal price?

    Bookmark   October 30, 2013 at 6:54AM
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I occasionally see "listed under appraised value", but I don't take them seriously after seeing this one:

Fannie Mae foreclosure listed at $58K and comments said "Seller will not sell less than the appraised value of $55K"

One month later is dropped to $45K and comments were changed to "Seller will not sell less than the appraised value of $45K"

The next month it dropped to $35K and comments were changed to "Seller will not sell less than the appraised value of $35K".

It was fun to watch because I was wondering how low they would go while still making the appraisal claims.

    Bookmark   October 30, 2013 at 7:06AM
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Thanks chispa. I am assuming a market where bidding wars amongst cash buyers is extremely unlikely.

    Bookmark   October 30, 2013 at 11:14PM
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How would this work for online real estate sites? You might miss out on online searches, in which people search within a range of prices. I suppose if they searched by other criteria, such as location and number of bedrooms, they'd find you anyway. But if they include price criteria I don't know if your house would show up.

    Bookmark   October 31, 2013 at 11:24AM
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Sophie Wheeler

While you can do anything you want, any way you want, to sell you home, doing what you propose will cut any traffic to just about 0. Most people will assume that something without an actual price on it is priced out of their budget range. And won't even look.

People have to know if your home is something they can afford. They can't do that without you and your realtor going over the sold comps and establishing an asking price together. Then list it on the MLS so that buyers can actually find it.

    Bookmark   October 31, 2013 at 12:39PM
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My thinking is you can still post an asking price, or better yet a (wide) range of asking prices to cast the widest net. But add a comment that the seller will accept an offer at the appraised value with no further negotiations.

    Bookmark   October 31, 2013 at 8:11PM
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Do you actually want to sell your house? Or just play at it? It's a goofy idea that would turn people off.

    Bookmark   October 31, 2013 at 8:24PM
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Big Time Goofy.
Buyers in this day and age are mini experts by the time they are ready to make an offer.

    Bookmark   October 31, 2013 at 8:45PM
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Green Designs, Do you know that for a fact because you have tried it and could not sell the home, or are you just guessing. Because I know for a fact that it would work with at least one home buyer: me. I love the idea of making an offer I know is fair for both parties and will appraise, and not playing the "what should we offer" game, and not fretting that I overpaid and the home won't appraise. The industry is changing. Maybe this is one of them.

    Bookmark   November 1, 2013 at 8:55AM
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Sophie Wheeler

Price is the #1 seller of homes. And you're taking that information away. It's beyond kooky. It's completely unworkable in any type of business model. There's not a chance that this would work to get extra buyers to view the home, or make offers. How are you going to list it on the MLS? You have to have a hard price to put it there. The home isn't searchable or findable without a definite price on it.

It's not really hard to sell a house. You clean, declutter, take good pictures, price it right, and let people know it's for sale. Simple. A lot of people have problems doing any of those well because they are too emotionally attached to the home and don't view it as a business transaction. Either they are misguided about how well they've staged, or they're misguided about what the market says about their price, or they're misguided about their marketing method for exposure. Many times their personal prejudices work against them for the best result, whether that be obstinace against staging, or obstinace against cutting the price because of their perception of the home's "worth", or because they are prejudiced against the accepted sales process itself. They shoot themselves in the foot on the front end and never even see that because they aren't seeing clearly.

Would you go into a store looking for TV's and buy one that said it was for sale for whatever the average Google shopping price was? From $1200 to $1600. Nope. You'd want the lower price, or you'd walk. If it didn't even say what price it was but just "Google shopping price", you'd walk out of the store, convinced that they didn't know what they were doing and would soon be out of business. And you'd be right.

Like I said, you have the right to do whatever wackado scheme you want to get your house sold from offering cruise tickets as an incentive to standing on the corner naked with a sandwich sign. Just don't expect any of those gimmicks to work if you haven't done the basics correctly. And the most basic of the basics is to price it correctly for the market according your timetable to sell it. Not putting a price on it at all, means you have a very very very long timetable. As in you're willing to wait for years for someone exactly as difficult to come along.

    Bookmark   November 1, 2013 at 9:21AM
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Thanks Holly. I like your response. Very well thought out.

    Bookmark   November 1, 2013 at 10:30AM
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What about someone offering a cash deal?

    Bookmark   November 1, 2013 at 11:25AM
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Not in my neighborhood.

    Bookmark   November 1, 2013 at 12:13PM
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If you, as a buyer, are worried about not knowing what the fair market value of a home is before presenting an offer, then have your agent perform a valuation before presenting an offer. They should be doing this service for their clients anyhow.

    Bookmark   November 2, 2013 at 5:26PM
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