Most homes are still selling slightly above asking price (101%) and more homeowners are choosing: Sell my house myself.
Here’s what can go wrong…..
We hit a peak last year in June/July, dipped down over the fall/winter months and despite the recent rise in interest rates, the median sale prices have once again climbed back almost to where we were last summer.
The seller market is still strong.
Watching the sale prices increase dramatically over the last year, hearing the stories of multiple offers and homes being sold immediately upon listing for sale has been remarkable.
Buyers paying the difference between the sale price and the appraised property value has become common strategy.
Many homeowners are taking the fsbo route (for sale by owner).
When this happens I always ask the Seller 2 important questions:
- How do you know the Buyer?
- How did you arrive at the sale price?
If the seller’s answer is: We are “friends / family….” then I am not surprised if my opinion of value is very different from the sale price because, often there are personal circumstances in play.
But if the seller’s response is: “We don’t know each other, I advertised it via _ (enter any random fsbo site available here) because I wanted to save money on realtor fees……” then I will immediately ask – so do you believe that your sale price is equal to market value?
When I ask this question most seller’s say “Yes” and some say “the sale price is a bit lower because we saved money by selling privately”.
Here are the stats for the Median Sale Prices and the Median List to Sale Ratio.
These stats represent single family homes in the SE Pennsylvania market (counties of Philadelphia, Bucks, Montgomery, Delaware and Chester).
This does not include condos.
Most fsbo homeowners do not get an appraisal before they list their home.
This is unfortunate because an appraisal report would enable the homeowner to make an informed decision based on the most relevant data.
Instead, most fsbo home sellers base their asking price upon:
- public websites that are frequently inaccurate (ex: Zillow)
- data provided by a realtor more than 30 days ago
- opinions from a neighbor, friend, family member
^^ This is all totally normal. But unfortunately, misleading.
Quite often my opinion of value is much higher than the sale price of a privately sold property.
This is how I personally handle appraisals for sales:
I do not look at the sale price until after I have determined my own opinion after I have completed my own unbiased research.
The confirmed, accurate data that I rely upon is current as of the day I visit the house.
After I reach my opinion I look at the sale price, analyze the contract and explain the reason for the difference, if any.
And lately, my estimated market value has been significantly higher than the 5-6% the seller believes they have saved in realtor fees.
The fsbo sellers are not saving money when choosing to Sell my house myself.
Instead, fsbo sellers are:
- losing money
- spending time doing all of the legwork of selling their house
- missing documents and skipping procedures that will result in prolonging settlement
I completely understand wanting to save money wherever possible and there is no judgement here at all. I routinely share ways that can save money. It’s one of my favorite things to do.
I am only here to share what I have discovered during routine appraisal research.
The goal is to help educate and provide valuable information that will enable you to make the decisions that you feel are best for you.
Did you know there are specific things the appraiser is looking for when we are at your house?
Here’s a Free Downloadable important list of what you should be providing before or during the appointment.
Always here to answer questions and always sending all the high vibes your way.
“An expert is someone who knows some of the worst mistakes that can be made in his subject, and how to avoid them.”
Werner Heisenberg
