Assessment vs lisiting price for home - which one to trust?
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Assessment vs lisiting price for home - which one to trust?
We recently moved to a new home in HCOL area. We initially tried renting our previous home in the same area because of its low mortgage rate (2.2%), but after a few months without finding a suitable tenant, we decided to sell it.
We bought our previous home for 630K, and our realtor believes we could sell it for 880K. Recently, we received an off-market offer of 900K from a potential tenant who wanted to buy instead of renting. We personally thought it could sell for 930K. To get a clearer picture, we decided to have the property assessed privately through an agency, and the assessment came in at 1M. Now, we’re a bit confused and unsure whether to trust our real estate agent or the private assessor.
How can we proceed?
1. List at 930K, host the open house with our current agent, and select the best offer.
2. List with another agent near the assessment value and host the open house.
As always, thank you in advance for your opinion.
We bought our previous home for 630K, and our realtor believes we could sell it for 880K. Recently, we received an off-market offer of 900K from a potential tenant who wanted to buy instead of renting. We personally thought it could sell for 930K. To get a clearer picture, we decided to have the property assessed privately through an agency, and the assessment came in at 1M. Now, we’re a bit confused and unsure whether to trust our real estate agent or the private assessor.
How can we proceed?
1. List at 930K, host the open house with our current agent, and select the best offer.
2. List with another agent near the assessment value and host the open house.
As always, thank you in advance for your opinion.
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Re: Assessment vs lisiting price for home - which one to trust?
Don't take the chance that you give away all of your bargaining power.Panam@2016 wrote: Mon Feb 03, 2025 6:11 pm We recently moved to a new home in HCOL area. We initially tried renting our previous home in the same area because of its low mortgage rate (2.2%), but after a few months without finding a suitable tenant, we decided to sell it.
We bought our previous home for 630K, and our realtor believes we could sell it for 880K. Recently, we received an off-market offer of 900K from a potential tenant who wanted to buy instead of renting. We personally thought it could sell for 930K. To get a clearer picture, we decided to have the property assessed privately through an agency, and the assessment came in at 1M. Now, we’re a bit confused and unsure whether to trust our real estate agent or the private assessor.
How can we proceed?
1. List at 930K, host the open house with our current agent, and select the best offer.
2. List with another agent near the assessment value and host the open house.
As always, thank you in advance for your opinion.
THere is a balance between having the price low enough to attract callers, then lookers, then offers.
If you list for top dollar of what you or someone thinks, and there are no looks, no offers, no visitors, then that price is too high, or other reasons. The "true price" of selling something is what someone will put cash in your hand for it. No matter the asking price.
You want to have 10 people come to look, 5 talk it over and chat, 3 ask for details, and 1 to make a serious offer with cash in hand.
What is the price that will make that happen?
How attractive is the home?
How is the curb value and demand?
WHat about #1??
j
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Re: Assessment vs lisiting price for home - which one to trust?
I would interview three different real estate agents and ask each to provide you with a comparative market analysis showing recent comparable sales in your neighborhood and their own opinion of the market value of your house. Then decide on a listing price and sales strategy with the agent you choose.
A lower listing price makes for a faster, easier sale for any agent, so be aware that they may be biased in that direction. RE agents try to maximize the number of homes they sell, not the commission per home.
On the other hand, if they're competing with other agents to get your business, they may tell you your house is worth more than it's actually worth.
A lower listing price makes for a faster, easier sale for any agent, so be aware that they may be biased in that direction. RE agents try to maximize the number of homes they sell, not the commission per home.
On the other hand, if they're competing with other agents to get your business, they may tell you your house is worth more than it's actually worth.
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Re: Assessment vs lisiting price for home - which one to trust?
You might consider getting three successful realtors in your area to tell you their strategy / price for selling your home. Then consider picking the one you think is the best strategy.
The two estimates you have gotten so far might be accurate but often realtors will pick a strategy that will get as many prospective buyers involved as possible on the hope of bidding the price up.
Remember if you don’t like any or all offers you get for your house you can say no thank you even if it is above your asking price.
The two estimates you have gotten so far might be accurate but often realtors will pick a strategy that will get as many prospective buyers involved as possible on the hope of bidding the price up.
Remember if you don’t like any or all offers you get for your house you can say no thank you even if it is above your asking price.
Re: Assessment vs lisiting price for home - which one to trust?
What is an agency? What is an assessment?
Was it an appraisal by an appraiser?
If so, was it persuasive? Did they select appropriate comparables?
Was it an appraisal by an appraiser?
If so, was it persuasive? Did they select appropriate comparables?
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Re: Assessment vs lisiting price for home - which one to trust?
Yes, this was done by certified appraiser with formal report.bsteiner wrote: Mon Feb 03, 2025 6:39 pm What is an agency? What is an assessment?
Was it an appraisal by an appraiser?
If so, was it persuasive? Did they select appropriate comparables?
Re: Assessment vs lisiting price for home - which one to trust?
It is not clear if you already signed a contract with a realtor and/or your house is currently listed "for sale". But if you have signed, you need to keep the realtor updated as they are doing work for you (even if you are talking to others on the side).Panam@2016 wrote: Mon Feb 03, 2025 6:11 pm We recently moved to a new home in HCOL area. We initially tried renting our previous home in the same area because of its low mortgage rate (2.2%), but after a few months without finding a suitable tenant, we decided to sell it.
We bought our previous home for 630K, and our realtor believes we could sell it for 880K. Recently, we received an off-market offer of 900K from a potential tenant who wanted to buy instead of renting. We personally thought it could sell for 930K. To get a clearer picture, we decided to have the property assessed privately through an agency, and the assessment came in at 1M. Now, we’re a bit confused and unsure whether to trust our real estate agent or the private assessor.
How can we proceed?
1. List at 930K, host the open house with our current agent, and select the best offer...
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Re: Assessment vs lisiting price for home - which one to trust?
I'm a realtor. A house is not a bushel of wheat or an ounce of gold. It is unique. You are getting several options on price, as you should. I always give sellers a range, and let them choose the price. If you have time, price it high. The market will tell you it's overpriced. You are only looking for one buyer.
Re: Assessment vs lisiting price for home - which one to trust?
Another thought: private appraisers are often conducting appraisals for the purposes of obtaining a mortgage, and may be subject to a bias to land on a value on the high end.
Re: Assessment vs lisiting price for home - which one to trust?
If multiple offers are common for houses like theirs in their neighborhood a common tactic is to price it right at recent market comps or a little below to attract multiple offers and a generate a bidding war. Some markets aren't as strong as they were several years ago so that tactic may not work as well if there is less demand.
They may have a house that is difficult to find recent comps for thus the wider variation in pricing. Did the realtor present you with a market analysis to back up their assertion that it could sell for $880K? Did the appraisal you paid for cite specific sales for comparable houses? The home will sell at a price seller and a buyer agree to. No one can predict with certainty what that will be so its down to the tactics used to help reach that agreement that typically work for houses like theirs in their location. No one size fits all answer.
They may have a house that is difficult to find recent comps for thus the wider variation in pricing. Did the realtor present you with a market analysis to back up their assertion that it could sell for $880K? Did the appraisal you paid for cite specific sales for comparable houses? The home will sell at a price seller and a buyer agree to. No one can predict with certainty what that will be so its down to the tactics used to help reach that agreement that typically work for houses like theirs in their location. No one size fits all answer.
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Re: Assessment vs lisiting price for home - which one to trust?
How much bias is an appraiser free to apply?Ret2018 wrote: Tue Feb 04, 2025 6:57 am Another thought: private appraisers are often conducting appraisals for the purposes of obtaining a mortgage, and may be subject to a bias to land on a value on the high end.
We're waiting for a friend selling FSBO (no RE agents involved) to get an appraisal that they will use to determine their price.
Considered getting our own appraisal to compare, but a RE agent friend advised that appraisals don't vary by enough to justify that expense.
Appraisers are state licensed -assume that standards prevent inflating appraised value by very much?
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Re: Assessment vs lisiting price for home - which one to trust?
I just wanted to clarify on the appraisal.we did it independently to understand the current market value. The appraiser is licensed, reputable, and doesn't have any personal interest to bias for anyone including mortgage company etc. He did compare 3 recent sales in detail including lot size, sq.ft, conditions of the home etc. He doesn't even know the RE agent I'm working with. I haven't signed anything with RE agent. My guess is that he wants to sell it quickly and wonder whether he has my interests in this transaction. we are going to interview few more agents to find suitable one for us.
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Re: Assessment vs lisiting price for home - which one to trust?
Absolutely solid advice here.Robertmoore wrote: Mon Feb 03, 2025 7:23 pm I'm a realtor. A house is not a bushel of wheat or an ounce of gold. It is unique. You are getting several options on price, as you should. I always give sellers a range, and let them choose the price. If you have time, price it high. The market will tell you it's overpriced. You are only looking for one buyer.
Re: Assessment vs lisiting price for home - which one to trust?
My sister did this last year and got one really high price, one really low price, and one in the middle. She didn't want to have the house on the market for a long time and chose a price roughly in the middle. She sold it without a RE Agent to a neighbor who came to the door asking if the house was for sale. The neighbor made a feeble attempt to negotiate and paid the price my sister was asking. The sale went very smoothly.Parkinglotracer wrote: Mon Feb 03, 2025 6:31 pm You might consider getting three successful realtors in your area to tell you their strategy / price for selling your home. ...
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Re: Assessment vs lisiting price for home - which one to trust?
Go back to the buyer who already made an offer and show them the assessed price. Would you be happy with that price and no fees if they bite? What are the chances of a formal listing (with fees) generating a bidding war that will exceed the assessed value and fees?
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Re: Assessment vs lisiting price for home - which one to trust?
I would epxect the "value" of a typical house to be uncertain within several percent, say +/- 5%. More if on the expensive side or with very unique features. The quoted range seems a bit outside normal to me.
OP could consider putting it on the market for, say, 900-950, depending on how urgently he wants to sell.
OP could consider putting it on the market for, say, 900-950, depending on how urgently he wants to sell.
Re: Assessment vs lisiting price for home - which one to trust?
I don't understand what the issue is. Put it on the market and see what it sells for. What are the comps in the area? Presumably, the professional appraisal gave you the comps they used. Are they legit? If legitimate recent comparable sales are $1,000,000 and more [after adjusting for any differences], then potential buyers will have the same information, but if not, then you tell them.
Re: Assessment vs lisiting price for home - which one to trust?
Look at comparable houses in your neighborhood. Make sure you account for upgrades, square footage, etc. Then compare your assessment, the realtor's assessment, and the appraiser's assessment. As long as you are close, you should not have a problem. Depending on the market if you price it a bit low, it will get bid up. If you price it a bit high, you will get bid down. If you price it wildly high, it will just languish on the market (not a good thing) and people will wonder what is wrong with it.
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Re: Assessment vs lisiting price for home - which one to trust?
Still doesn't mean much unless you have a very good idea of each of the houses used as the underlying data points to generate the appraised value.Panam@2016 wrote: Tue Feb 04, 2025 10:26 am I just wanted to clarify on the appraisal.we did it independently to understand the current market value. The appraiser is licensed, reputable, and doesn't have any personal interest to bias for anyone including mortgage company etc. He did compare 3 recent sales in detail including lot size, sq.ft, conditions of the home etc. He doesn't even know the RE agent I'm working with. I haven't signed anything with RE agent. My guess is that he wants to sell it quickly and wonder whether he has my interests in this transaction. we are going to interview few more agents to find suitable one for us.
I saw how it worked when getting an appraisal for a refi. A few of the property listed were on the low side of things (in terms of $/sq. ft.) and dragged down the appraisal for my house. B/c we toured those properties personally, we knew why the comps sold low, but the appraiser didn't know or didn't have access to the info. One had severe plumbing issues (few toilets didn't flush) and a host of other issues (moisture stained ceiling). Another had mold issues and visible signs of mice infestation. With only five comps used, having two that are effectively outliers affected things. It didn't matter for us, b/c we weren't cashing out, but it would have mattered to others.
Other houses that seemingly appraised high have various updates. In your case, how well do you know about the interiors and finishes in the comps used?
And this is before we get to seasonal variance in pricing that occurs in some markets. And don't discount the effect of flattery leading to referrals or future business.
As others say, it's an educated guess, albeit one that is subject to GIGO when the underlying set of comps is small.
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As for how you should proceed, if you want to extract max value, list it, but you'd probably need to factor in at least $30k for commissions. If you want to minimize hassle, offer it to your tenant for $950k with the proviso that no agency fee is offered. If your market is at all a seller's market, the appraisal (even if faulty and high) would probably nudge them into accepting or countering at a price you would accept.
Re: Assessment vs lisiting price for home - which one to trust?
don't sign with a realtor, make sure the guy that offered 900K does not have a realtor and sell to him for 900K or a little more, you save 60K in real estate commissions. Have a lawyer do the contract and have the title company do the paperwork.
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Re: Assessment vs lisiting price for home - which one to trust?
There's no "right" number. Everyone is comparing your house to what has recently sold nearby that's similar. They add $20 for your extra porch and take away $100k for your lack of a garage compared to the house down the street. Your potential buyers set the selling price. In a sale we were doing, we had real estate agents give us $76k, $78k and $75k. One agent was particularly helpful not only giving us a number but telling me that if I finished off an area in the basement where there were 2 finished rooms, it would tie the 2 rooms and stairway together as all finished area. It was easy and I did it. In the end, we listed the house for $76.2k and had 2 parties fall in love with it and sort of bid against each other. We sold for $78k even. This was in a relatively slow market. So if you find someone who falls in love with your place, you can get that $1M. Do all the well known tricks. Lots of room (make all cupboards, closets, shelves have room between every item. Remove the rest), cookies in the oven to turn on to 450 when you get the warning that people are on the way and a plate of them on the table, Lights on everywhere, heat or AC very comfortable and of course vacuum about 8 times a day.
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Re: Assessment vs lisiting price for home - which one to trust?
Did the agent mention anything about expecting multiple offers? In a strong sellers' market, it's a common strategy to list the house for a little below market value to attract interest. Buyers will know the house is underpriced and realize there is a lot of competition (a mobbed open house helps fuel this conception). If the house is in good condition and desirable, the result is a lot of offers, and usually some of them are very good.Panam@2016 wrote: Tue Feb 04, 2025 10:26 am I just wanted to clarify on the appraisal.we did it independently to understand the current market value. The appraiser is licensed, reputable, and doesn't have any personal interest to bias for anyone including mortgage company etc. He did compare 3 recent sales in detail including lot size, sq.ft, conditions of the home etc. He doesn't even know the RE agent I'm working with. I haven't signed anything with RE agent. My guess is that he wants to sell it quickly and wonder whether he has my interests in this transaction. we are going to interview few more agents to find suitable one for us.
If your local market is hot, it may not matter too much if you underprice the house even pretty severely.
Also, no matter the state of the market, you can push back with the agent you talked with and ask him for his reasoning. If he doesn't show you a market analysis with comparables, get rid of him. If he does, see how his comparables differ from the ones the appraiser used. Use your own judgment to figure out which one you should trust - i.e., which houses really are comparable and which aren't. For example, if one of them used houses in a different school district with different rankings than your schools, that would probably result in an erroneous market value estimate.
Also, you probably constantly get fliers from local agents looking to drum up business. Some of them are probably names you've seen over and over again if you've been perusing listings and going to open houses. Check out their records - if they've sold 20 houses in your neighborhood over the last 5 years, they probably know what they're talking about. If the agent you talked to has never sold one in your area, be very suspicious that he has any clue about your house's market value. One of the main reasons for using a real estate agent is to take advantage of their local knowledge.
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