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Douglas Trudeau , Assoc. Broker
Prudential Foothills Real Estate
64 N. Harrison Road, Suite 160
Tucson , AZ 85748
Mobile: 520-954-2209
Contact Me

Sometimes You Have To Wonder

It doesn’t take a rocket scientist to figure out that its a buyers market, the market is far below desired level, and buyers are looking for deals. It’s not hard to figure out that pricing a home correctly in a market like this is critical if you are serious about selling. I take it you’re with me so far. Well, let me tell a story. See if you come to the conclusion, “What are they thinking?”

Working with a buyer who is a little more meticulous than others, we came across a FSBO. I know at least one person will ask what’s a FSBO, it’s For Sale By Owner. The homes in the area are selling for the high $400,000 to Low $500,000. I ran comparable sales on the FSBO for $489,000. Zillow has it, per sellers improvements, at $512,000. Off on the high side, but not terrible. The last same square footage home in the area sold for $485,000. Difference between that and the comps are not too far apart. Average per square footage for the community is $492,000.

My client is thinking offer $475,000 and see what the seller will take. Sound reasonable? Who knows, if priced right the seller may just take it. Well, its priced at $625,000. What do you think the chances were for negotiation? Let me tell you what happened, none.

This situation is a little extreme, I’ll admit. However, it points out a few things. It doesn’t matter what the seller owes or personally feels the value is. Buyers are not willing to pay more for a home only to find the value worth less down the road. Can’t blame them. Have to agree with them. Appraisers are getting beat up by lenders to bring in a reasonable appraisal. Any appraiser will tell you that the appraisal is good for the day it was written. If another sale is recorded 24 hours after the appraisal, its value diminished. If higher, God Bless that sale.

There are some good deals out there. There are a lot of over priced homes still on the market. The key is to look at the sales in the area, history of sales in the area, and determine a reasonable and fair market value. Depending on the area and volume of sales, you may have to go 3, 5 or 10% below average sales to attract attention and sell. In other areas you may get away with pricing right at the average price. A lot depends on location, location, location.

Trying to sell a home for over $135,00 above market reeks of insanity. Who in their right mind would want to pay that much? I can’t think of anyone. I don’t mean to pick on FSBO’s, there are plenty of over priced homes listed by hungry agents. In today’s market, what is priced right today may be over priced tomorrow. Being smart about pricing is the key.

This entry was posted on Friday, March 14th, 2008 at 12:35 pm and is filed under Tucson Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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