Another Reason to get a Pre-Listing Appraisal

Just the other day, I received a phone call from a Mortgage Broker friend of mine. Yes, appraisers and Mortgage Brokers are still allowed to be friends.

He wanted my input on a situation in which one of his former clients found themselves.  Let’s call them the Utley’s. (For the privacy of the parties involved, I will not use the actual names, streets, pricing or house photo in this post.)  The Utley’s currently have their home listed for sale in Springfield Township, Montgomery County for $345,900.  There home has been on the market for 39 days and they have an offer on the table for $339,000.  The Utley’s are concerned about whether or not they should accept an offer this “low”.

I began buy pulling up the information on the Utley’s home in the MLS and public records.  It is a nice 1939 colonial with three bedrooms, 1.5 baths, approximately 1,500 Sq.Ft.  A very common home in this area.

Then, I took a look at the sales and listing activity in the immediate area for similar homes.  What I found was surprising.  The last three sales in the neighborhood in the past year sold for $370,000, $370, 000 and $412,000.  There are currently two competing listings in the neighborhood listed for $370,000 and $469,900.  The home listed at $469,900 was a larger, four bedroom that was completely renovated, probably not the best comparable.

However, there was also one pending sale right around the corner from the Utley’s.  This house was last listed for $339,900 but, it lacked a powder room and was roughly 220 Sq.Ft. smaller.  It had also been on the market for over 160 days with an original list price of $364,000.

After looking at this information, my question to my Mortgage Broker friend was “why did they list it so low?”

By listing at $345,900, the Utley’s are basically telling the market “Hey, this is my pie-in-the-sky, hope I can get it number…but, I am probably willing to take less!”  The reason they are receiving “low” offers is because they apparently under listed their home, based on available market data.  They (and their agent) may have shot themselves in the foot.

To compound the issue, it turns out, the Utley’s agent is a “friend of the family” (probably not for much longer after this experience) that is a licensed agent but, who is not very familiar with their neighborhood.   In the end, the Utley’s may be leaving thousands of dollars on the table or may have to re-list at a higher price.

This is a perfect example of why Sellers and Agents need to have a Pre-Listing Appraisal completed prior to listing a property.  A Pre-Listing appraisal can assist Sellers and their Agents maximize their selling price without over or under pricing.  If the Utley’s and their Agent had an appraisal of the home done prior to listing they might have developed a different price point and might not be in a situation where they are entertaining such “low” offers.

For information on The Coyle Group’s Pre-Listing Appraisal services, please call our office at 215.836.5500 or visit this link.

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Comments

  1. You have highlighted the importance of Pre-Listing Appraisal very well. Really nice to read.

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