Here’s what can go wrong…..

Watching the home sale prices continue to increase in many neighborhoods of Philadelphia and suburbs...

Hearing the stories of multiple offers and houses being sold immediately upon listing for sale has been remarkable (considering the cost-of-living increases in our area).

Buyers paying the difference between the sale price and the appraised property value is a strategy that continues to be common.

This is why many home sellers are taking note and taking matters into their own hands.

But, here's what we see happening as a result...

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 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 home sale stats for our market.

Most property sellers do not get an appraisal before they list their home for sale by owner.

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, or family member

^^ This is all totally normal.

But it can also be inaccurate and misleading.

Quite often, my opinion of value is much higher than the sale price of a privately sold property.

True.

Surprised?

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.

If my opinion is different than the sale price, I ask myself why.

Then, I look to see if there is anything I may have missed.

Because appraisers are human, so I will always double-check myself.

Fortunately, I have an amazing team that I work alongside, which enables us to research and collaborate, making sure we don't miss anything.

Once I confirm I have considered all of the relevant info, I explain the reason for the difference in appraised value vs sale price (if any).

You'd be surprised how often my opinion of market value is significantly higher than the 5-6% the seller believes they have saved in realtor fees.

Instead here's what's really happening:

The FSBO sellers are:

• losing money

• spending time doing all of the legwork of selling their house

• missing documents and skipping procedures that result in prolonging settlement

I completely understand wanting to save money wherever possible.

And there is no judgement here at all.

After all, I routinely share ways that can save money. It’s one of my favorite things to do.

I'm only here to let you know 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.

We have many clients who are real estate agents, investors, and homeowners looking to gather information to make informed decisions.

And I enjoy being able to provide the data they need, in exactly the way they need it, to make their life easier, less stressful.

Feel free to reach out anytime!