Real estate General topic

[paulsharvey]

The value comes from the offer you're willing to accept. You'll see all sorts of asking prices, both too high and too low. But when a buyer comes along with an offer, and the seller accepts the offer, that's the value of the property!

... and because I just know someone is going to ask: When asking price is too low, there are often multiple offers, from which the highest or most attractive becomes the accepted value.

With that, the method of payment affects which offer is "better" too. I took a $4k hair cut for a cash offer, waiving inspections over a FHA. VA is probably the least attractive from a sellers side. They almost always give a laundry list of "too do" down to screens in windows, touch up paint, and even mismatched outlet covers.

 

[Mi-Troll]

The value comes from the offer you're willing to accept. You'll see all sorts of asking prices, both too high and too low. But when a buyer comes along with an offer, and the seller accepts the offer, that's the value of the property!

... and because I just know someone is going to ask: When asking price is too low, there are often multiple offers, from which the highest or most attractive becomes the accepted value.

That's true, but you didn't mention anything about where to start and that's what I'm trying to understand.

 

[WinterDeere]

That's true, but you didn't mention anything about where to start and that's what I'm trying to understand.

Got it. I've learned from being through the process a few times, that there are realtors at both ends of the spectrum. Some will suggest a starting price that's much higher than any reasonable offer will ever be, either because they just don't know the local market, or because they're willing to wait a long time and adjust the price many times before finally selling the property. Some other realtors will under-price the property, either because their whole business model relies on moving a lot of property very fast, or because they aim to receive multiple offers and generate a bidding war.

Last time I sold a house, I had realtors recommending starting prices over a nearly 2:1 range, so decided to spend an evening or two doing my own comp's using recently sold listings on Zillow and Realtor.com. With just a few hours of work, I came up with a pretty high-confidence price that was in the middle of what all these realtors were recommending, and we listed there. Our final settlement price was pretty much right where my own comp's predicted it would be.

 

[paulsharvey]

So, real estate agents can be fantastic in certain niches and terrible in others. You dont want the guy that sells $750,000 4500 sq ft homes in an HOA, selling your double wide on 2 acres. You also dont want the reverse.

One guy I knew pretty well, (no longer in the business, retired), specialized in cheaper, near town, homes. He basically could tell you, the husband works a semi skilled trade in construction, the wife is in health care, their kids are 6 and 3; just from the house.

So, too a high end specialist, a 3/2 manufactered, they just might low ball as a crappy low end home, and not realize that very well might be a $450k home.

Land... thats the worst; its hard to find people who understand land. Yeah, folks who specialize in Ag can tell you the CSR score on that field, but not the ATV trails, or the buck scores. That guy that can rattle off average buck harvests, likely doesnt know a soy bean from a peanut.

 

[kenmbz]

We have lots in my town sell from 50K/acre to over $300K an acre, land is way too complex.
For houses, we got as many recent sales as we could and tried to pick some that could be compared.
It wasn't easy, but doing your homework is required.
Also what time of year the house goes on the market can have a big impact.
Spring in an areas that sells to families is one that helped us twice.
We had to work well into the night for weeks to prep the house so we did not miss this timeframe. Houses that came on the market a few months after ours sat for quite a while.

We found Zillow to be fine in areas where the houses were all similar, but it varied too widely for us to consider it useful in the sale of our last two houses.
It's good when buying a house to look at history and taxes though.

 

[paulsharvey]

So, our old neighborhood, paved roads, formerly an HOA (dissolved), had a paved air strip, fly in community; and it was a mix of $1.5m homes, some single wide manufactered, many many double wides, 2-5 acre lots; and was always hard to put a finger on the "average". You get something like a 800 sq ft single wide, with a 16,000 sq ft hanger, paved taxi-way to the run way; its hard to price.

Edit: I guess my point is, you would get a agent that knows about airplane people to sell that. Let horse people sell "equestrian" properties, ect. They just understand it more than the average agent.

 

[thclimer]

I have looked at Zillow many times and compared the houses on my street which were all built within a year of each other and of similar size with the exception of mine. My house is about 1000 sqft to 1500 sqft larger and is the second largest house on the street, Zillow's listing of the price per square foot is drastically different, about a $70 per square foot delta.

My house is $40 per square floor less than my next-door neighbor's house for near identical looking houses, my garage is larger as well as the number of bedrooms, etc.

I noticed that all of the houses were similar in size but with a delta in price and without Zillow knowing the detailed differences between them, Zillow is using some sort of Min-Max pricing with a mean value for houses on this one street, regardless of the size. I noticed that the one house that is larger than mine, is priced per square foot lower than any other house on the street, putting it at the max value for the street, not by much and twice the size.

Using the average per sq ft value of the other houses would put the one large house at nearly double the price of every house on the street, except mine. In the end, it means that if this person sold their house, the buyer would be getting a great deal, a much larger house with the price based on smaller homes on the street.

That is really strange.

Have the houses with a higher price/Sq-Ft ever been sold and yours has not? Just wondering if they factor in people doing upgrades just before a sale????

 

[WinterDeere]

Zillow has a great algorithm, I have no doubt it's going to be the most accurate calculation method, but it's limited by the bad data going into it.

I tend to always own older homes that have seen many upgrades, so maybe what I see is worse than most, but the data from which Zillow is pulling on each of my houses is always wildly wrong. I'm talking square footage numbers that are off by almost 2x, wrong number of bathrooms, wrong number of bedrooms, year of construction off by 150+ years...

But this is all the fault of the owners and townships feeding data into the algorithm, not the algorithm itself. I always hope the data listed in comparables listings is better, and at least for new homes I'd bet it is.

 

[riptides]

Zillow has a great algorithm, I have no doubt it's going to be the most accurate calculation method, but it's limited by the bad data going into it.

I tend to always own older homes that have seen many upgrades, so maybe what I see is worse than most, but the data from which Zillow is pulling on each of my houses is always wildly wrong. I'm talking square footage numbers that are off by almost 2x, wrong number of bathrooms, wrong number of bedrooms, year of construction off by 150+ years...

But this is all the fault of the owners and townships feeding data into the algorithm, not the algorithm itself. I always hope the data listed in comparables listings is better, and at least for new homes I'd bet it is.

Agree, same issues with Zillow and data. Even our local tax representatives have issues with our properties in their databases. That data seems to float to Zillow and other applications.

Until, if ever sale time comes, I am not interested in getting it corrected. There is enough data out there to get a good idea of what you are looking at. IMHO, it does not need to be 100 percent accurate on the details. One wonders if people go into deals sight/inspection/look over, unseen.

 

[WinterDeere]

Until, if ever sale time comes, I am not interested in getting it corrected. There is enough data out there to get a good idea of what you are looking at. IMHO, it does not need to be 100 percent accurate on the details. One wonders if people go into deals sight/inspection/look over, unseen.

I went thru the correction process once. Trouble was, it takes so long that by the time all a new "Zestimate" had been calculated, I had already sold the house and moved! If you're thinking about selling, I'd probably start entering corrections at least 6 - 12 months in advance.