From: jfox@hooksett.East.Sun.COM (John Fox - SunExpress IR)
Newsgroups: misc.invest.real-estate
Subject: Re: Selling your own home
Date: 6 Oct 1992 14:52:40 GMT
Organization: Sun Microsystems, Inc.
Distribution: world
Reply-To: jfox@hooksett.East.Sun.COM
NNTP-Posting-Host: hooksett.east.sun.com

In article 4790@tivoli.UUCP, dfavor@logan.tivoli.com (David Favor) writes:
> John:
> >Are you saying a broker is going to contact the listing and selling agents of
> >each comp to gather such facts, only to come up with a fair price? I can't
> >see that happening in more than a few isolated incidents.
> 
> the Broker/Appraisers that I've spoken with use this technique. based on
> information gained by this process 'adjustments' are made to each sales
> price to bring it more in line with other like sales. this includes situations
> such as freinds/relatives selling amoung themselves, straight assumptions
> and purchases from distressed owners (foreclosure, transfers, medical bills,
> ect...). if the Broker you work with does not check with other Agents when
> creating a comparable you may want to consider interviewing another Broker.

That's all well and good, but say for instance the price derived from all
this work turns out to be 5% higher than what the buyer's bank's appraiser
comes up with? Now the sale can't happen unless the price is adjusted, or
the buyer forks over more down, etc.
My point is that all that work is meaningless *unless* all parties involved
in a transaction use the same method when appraising.
> 
> John:
> >That brings up another point. Circumstances which make a sell less
> >conventional that usual are no longer being tossed out as valid comps.
> >When I had my land I bought at appraised, I was told auction prices were
> >now being considered in the appraisal process. I nearly shit. I was told
> >as more and more sales are made in what was consider unconventional ways,
> >they become the rule rather than the exception, and therefore have to be
> >considered... Anyway....
> 
> it is up to the Broker/Appraiser how an appraisal is made. I don't think
> that 'unadjusted' distressed sales such as auctions are considered in
> many appraisals, but I could be wrong... that is an odd thought... if such
> situations were common in a particular area then it might be valid to
> consider them. without knowing the reasoning behind the inclusion of this
> information it would be hard to swallow, for me. I'd be interested in why auction
> prices were considered... if you get a chance to ask. thanks.

What I eluded to above as to why auction prices were consider was that the
majority of land sales over the past year were from auctions in my particular
area. There were few "conventional" sales from which to get comps. (When you
think about it, auction prices really make more sense, given the number of
foreclosured properties that end up at auction, and that's what lenders are
concerned about - what can I get for this property in a hurry).
There were 2 or 3 fairly large subdivisions that were first engineered in the
mid-late 80's.  When things dropped, sales stopped. The owner couldn`t make
the payments w/o selling lots at mid-80's prices, so the banks and/or FDIC
took over. They happened one after another over a 12 month period, and no one
in the right mind bought land "conventionally" during that period. Thus, the
only comps came from those auctions.

> 
> John:
> >They really don't have to. If a FSBO doesn't wish to do all this research,
> >all they have to do is have an appraisal done. Around here they cost 200-300.
> >If that gets you a price by all the factors your appraiser uses above,
> >it's certainly money well spent, and a heck of a lot less that the 5-7 percent
> >brokers ask for.
> 
> a Broker/Agent provides more service than doing an appraisal. I'm curious,
> have you ever sold a property yourself? one of the most challenging aspects
> of completing a Real Estate transaction is assisting a Buyer in securing
> financing. I am constantly amazed at how easily a closing can fall apart
> because of qualification details. ah, the Keystone Cops do closing. the
> financing details are what adds high entertainment value to closings. :-)

I sold a condo in 85 myself. It was a piece of cake (as was selling anything
back then). Financing wasn't an issue with my buyer. 

> 
> John:
> >Banks won't grant loans w/o an appraisal. They use them to determine if the
> >property is worth what the buyer paid (or at least enough to insure their
> >required LTV). If I use the same source as the banks to determine a fair
> >price to sell my house, isn't that about as accurate as you want/have to get?
> 
> yep. the only acception to this rule I've seen is on conventional and jumbos
> where the buyer brings a large sum of money to the table. in the cases where
> the bank can easily figure they are in a secure position their concern about
> LTV is minimal. but this happens very infrequently.
> 
> >There are reasons to use brokers, but arriving at a selling price for a
> >house is not one of them.
> 
> I don't understand this... I take it that you see some difference between
> a Broker/Agent and an Appraiser. the requirements for aquiring a real
> estate license are the same for all real estate professionals. whether an
> individual specializes in sales, property management, appraisal, or whatever
> is a matter of choice. those individuals that become licensed appraisers
> (in Texas) have to take 2000 hours of education (I think this figure is
> correct). now it is obvious that an individual that has this level of
> education, and the experience that goes with it, would probably provide a
> better service than an individual that specialized in sales. however, to
> hire a licensed appraiser will cost much more that having a Broker/Agent
> do the same job.

My point was in response to those who believe you can't sell your house
yourself because you need a broker to set (and get) the best price for
your house. I'm saying why pay thousands for a broker, when you can get
an appraisal done for a few hundred. I'm not saying hire an appraiser to
do a broker's job, just pay him/her to appraise your property so you know
you have a fair price. From there you are on you own. It's just in terms of
determining price, one certainly should not feel compelled to list with
an agent/broker.



John



















































Newsgroups: misc.invest.real-estate