From: dfavor@logan.tivoli.com (David Favor)
Newsgroups: misc.invest.real-estate
Subject: Re: Selling your own home
Date: 6 Oct 92 13:13:30 GMT
Article-I.D.: tivoli.4790
Organization: TIVOLI Systems, Inc.

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.

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 hearing
why auction prices were considered... if you get a chance to ask. thanks.

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. :-)

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.