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Won’t Last Long! Priced Below Market! Priced Below Appraisal!
January 25th, 2007 categories: Tampa Real Estate, Homes For Sale in Tampa, Tampa Market Conditions, Tips for Sellers
The headline represents various terms often used in marketing materials prepared by someone trying to sell real estate, whether it be an agent of a brokerage, or the homeowner. But if you’re going to use these phrases, be prepared to update them.
Here are some recent examples I’ve come across while researching properties for clients.
- “offered at GREATLY BELOW MARKET VALUE- appraises over $600,000 per owner!!” (Priced at $389.9k for over 6 weeks)
- “Priced below market” (188 days on the market)
- “priced below market value for quick sale” (27 days on the market…)
- “Priced below appraisal for easy deal” (133 days on the market)
- “PRICED TO SELL!!.. BEST VALUE FOR THIS NEIGHBORHOOD!! Priced below appraised value for a quick sale” (46 days on the market)
- “This home is priced below appraised value” (at current price since November ‘06 and $26k higher than it was priced just before that.
These phrases can all be effective, but “market value” is a moving number that moves at various speeds, and it’s not moving in the sellers’ favor right now. Such is the case with our current market conditions. “Market value” and “appraisal value” are subjective numbers based on what has happened in the recent past.
What someone paid for something last month has less meaning on value in a down market as compared to a market with rising prices. Sellers need to be keenly aware of what homeowners with similar properties are asking, and price their homes at a point where buyers will see value.
Just as most sellers like to price a little higher than the comps in a seller’s market, pricing lower than the comps in a strong buyer’s market can be effective. At least if the goal is to actually get something sold. But nobody wants to leave money on the table.
So in this current market, terms such as “priced below market value” or “priced below appraisal”, and other similar terms have little meaning to most buyers. In the end, a buyer will only purchase a home at a price at which that buyer sees value based on information gathered by their agents or themselves. Sellers need to price it right when they place their home on the market. It’s not so easy when there are such few active buyers looking for a home.
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