Probably the thing I hate most to do is give a seller bad news about the value of their home. They call me to find out what there home is worth because they need to sell, having high expectations and the belief that THEY know the true value of their home. I am just being called in to justify their price. Sadly, most of the time, the seller is way off on what the real estate market value is. Of course, going in, I don’t know what they think the home is worth. My job is to do the research, find the comparables, and “run the numbers”.
Recently I was called in for such a task. The seller wanted me to tell them what their home was worth in its current condition and for the amount of square footage. Luckily the town they were located in was one in which the real estate market was pretty stable and popular, but it had taken a hit. Finding comparable homes that had sold in the last six months was easy.
I sat down with the couple after they toured me through the home, and proceeded to inform them of market value. When I do this, I not only go over sold statistics, but also what is currently active on the market. In this case, the homes that sold were under a certain price point and had sold in a matter of a few months. However the homes that were actively for sale were above this price point, all above 200 days on the market, a couple being close to a full year, with multiple price reductions. These homes were simply overpriced.
It was pretty obvious where they needed to be in order to sell their home. The numbers don’t lie.
I could tell right away by the silence of the room that they were shocked. The number I had just told them was $50,000 less than they had thought their home was worth. It was clearly obvious from the comparable data their number just wasn’t possible. The next question I was asked was whether I felt the market would come back soon to give them that $50,000 increase in value. Unfortunately I had to tell them that no, it would not be coming back anytime soon, and it could take years for the area to start appreciating again. The current real estate market value for their home just dashed their dreams of moving on.
I hate being the bearer of bad news, but I would rather tell a home owner the truth, than lie to them about the value of their home (as sadly some agents do) just to get a listing. All I can do is hope that they appreciate my honesty, and keep me in mind when they decide it is time to put their home on the active market in the future.