by Brad Officer
on Thursday, August 12th, 2010 at 11:32am.
A home is only worth what someone is willing to pay for it and not a dollar more. The value of the home instantly changes once the purchase is completed through a closing at which time the value changes again.
In consulting with many home owners who owe more than their home is worth, we always discuss how to complete a short sale and the value of their property. Many times I'm told that they will contact the bank to find out what price they should list the property for. This doesn't work and is a waste of time.
Who determines the list price of a Short Sale?
The listing REALTOR determines the list price.....not the bank nor the home owner. Here are the steps I go through to determine the listing price:
Comparable Sales: I look at what comparable homes have sold for in the past 3-6 months. I'd prefer a solid list of 5+ comparable closings nearby or within the same neighborhood. This is a good starting point for what the real estate value truly is as it represents what other buyers have determined the homes are worth.
Comparable Active Listings: Often heavily skewed by the number of listings priced WAY OVER what they will ever be able to be appraised for, however in some cases these listings are less than the comparable sales. This happens as homes start piling up for sale within a specific area/neighborhood causing way too much supply, thus reducing demand and prices. In Jacksonville and Ponte Vedra I see this more in newer neighborhoods built within the bubble years.
Condition of Home: If the home is in complete disrepair, I most often won't even attempt taking the listing. However, If I did take the listing, I'd have to heavily discount for needed repair items.
Once the home is on the market as a Short Sale in Jacksonville, Ponte Vedra, Orange Park or the surrounding areas, the listing agent should continuously monitor comparable sales and active listings. If the agent is doing this correctly, they should be able to adjust pricing to meet the market demand on an ongoing basis.
Thank you in advance for Sharing!
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