Sellers and Real Estate Agents Top 10 Mistakes In A Buyers Market Part 3 of 10

Sellers and Real Estate Agents Top 10 Mistakes In A Buyers Market Part 3 of 10

My Real Estate Blogs seem to be rattling cages. Do I need to see a Real Estate Counselor? Hey! There’s no such person so I will just have to express myself in the http://www.NoHoldsBarredRealEstate.com Blog.

In a Sellers market, a coat of paint and new carpet may let you get away with adding an additional $2,000 - $10,000+ in increased value for your house, depending on location for the purchase and sale of your house.

In a Buyers market, a coat of paint and new carpet may only increase your value $1,000 - $5,000. Yeah, I know, each City has there own market and these figures may not apply to you, but if they do and you don’t like it then tough. Either way, you can expect a low ball offer of up to $20,000 or more on your home.

The only way to really avoid these low ball offers is to head over to http://www.SellNowWithoutListing.com

Mistake # 3

Actual value vs. cost of repairs and updates:

There are 5 types of Values that are most common in the Real Estate arena.

1. Wannabe Value - A Seller adds 100% of their fix-up costs to the current market value or appraisal. A Seller claims their neighbors 5 bedroom, 3 Full baths 2 story Colonial that sold for $250,000 is why they are asking $250,000 for their 3 bedroom, 1 ½ bath 1 story Ranch. A Listing Agent agrees with the Sellers high asking price, just so they can get the listing. An Appraiser over values or under values a property because of their financial interest with the property or the company that hired them, etc.

2. Fair Market Value (FMV) - are PROVEN Comparables of what you can expect a typical Buyer may pay for your type of property including condition and other factors that have sold within the past 1 or 2 years in your area. This is what Appraisers look at and the honest ones will be in your house taking notes so they can make their adjustments for the other comparable properties.

3. Loan Value - is an amount a Lender is willing to loan on a property. If the Lender approves a Buyer for 80% of the Loan to Value (LTV) based on the appraised value of $100,000 then the Loan Value would be $80,000.

4. Insurance Value - is an amount that the structure can be insured for and normally representing the replacement costs with modern materials, which can be highway robbery so be smart, learn and compare notes.

5. Assessed Value - is for property tax which is also common to be over inflated values because we need to rip you off so we can meet our increased budget for our corruptive spending habits.

Bottom line, your house is only worth what somebody is willing to pay for it, Only AFTER Closing. Now this shows the real value of the house which is the Market Price. The new Market Price is now being used in comparables with other properties in your area for establishing the Fair Market Value.

And your new $15,000 garage only gave you maybe $5,000 in additional value or the new $50,000 1 bedroom addition gave you maybe $20,000 in additional value, etc. This is the reality in Residential Real Estate. Except it, deal with it and move on.

As an Investor talking to greedy Sellers through their showing, I asked my secret question and the Sellers dropped the price down $60,000. No, here is the WOW part! I still had an additional $100,000 to get them down just so I could be in the area of the actual Fair Market Value. As a Serious Investor, these Sellers were a complete waste of time. I’d rather sit in a corner and stare at the wall while looking stupid than to talk to these types of Sellers

Sellers, DO NOT add extra large amounts for vacations, bills, retirement, etc. You may fool an uneducated Buyer into a contract. But what will the Buyer do when they receive a call from their Lender telling them the appraised value is $50,000 less than the contracted purchased price? Yep, you just lost a serious motivated Buyer in a Buyers Market, valuable time and money, all for being greedy.