My Home Is Worth What???

It is no surprise that typically people put a higher value on their home than most people are willing to pay.  After all it is home to them.  Unfortunately with the down market over the past few years, this happens now more than ever.  Recently I had a client contact me and stated he is looking to move out of the area within the next couple years and instead of waiting until then to sell, he would like to sell now and then rent, so when he is ready to move he won't need to wait for the home to sell.

The problem is my client, Joe, paid in the mid 200's for his home he put a large down payment and put a considerable amount of money into replacing, repairing and upgrading the property.  I asked Joe, What do you think your home is worth? Joe stated " I am sure I can get $190,000."  Knowing the neighborhood, I was cringing when I heard this.  I told Joe, I would do some research and get back to him in the morning.  As soon as I got back to my office, I began a comparative market analysis on Joe's home. It was not what Joe was looking for.  Joe is a great guy and wanted to get him his price but with all the short sales and foreclosures in his neighborhood, the highest recent sale was $129,900 and there is currently a home listed $144,000 and considering Joe's pool and improvements, the best and absolute highest he could list for is $160,000 and he needs to be prepared to lower the price if it does not move.   I was concerned I was going to offend Joe when I broke the news.  I called Joe the next morning and asked if he was available to meet for coffee and crunch some numbers. Joe agreed. As soon as Joe arrived at the coffee shop, he looked at me and said "I already know".  I was relieved.  Joe told me he did some online research himself and was able to see the numbers.

The good news is that Joe was not offended with what I was able to find. Joe has decided to stay in the home for now and hopes the numbers turn more in his favor over the next year or so.  The bottom line is the price of a home is dictated by the market not what a real estate agent says they can sell it for.  Any real estate agent can say they can get any price for a home just to get you to list with them.  I run my business on honesty and integrity and not afraid to be truthful.