Valuation too low
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Thread: Valuation too low

  1. #1
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    Valuation too low

    I'm selling my house myself with comfree. I've renovated the entire house, it has been a big job and it complete modern with high ceilings, it is outside of the GTA. Because i removed the ceiling for the high ceiling the square footage is low. Also another wall is added for the insulation so i lost another 100sq ft.. Because of this i think the agent assessed it lower than expected about 20% less. The thing is the house is beautiful but i think the agent doesn't value the high ceiling. I had one showing today and the people were blown away because all the houses are country style and mine is modern. I actually added 5% to the asking price comfree suggested. I am starting to think this agent is just 1) dumb 2) trying to get me to sell it cheap and fast so it looks good for his company.
    There is another house down the street selling for 15% more than has more square footage but old style but has been for sale for 6 weeks and no offers. I think my area is better too. I guess i can hold out for higher offers?


  2. #2
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    An RE agent is motivated for the sale to get the commission, so they will want to either 'lowball' or set at market, the listing price. How long has the house been listed? If it's been on the market a few weeks, I'd suggest the listing price is about correct....otherwise you would have had multiple showings so far and perhaps offers. A listing agent is supposed to show you 'comparable sales' so that you can make a judgement on the listing price (given upgrades, location, configuration). I always start circa 5% higher than comparable sales (not listings) in the immediate area and then willing to accept a bit less. The last 2 houses I sold in Calgary, one I sold for right on list and the other 1-2% below list. It is up to you whether you want to hold for an offer at list.

    Be careful though about value beliefs. Homeowners often have an unrealistic view of what they think their house is worth due to emotional attachments, upgrades that may not boost resale, personalization, etc. Few have the ability to be objective about it. What is beauty in the eyes of the owner may be lipstick on a pig to someone else. Examples for an 'average' house: Deficiency on square footage, less than 2.5 baths (on the average house, meaning small to no ensuite and no 2 piece powder room), less than 3 (or 4) bedrooms, noisy street, backing on to commercial/retail, etc. If you truly are torn (disconnected) about its market value, get a formal appraisal done and let the appraiser know you are trying to set a fair market price.
    Last edited by AltaRed; 2017-06-17 at 12:53 PM. Reason: spelling

  3. #3
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    As AltaRed notes, the realtor should offer up recent comparables, tell you what they think you should list for and what it will sell for, but ultimately it is your call. Some sellers are motivated for a quick sale, others are motivated by getting top dollar, etc.

    IMO, in an active market you should get a bunch of showings in the first week after listing, if no offers come from that you are probably asking too much. You should at least get a low ball or two that allow some negotiating to occur.

    If you know your plans ahead of time, spend the previous few months tracking comparables off of realtor.ca. That way you know the list and the approx time they stay on the market (you won't know final sale price but your realtor will).

    We sold one this month, realtor suggested a listing price that was exactly what I had in mind. They thought we might have to settle for 2% below list. There were ~10 showings over the first ~3 days. We got a low ball (-4%) the same day it was listed. That allowed us to indicate to other brokers that we had an offer if their clients were serious. That provided another offer the day after listing that was 2.2% above list and was accepted, as well as a third 'backup offer' in the event that the one on the table didn't close.

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  5. #4
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    Make sure the realtor shows you all comparables, not just a selection of them (to support a lower price).

    I own a lot of properties, the assessed values I prepare depend on who I'm talking to. For example when I'm talking to a bank to get a loan, I'm looking for the highest assessment I can get, so I pick certain comparables. When I appealed the taxes with the city, I pick the lowest comparables. The difference between those two, on actual properties I own, can be upwards of 100% of the value (I've got a property that was assessed at both $70k and $140k).

    The only way you ever know the real value of a property is when someone cuts you a cheque, until then it's only a guess. You never know what some fool is willing to pay either, and you only need to find one fool.
    I'm not JustAGuy (without spaces), or Donald, or <insert name here>.

  6. #5
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    I had the first real showing today. They really liked it spent a lot of time, asked question about roof and electical etc. Looks like they are ready for an offer. Like i suspected i am selling too low. What should i do? Maybe tell them i am only accepting offers in 1-2 weeks time? Just get the offer then let it expire, don't say anything, play hard to get?

  7. #6
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    It bit late now. If they meet list and have no conditions attached then it is sold. Financing and inspection are common conditions.
    Countering above list or delaying hoping for a higher offer would be unscupulous IMO.

  8. #7
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    Are you serious, you are telling me i can't just let the offer expire? What about the agents commission, can i just tell her no commission even though i agreed in the listing to offer up to 2.5?

  9. #8
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    They can't force you to sell unless you have already signed back the offer.

  10. #9
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    Quote Originally Posted by markomark View Post
    Are you serious, you are telling me i can't just let the offer expire? What about the agents commission, can i just tell her no commission even though i agreed in the listing to offer up to 2.5?
    I would say you can let the offer expire, unaccepted. But, as you seem to recognize, you might well be open to the realtor's claim to a commission. Usually the listing agreement signed by a vendor obligates the vendor to pay a commission on the agent bringing forth an offer at the asking price. However, if the offer is subject to unusual terms, such as requiring you to carry paper on the deal, then the entitlement to a commission will not arise if you do not accept.

    Scruples aside, if you see it as likely that the prospective purchasers are going to present an offer at full price or better, but less than what you really want as a sale price, better to recruit the agent to the cause and agree to cancel the listing before any offer comes in. Then you can enter a new listing at a new price.

  11. #10
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    Comfree might have a different contract form. From Wiki

    The ComFree network offers different flat-fee service packages to help homeowners sell their homes. Basic packages include exposure on ComFree.com, lawn signs, and a personalized consultation with a sales rep (depending on location). The more premium packages offer additional advertising support. Depending on location, a competitive market analysis may also be available.[9] In Alberta and Ontario, the ComFree Commonsense Network brokerages enable homeowners to list their homes on REALTOR.ca through a board’s MLS system, and allow them to access owner-directed services such as advice on appraisals, and legal and administrative aspects of the home sale in addition to marketing support.[4]

    In Saskatchewan, ComFree provides flat-fee services via a “for-sale-by-owner” model[9] to homeowners who want to sell without a real estate agent.[10] In Alberta and Ontario, the services to homeowners are provided by ComFree Commonsense Network brokerage, a brokerage duly registered in each of those two provinces under the applicable real estate/brokerage act.[4] In Manitoba, the services to homeowners are provided by ComFree Commonsense Network broker, a brokerage duly registered in this province under the applicable real estate/brokerage act.[11]
    We don't know what package of services the OP purchased. The OP should know the Ts&Cs of what he has signed, especially when it comes to a full price offer without conditions.


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