What Makes Home Values in Your Neighborhood “tank”?

August 24, 2012 at 3:07 pm Leave a comment

by: Maria Hass –

Home values are neighborhood-specific. Twocommunities next door to each other can be valued differently – and sometimesby a lot – depending on location, amenities, neighborhood appeal andmore. Some neighborhoods hold their values better while others continue todip. Here are some reasons why homevalues in your neighborhood may dip:

1. “Motivated Seller”– This type of seller will lower the price of the home sooner to sellquickly.

2. Short Sale – Sellers whoshort sell their house often do not get any money from the sale of the house.They merely want to save their credit. Based on this premise, the sellerdoesn’t care how much the house sells for.

3. Realtor Pricing – Someshort sale Realtors price the listing too low in order to get an immediateoffer or multiple bids without considering the effect on home values in theneighborhood. Sometimes, a Realtor may have an investor friend who will onlypurchase the property at a great deal. It is a practice that is frowned upon –but it does happen. In some cases, the Realtor is not familiar with the areaand may price the home way below market value. It’s always important tohire someone who works the area frequently.

In my neighborhood for example, myneighbor down the street listed the house with a Realtor who priced the home at$20,000 less than fair market value. It is the same model as my home. Now, myhome is worth $20,000 less than before, thanks to the incompetent Realtor andthe seller who didn’t care. This is nothing less than infuriating,because it is totally avoidable.

On the other side of the coin, aseller or Realtor of a short sale or REO may initially overvalue a house. Theresult: the home sits on the market without any offers. Tired of waiting, the seller’sprice is dropped to a level that is less than fair market value to solicit anoffer.

4. Marketing –
Below average marketing by the realestate professional could result in the house not getting any offers. Forexample, a house in my neighborhood was listed for weeks without pictures. PerARMLS, listings should have at a minimum of one exterior photo within 4 days of posting on the MLS. I reported the listing to the ARLMS. Soon after, thephotos were posted and an offer came in. The house, which I thought would havesold for $275,000, sold for $235,000 – less than what smaller houses inour neighborhood previously sold for. Due to the negligence of the Realtor toinclude photos with the listing, the house sat for months without an offer.

Finding a knowledgeable Realtor to sell your home isessential to keep home values in the neighborhood stable. Unfortunately, sellersleave the community and no longer care about what happens to the home values ofthe neighborhood. As a good neighbor, you could recommend a knowledgeableRealtor to your seller neighbor, thereby helping keep your neighborhood’shome values up.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate. Tags: , , , .

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