Common knowledge
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This bit of nonsense appeared in a Quora post in my email and I found it both amusing and illustrative of how some house sellers determine the value of their residence. Realtors can and do make mistakes valuing a house, but a homeowner who not only claims that the agents are wrong but the market is too, is … foolish.
If a realtor tells me my house is worth 380k and Zillow says 440k, who do I believe?
We bought a $600k home and had to sell a few years later. The love we put in the home should have made it $800k. But because it was a job relocation, we must have 2 agents come to provide an estimate, and both priced it at $650k. I reviewed all the comps, and thought that it was too low, and buyers would think something must be wrong with the house to be priced that low.
The house was 30 years old, but was built by a home builder who built 3 houses at most a year. Every inch of the house was crafted with fine details. The living room was paneled with fine wood panels with so much details that it was amazing. We had a pool that we kept up all the equipment (mostly new.)
Well, we had to go with their pricing, and the house did NOT sell. In the meantime, another similar house in neighborhood sold for $850k in 2 weeks. Ours sat there for almost 3 months. (Told you so!) With the relocation, the company had to buy the house from us and then sell it on their own. They eventually sold it, but I was upset they didn't listen to me, and we lost out on almost $200k. But since we didn't have to pay commission and basically broke even from our purchase price, we only “lost the time and money” we spent on all the updates.
We have bought and sold so many houses for ourselves that I have become somewhat good at valuing our house based on comps. I still stand by my estimate of that house.
Owner “knew” value was $800,000
Two different realtors came to same estimated value: $650,000
Listed at $650,000
Didn’t sell “because it was priced too low”
A “similar” house in the neighborhood sold for $850,000
His sold, eventually, for (sounds like) something slightly less than $650,000
His Conclusion:
He “lost out” on almost $200,000
My Conclusion:
The market and the realtors were right: the house was worth around $650,000, and probably sold for even less than that because it was a stale listing.
Houses don’t sell if they’re priced too high. It’s possible that somewhere, some time in the history of the world, a house has failed to sell because it was priced too low, but I’ve never seen or heard of it happening.
