You have seen them, homes that have been built by the same builder. This pertains to tract homes located in many of the new subdivisions and suburbs around major cities.
Generally, you will have multiple home builders wanting to build homes in areas where their research shows profit being possible. Their numbers related to cost and profit are going to depend on a huge number of factors, too many to mention on this article. Plus, it’s a different subject matter altogether.
One of the things that comes to surface, in the tract home systems, are those homes that are under contract or have recently sold. How do those types of homes and how their prices compare with those homes, matching other similar homes, which are being offered for sale? “Active Real Estate Listings“.
The homes, that are apples to apples in comparison, same builder, same year built +/- 2 years, same square footage, same bedrooms, same number of bathrooms and similar square footage regarding the lot, need to be evaluated. The ones that have “Sold” – aka “Closed Escrow” are the only ones that most appraisers will use to compare with others which they are evaluating for value.
The aforementioned is experienced realtor valuation of a tract home. For the custom or luxury homes, for where there are no closely related homes/estates, those are evaluated in an entirely different way – fyi.
A word about most appraisers and appraisals. During the appraisal process, most appraisers will stop at the price which was offered on the property. It’s very rare that an appraiser will exceed that value. On the other side of the coin, it’s not very uncommon for an appraisal to come in lower than the offered amount.
What it really means
For the real estate that is in escrow, either pending or backup status (meaning under contract), the price reflected in the MLS is not the “offered amount” or the amount they accepted the offer at. The price showing online is also not allowing for the “concessions” which maybe offered to the home buyer on behalf of the home seller. “Concessions”, can be things like reductions in lieu of repairs. Termite adjustments, home inspection repair requests, closing costs, and more.
Why the price maybe changed by the seller’s agent
In rare cases, when a seller’s agent get offers exceeding their listing price or fair market value, the seller’s agent will modify the multiple listings service showing the “accepted offer” price when they change the status of the home to being under contract.
They primarily do this to show off. They will then start a doorknocking campaign or a mailing campaign showing how wonderful they are in hopes of finding other sellers who want to utilize their services.
The sold price
However, most times, the price you are seeing in the Multiple Listing Service, on the real estate syndication websites and on other real estate related sites is not the “accepted offer price”. The “sold” price does not get posted until closing and will allow for the discounts, changes, concessions and other items modifying the original listing price to the closed “sold” price.
I’m Connor T. MacIvor and I’m glad to be at your service. I work hard for my real estate clients and I write a lot of articles that dispel the rumor from the truth when it comes to real estate, the handling of and hiring the best representative with regard to. Please share this article with you and yours. Please reach out to me when you are ready for my assistance, consultation and representation services.