I've been laughing for a few days about this, so I thought I would blog about it... Granted, the Dallas market does not follow the norm of the "Nationwide" market that the news is always talking about. We never had a bubble and prices have been fairly steady for the past few years, and almost flat the last couple of years.
With that said, one of my husband's co-workers bought a house last year for $184k. Just over a year later, he decides he wants to buy a house with his new Realtor girlfriend so they list his house for sale. His girlfriend is a fairly new idiot, I mean Realtor, and according to the MLS has only closed 8 transactions in 3 years. So, even though she wants to say she's been in the business for 3 years, to only have 8 transactions, she's very much still GREEN and has a lot to learn. Most of her sales have been in the $75-100k price range.
Anyway, she lists "Bob's" houses for $249k!! I did say he just bought it for $184k, right?? The area he lives in is seeing about a 3% appreciation and he put about $5-7k of updates into the house. He thinks his house is made of Gold and apparantly she agreed, and listed it for the outrageous price.
The weeks go by and he continuously tells my husband about all the showings he's having. Oh yeah? Where are your offers? Last week an offer came in. An offer that he thought was a low-ball and it took them 4-5 days to actually negotiate to a contract. I just kept telling me husband that he can argue all he wants about what he "wants" for the house, but it won't appraise. Apparently, the buyer got fed up with countering back and forth, and I guess the buyer's agent knew it wouldn't appraise either, so they finally just agreed on Bob's price because they knew the price would reduce down anyway...
Bob gets all excited that he has a contract and tells my husband that I don't know what I'm talking about and got a contract for $243,000!!! Yeah, $243k!! That's only 2.76% off list price which is average for the area... Fast forward and the appraisal was on Thursday. House doesn't appraise!! Bob spends the next few days saying he's going to get a second opinion because there is no way he is going to lower his price... but wouldn't you know it, the second opinion that he wants, he is going to have to pay for!! Yes, he's too cheap to spend $350 on a second opinion.
Yesterday, my husband comes home and says Bob decided to go ahead and sell the house to this buyer for the appraised amount. I asked what it appraised for, but Bob wouldn't tell my husband. It must have been VERY LOW for him to be that embarrassed to not say... but what's even more sad is if he spent the $350, he might have been able to get a second opinion slightly higher to save a couple of thousand dollars. I guess the numbers didn't make sense to him or his idiot, I mean agent.
I'm counting the days to see it closed in the MLS so I can see the sales price!! My guess is there is no way it appraised higher than $220k. No freakin' way!! LOL!!!
The lesson here is, it doesn't matter what you WANT for your house. It matters what it will APPRAISE for and what the buyer can BUY it for. Price your house correctly, and you won't have embarrassing problems like Bob!