why why why would they do this????

[golfgal]

That's very naive. You are apparently unfamiliar with "comps" (comparable houses used to set the value of your own home). If someone is borrowing money to buy your house (and let's face it, most people are), your house is only worth what the bank is willing to loan on it. And if comparable houses start selling for less, that means the bank will loan less for your house.

Actually, I would say you are the one that is naive. Comps are used to price your house but they mean nothing if no one buys your house at that price. You can have every comp in your town saying your house is worth $1,000,000 but if no one gives you an offer at that price, your house isn't "worth" a million. You can list it for a million but if you only get offers for $500,000, THAT is what your house is worth on the open market, period. A bank goes by the appraisal, which includes comps but is not solely based on the comps for the appraised price, for how much they will lend a buyer.

 

[DipsyDoodles]

I don't for one minute believe all the people who act like they have absolutely no interest in home resale values in their own neighborhoods.

It is not "being nosy" to care about something the affects the value of what is probably your biggest asset/liability.

While you might not have "say," not having interest is foolhardy IMO.

Lot of NASTY people making NASTY comments on this thread!

I agree! It's very important to me what my neighbors sell their houses for as it can affect the resale value of my own home. I don't feel the OP is invading anyone's privacy at all - by talking with the agent or by posting and looking for advice on this board. Also, it's quite simple to find out what someone paid for their house. Most towns have that info available online. You can also see the last sale price for almost any home on zillow.com. This particular house screams short-sale to me. They list low and get lots of interest but the bank then has to approve the sale. The bank won't approve the low price so the bidding goes up and up. Sometimes you can get a great house for a steal but the closing on short-sales can take forever.

 

[Disney Doll]

I truly believe that 5-10 years ago the housing market was grossly inflated and the deflated prices today are probably more in line of what houses are really worth. That's not what those trying to sell want to hear, but I think it's a fair observation.

My husband, who is a career realtor and currently manages an office here in our town, says the same thing.

5-10 years ago, houses like mine (a 6 room "starter" Cape) were selling for $450-500,000 in my town. There is no way in God's green earth that my house should have ever been worth 1/2 a million dollars. Never. I love my house, it is adorable, it is perfect for DH & I, but it's not a 1/2 a million dollar house on its best day. And yet, that's what many similar homes were selling for in my town back then.

Then the market "tanked"...or as my DH likes to say "normalized". He hates those crazy up markets because he knows that shortly after they start there will be a "tank" and people are going to be in deep financial trouble based on the value of their homes.

 

[tlbwriter]

Actually, I would say you are the one that is naive. Comps are used to price your house but they mean nothing if no one buys your house at that price. You can have every comp in your town saying your house is worth $1,000,000 but if no one gives you an offer at that price, your house isn't "worth" a million. You can list it for a million but if you only get offers for $500,000, THAT is what your house is worth on the open market, period. A bank goes by the appraisal, which includes comps but is not solely based on the comps for the appraised price, for how much they will lend a buyer.

I don't think you disproved my point. As you said, comps are part of the big picture. Of course they don't guarantee any type of sale price - I never said they did. I simply said it's naive to believe that it "doesn't matter one whit."

 

[luvmy3]

absolutely not! but sometimes things that are not about you do affect you. I wish them well wherever they go and whatever they do in life. at the same time, it doesn't mean I don't also want nice new neighbors and maybe a sale price that isn't quite so low. the two things are not mutually exclusive.

Wow... talk about jumping to conclusions.

Yes, I am but its not too much of a jump when you read the bolded.

 

[mrodgers]

Wow... talk about jumping to conclusions.

It is interesting how our personal character is judged by the income we make, isn't it?

I couldn't afford an expensive home. I guess my family is just unsavory.

Unsavory in the event that my wife made dinner for the neighbor every night when her husband died.

Unsavory in that when said neighbor goes away every winter to Florida, I make sure her driveway is cleared of snow on the off chance her daughter visits the house to check on things, which she does at least once or twice. Also, I make sure it doesn't look like an empty house with 4 feet of snow piled up in the driveway.

Unsavory in that when her mower broke, I spent the extra 3 hours mowing her yard for her, as her husband did for us back when we had mower issues.

Unsavory in that I helped her with her basement when it flooded from rain a few years ago.

Unsavory because we share about half our garden and fruit from the apple, peach, cherry, pear, and plum trees we have of which she also shares hers.

Such a horrible family we are, all because our income left us looking for a house that didn't cost a lot.....

 

[SaraJayne]

I agree! It's very important to me what my neighbors sell their houses for as it can affect the resale value of my own home. I don't feel the OP is invading anyone's privacy at all - by talking with the agent or by posting and looking for advice on this board. Also, it's quite simple to find out what someone paid for their house. Most towns have that info available online. You can also see the last sale price for almost any home on zillow.com. This particular house screams short-sale to me. They list low and get lots of interest but the bank then has to approve the sale. The bank won't approve the low price so the bidding goes up and up. Sometimes you can get a great house for a steal but the closing on short-sales can take forever.

You realize zillow.com is wildly inaccurate, right?

 

[NaLisa]

I might be curious and perhaps even concerned about my neighbor underpricing their home, but I wouldn't waste much time worrying about it because it's completely out of my control.

 

[Disney Doll]

I don't for one minute believe all the people who act like they have absolutely no interest in home resale values in their own neighborhoods.

It is not "being nosy" to care about something the affects the value of what is probably your biggest asset/liability.

While you might not have "say," not having interest is foolhardy IMO.

Lot of NASTY people making NASTY comments on this thread!

I agree.

Based on the info you gave us OP, my guess is they want to get out quick and have decided how much of a financial "hit" they can take on this home.

Having a new home almost ready in another town is probably their driving force. They don't want to pay 2 mortgages for a long period of time, since that could end up "costing" them much more than the $40K hit they are willing & presumably able to take right now.

$40K below the average asking price of similar homes in your area is going to generate a lot of interest and will probably get that house sold very quickly. As a PP said, it might even launch a bidding war, which might mean that even though their asking price is $40K below average, their selling price might end up beiing $20K below average. In their mind, if they were going to take a $40K loss and ended up with only a $20K loss, they might be satisfied with that.

As far as what it will do to your property value...probably not a lot. It will stick out as an anomaly among comparable home sales in your area, and most people involved in real estate (realtors, apparisers, adjusters etc.) will be quick to discern that and point it out as an anomaly. Generally with compas, the majority of pricing is the driver. If 15 homes in your neighborhood have sold for $200K and one sold for $150K, no one is going to think every house in your neighborhood should now be worth $150K based on the one $150K sale. They are going to assume that the anomalous $150K sale was :
1. a short sale
2. a sale among family members
3. a "gotta dump it" sale...the need to cash out of the house quickly for some reason
4. a sale of a house that was in need of a lot of repair in comparison to other homes in the neighborhood

 

[golfgal]

I don't think you disproved my point. As you said, comps are part of the big picture. Of course they don't guarantee any type of sale price - I never said they did. I simply said it's naive to believe that it "doesn't matter one whit."

You know, they really don't matter if someone isn't willing to pay that for your house, period. You can have 1000 comps that say your house is worth X but if no one pays that price, it isn't worth that, period. The reverse is true too, often the comps really aren't comps at all, just houses that have happened to have sold in your area--especially in a market like we have now where few houses are being sold. When we refinanced the "comps" they came up with were not even close to what our house was--they were all 1000+ sq feet smaller, split level homes, where as we have a 2 story house with an extra large lot. They noted that in the appraisal--which was still higher then what we were refinancing for so it didn't really matter but in the end, the comps were not really comps.

 

[Disney Doll]

Your home is only worth what someone is willing to pay for it. It doesn't matter one whit what the house next door sold for.

Well, that is where you are wrong but you seem to be pretty firm in your thinking so I will let your realtor explain it to you when the day comes that you try and sell your house.

 

[tlbwriter]

You know, they really don't matter if someone isn't willing to pay that for your house, period.

Yes, and YOU know that it doesn't really matter what someone is willing to pay for your house if they don't have that much cash on hand, right?

 

[Disney Doll]

You know, they really don't matter if someone isn't willing to pay that for your house, period. You can have 1000 comps that say your house is worth X but if no one pays that price, it isn't worth that, period. The reverse is true too, often the comps really aren't comps at all, just houses that have happened to have sold in your area--especially in a market like we have now where few houses are being sold. When we refinanced the "comps" they came up with were not even close to what our house was--they were all 1000+ sq feet smaller, split level homes, where as we have a 2 story house with an extra large lot. They noted that in the appraisal--which was still higher then what we were refinancing for so it didn't really matter but in the end, the comps were not really comps.

But there has to be some basis used for pricing a house, and comps are it. And even if something is not an "apples to apples" comp, the pricing of houses in your area can still give you and your realtor an idea of how to price.

ie- well, this house that is 1000SF smaller and on 1 acre instead of 2 sold for $200K. So your house, at $X per square foot and $X per acre in value, should be priced somewhere between $325-$400K. Other variables that might affect the price will be the condition of the house, the location of the house etc. It's not an exact science, by any means, but comps provide a guideline.

 

[mickey&minnie04]

our neighbors just put their home up for sale. we don't know them more than a wave in passing (they are a bit standoffish), so can't really ask, but they put their home on the market for $40k less than comps are selling for in my area (and what their realtor recommended as a price...yes, we did ask her when we saw her taking pics). and since they bought 5 years ago, at the height of the market (just like we did!) so unless someone pays over asking, they will take at least a $100k hit.

they don't have a job transfer, are only moving 2 towns over, both have good paying jobs. we are just baffled as to why price it so low. If they found their dream home over there and just want a quick sale, they could have still asked for a bit more.

am just floored.

any thoughts as to why someone would go so low?

Maybe they are short selling the house. If they are financial not able to make their mortgage payments any longer the bank can agree to sell the house for less then is owed. You said they were standoffish...how do you know they didn't put half down when they bought the house?

 

[NaLisa]

But there has to be some basis used for pricing a house, and comps are it. And even if something is not an "apples to apples" comp, the pricing of houses in your area can still give you and your realtor an idea of how to price.

ie- well, this house that is 1000SF smaller and on 1 acre instead of 2 sold for $200K. So your house, at $X per square foot and $X per acre in value, should be priced somewhere between $325-$400K. Other variables that might affect the price will be the condition of the house, the location of the house etc. It's not an exact science, by any means, but comps provide a guideline.

When we sold our house last year, our agent used the neighborhood comps as a starting point to determine asking price on our house. E.g. "This house is in the same neighborhood, constructed at same time of same materials, similar lot size, similal square footage, etc. However, they have covered parking and you don't, so that knocks $ off your home's value" and so on. Having a patio/deck, laundry room, updated kitchen and bathrooms, a commercial strip behind one house, landscaping, fireplace, extra bathroom--all those things were taken into consideration when setting the price for our home after using the comps for a basis. We didn't just average the price of the comps in our neighborhood and use that for our asking price. We also took out of the equation the house that had sold to a family member for well below the other comps and the brand new houses that were an infill development and MUCH different from the older houses in the neighborhood.

 

[Disney Doll]

When we sold our house last year, our agent used the neighborhood comps as a starting point to determine asking price on our house. E.g. "This house is in the same neighborhood, constructed at same time of same materials, similar lot size, similal square footage, etc. However, they have covered parking and you don't, so that knocks $ off your home's value" and so on. Having a patio/deck, laundry room, updated kitchen and bathrooms, a commercial strip behind one house, landscaping, fireplace, extra bathroom--all those things were taken into consideration when setting the price for our home after using the comps for a basis. We didn't just average the price of the comps in our neighborhood and use that for our asking price. We also took out of the equation the house that had sold to a family member for well below the other comps and the brand new houses that were an infill development and MUCH different from the older houses in the neighborhood.

I think you and I said pretty much the same thing in a different way.

 

[NaLisa]

I think you and I said pretty much the same thing in a different way.

Yes we did! Our agent actually did use the average $/SF of the comps and then multiplied it times the square footage of our house, since we had an addition on our home that most of the others lacked. She also considered that the addition took away some of our "outdoor living space" even though the lot sizes were similar.

 

[USAND3KIDS]

Probably because it is their house and they can do what they want with it. They could sell it for three bucks if they wanted. Maybe they are in a hurry to get away from nosy neighbors.......just sayin

 

[LBIJim]

The solution to the OP's "problem" is simple. Offer to buy the neighbor's house for $40,000 more than what she's asking. Voila!! Problem solved.

Can't do that? Too bad. Deal with it.

Jim

 

[golfgal]

But there has to be some basis used for pricing a house, and comps are it. And even if something is not an "apples to apples" comp, the pricing of houses in your area can still give you and your realtor an idea of how to price.

ie- well, this house that is 1000SF smaller and on 1 acre instead of 2 sold for $200K. So your house, at $X per square foot and $X per acre in value, should be priced somewhere between $325-$400K. Other variables that might affect the price will be the condition of the house, the location of the house etc. It's not an exact science, by any means, but comps provide a guideline.

No, there really does not have to be ANY basis for pricing. You could have all the comps in the world that say your house is worth $500,000 but you still list it for $700,000, stupid, but it can be done. Same goes the other way, if someone wants to list their house for $40K under comps, go right ahead, there is really nothing stopping them. Again, comps are just the comparable houses to your house. What your house is WORTH is what someone is willing to pay, no more, no less.