New Listing - Single-Story Home in West Covina (2110 E Thackery St)
- Thread starter usctrojancpa
- Start date
NEW -> Contingent Buyer Assistance Program
Agreed, all of my listings this year are only offering 2% for the buyer agents. No need to offer anymore and I'm seeing more listings offering 2% vs 2.50%.
Not only did I give the appraiser closed comps in the high $700s/low $800s of home that needed renovation but I also gave him an itemized cost list of upgrades that the seller spent in Feb 2021 (approx. $60k). Not only didn't the appraiser make the proper adjustments for closed comps for the upgraded but he selected closed comps that were 3-4 months old and made minimal adjustments for the increasing market but I also gave him the back-up offers of $848k and $851k. For some reason the guy just used the listing price, all of us were shocked when we got the appraisal and the value came in at $750k. Luckily the gap was small enough for the seller to fill to get the buyer to the same place on the loan side.
There is this one that sold for 750k a month ago. This home is bigger in terms of sq ft. Lot is also roughly the same. The appraisal doesn't seem too off if this sold one month ago. This one also is remodeled.https://www.redfin.com/CA/West-Covina/2034-E-Olin-Pl-91791/home/7956804
There were a few other ones like this one that I gave the appraiser...
https://www.redfin.com/CA/West-Covina/1131-S-Donna-Beth-Ave-91791/home/7962322
Regardless, it didn't matter what it appraised for because appraisals are rear view looking and we had 3 offers ranging from $848k to $853k so that was the approx. true market value and closed for a net price of $848k to the seller after the $5k credit to the buyer.
Even though the property closed a month ago, it really event into escrow 2+ months ago. I understand the dilemma that appraisers have but they also have tools such as adjustments to bring the value of a home up like a condition adjustment and a market time adjustment (i.e. add 1% for every month that a comp closed ago). However, someone has to be first one to set the new comp standard whether it be a financed buyer or a cash buyer.
We listed that low to get as many people seeing the home as possible and get multiple offers very quickly because the home was vacant so time was money for the seller. There were over 40 buyers that viewed the home in total. The seller and I thought we would have ended up around $800k +/- but we were both surprised by the number of offers that we received. I guess when I sent out the multiple seller counters for best and final and let all of the agents know that we had 25 offers and told them that we had 7 offers over $800k so it really motivated the buyers that wanted the home, especially in the top 3 buyers who came in around $850k. This listing just proves that a turnkey home that is nicely staged can end up selling for what seem to be crazy prices and in this market that is absolutely no downside in underlisting a home.
woodburyowner
Well-known member
I think one of the most interesting data points of this listing is that the buyer agent commission is set to 2%. Why people are still offering 2.5% is beyond me.
usctrojancpa
Well-known member
woodburyowner said:
Agreed, all of my listings this year are only offering 2% for the buyer agents. No need to offer anymore and I'm seeing more listings offering 2% vs 2.50%.
usctrojancpa
Well-known member
Ok after 25 offers and most of the buyers responding with counters, the seller has selected a buyer to move forward with and we have opened escrow this afternoon. Special thanks goes out to SGIP for helping to vet the top buyers.
usctrojancpa
Well-known member
Got word from escrow that we officially closed/recorded (LA only records in the mornings). The sales price was $853,000 or $103,000 above the list price. There were 3 buyers who offered between $848k to $853k so it was close. We did run into a speed bump of having the appraisal come in at $750,000 which was stupid given the significant renovations made by the seller but we were able to bridge the gap by the buyer putting almost 30% down and then the seller providing the buyer a credit of about $5,000 to pay off their PMI to put them at the same place as if the appraiser came in closer to the list price. Congrats to both the buyer and seller.
usctrojancpa
Well-known member
Cares said:
Not only did I give the appraiser closed comps in the high $700s/low $800s of home that needed renovation but I also gave him an itemized cost list of upgrades that the seller spent in Feb 2021 (approx. $60k). Not only didn't the appraiser make the proper adjustments for closed comps for the upgraded but he selected closed comps that were 3-4 months old and made minimal adjustments for the increasing market but I also gave him the back-up offers of $848k and $851k. For some reason the guy just used the listing price, all of us were shocked when we got the appraisal and the value came in at $750k. Luckily the gap was small enough for the seller to fill to get the buyer to the same place on the loan side.
sleepy5136
Well-known member
USCTrojanCPA said:
There is this one that sold for 750k a month ago. This home is bigger in terms of sq ft. Lot is also roughly the same. The appraisal doesn't seem too off if this sold one month ago. This one also is remodeled.https://www.redfin.com/CA/West-Covina/2034-E-Olin-Pl-91791/home/7956804
usctrojancpa
Well-known member
sleepy5136 said:
There were a few other ones like this one that I gave the appraiser...
https://www.redfin.com/CA/West-Covina/1131-S-Donna-Beth-Ave-91791/home/7962322
sleepy5136
Well-known member
That one is 12.6k~ sqft lot tho. Crazy how someone would buy that house for 830k for $500 sq/ft. But the one I sent you is definitely a mimic of the one you help sold. So I wouldn't be too shocked that it did appraise at 750k.USCTrojanCPA said:
usctrojancpa
Well-known member
sleepy5136 said:
Regardless, it didn't matter what it appraised for because appraisals are rear view looking and we had 3 offers ranging from $848k to $853k so that was the approx. true market value and closed for a net price of $848k to the seller after the $5k credit to the buyer.
sleepy5136
Well-known member
Appraisals are rear view looking, but as mentioned, the sale I gave was only one month ago. To say that the true value is roughly 13% higher after one month is a bit excessive. The fact that a similar home is now selling for 13% higher than the previous month is a problem and an appraiser isn't going to appraise a property higher simply because there are offers that may justify it. They would need multiple home sells to justify the value.USCTrojanCPA said:
usctrojancpa
Well-known member
sleepy5136 said:
Even though the property closed a month ago, it really event into escrow 2+ months ago. I understand the dilemma that appraisers have but they also have tools such as adjustments to bring the value of a home up like a condition adjustment and a market time adjustment (i.e. add 1% for every month that a comp closed ago). However, someone has to be first one to set the new comp standard whether it be a financed buyer or a cash buyer.
Hugo Township
Active member
Congrats on the sale. I have to ask - why did you list at 750k given the conversation you're now having about the appraisal coming in "low" at 750k?
usctrojancpa
Well-known member
HMart said:
We listed that low to get as many people seeing the home as possible and get multiple offers very quickly because the home was vacant so time was money for the seller. There were over 40 buyers that viewed the home in total. The seller and I thought we would have ended up around $800k +/- but we were both surprised by the number of offers that we received. I guess when I sent out the multiple seller counters for best and final and let all of the agents know that we had 25 offers and told them that we had 7 offers over $800k so it really motivated the buyers that wanted the home, especially in the top 3 buyers who came in around $850k. This listing just proves that a turnkey home that is nicely staged can end up selling for what seem to be crazy prices and in this market that is absolutely no downside in underlisting a home.