May 2014
By BJ Oelschlegel
In the business of real estate, the listing contract creates the opportunity for a homeowner to sell their property through the services of an agent.
The initial conversation with an agent starts with a tour of the home and a bit of fact finding. How eager the seller is to sell, what renovations have been recently completed, the square footage of the lot and the interior heated space are some of the particulars that provide guidelines for the agent. These details steer the agent’s answer to the primo question of, “what is my house worth?”
Our tax assessments have led many a seller down the wrong path. Though they were based on comparable sales at one point in time, these values no longer apply.
The value of a house is fluid. What a willing, ready and able buyer will pay for a 3-bedroom;2-bath house will not remain constant.
Our assessments are a picture in time and that time has passed. Then let’s modify the assessments you say.
The county has a budget, with a required amount of money to pay the bills. The county’s collection of taxes produces the income. If the assessments go down then the rate of tax has to go up to be able to meet the budget requirements. There is no out.
Many owners have hung onto their tax assessment values as though they were written in blood.
Another wrong turn is the listing price your neighbors put on their houses for sale. Neither source of information is based in current fact.
The only yardstick one should use to gauge the value of a home is a review of comparable sales within the last 12 months or a professional appraisal, which is completely based on the latest comparable sales.
There was a point in time when you could ask whatever you wanted for a parcel on Ocracoke. The appraisals always seemed to be within the range that was necessary for the loan, or the flow of discretionary income for a cash deal was good…and real estate was easy.
Today, the banks are tighter and folks are more protective of their savings. If you need a bank loan, the rule is that the bank will use the appraised value or the contract price, whichever one is LOWER
If no bank is involved and you are working with a savvy buyer offering cash, they will make their contract to purchase contingent on getting an appraisal and being satisfied with the outcome.
Every seller needs to compete within “the market” to realistically sell their property.
The definition of “The Market” is what a ready, willing and able buyer offers and a seller is willing to accept.
The only way to be in line with our Ocracoke “market” is to look at the prices recent buyers have been willing to pay which successfully moved a seller to go to closing.
Without being consistent with the market, you are merely advertising your property and not trying to sell it.
BJ Oelschlegel is a broker w/ Ocracoke’s Lightship Realty
….before we had a lighthouse, there was a lightship to light the way for mariners.
