Hi all,

I hope this question doesn't brand me as an absolute newbie (although I kind of am), but I have to ask it . . .

I called on a property today for a client. The listing agent told me it was pending. He had received 10 offers on it (we're in a strong seller's market), so I asked him what the highest offer was.

He told me it was the price on the listing, but that the property was originally listed for $8,000 under this. He changed the list price when he changed the listing from active to pending; said it was a little "trick" that helped with appraisals.

As I said, maybe I'm just the dumbest, greenest thing out there, but is this common? Maybe it's just me, but it doesn't seem like changing the list price would help the appraisal one way or the other.

Thanks in advance!

It sounds like a scam to me!

I don't see how that could help the appraisal either. A house could be listed for 1 million dollars, but it might only appraise at $500,000. It doesn't matter what the list price is, the list price is what someone is willing to pay for it, not it's value. Correct me if I'm wrong, but that's what I think.

Maybe it's the listing agents secret admission that the original listing price was set to low?
In hot markets, appraisers will do a time adjustment if the contract price is above the list price and there are no immediate/recent comps.
Oh, I got it. It is a psychological ploy to throw off the appraiser.
p.s. (the appraiser, having access to the MLS listing history, probably can see what the home was listed for initially)

Hmmm. Maybe he was just bored and didn't have anything better to do. I don't see how it would make a difference one way or the other.

List prices are often set way low here. It drives me nuts, as buyers think they have a chance, but nah. I can't tell you how many bidding wars I've gone through, usually without success.

Another fun aspect of this market: sellers often require waiving the appraisal contingency.

Does what this agent did seem a bit crooked? I haven't quite figured out if it harms anyone, but it just doesn't feel right to me.

rediva, where are you talking about?

I'd rather not give exact location. Let's just say southwest U.S., but not L.V.

I've seen agents do this. It helps them show better "stats". For instance, you can say you got 99% of list price, which may impress sellers when you actually overpriced it initially.

"It helps them show better "stats". For instance, you can say you got 99% of list price, which may impress sellers when you actually overpriced it initially."
I'd say I got over 100% list price, would that not sound better?

okay, nevermind

Hi,
The appraisal don't look at the current, pending listing to appraise the property. They only included closed transaction. Most likely the agent got an offer which scratched appraisal, home inspection all good contigency...we call it clean contract with no kick out. In such a scenario it helps to price other homes in and around the neighborhood. Unless this agent farms or has most listing in the neighborhood i don't see how he can be benifited from the listing. He can proof next door neighbor how high he got for this listing....

Ritu


Ritu

100% over list can sound better, but if you do it a lot, it means you're underpricing properties. We'll often show over 100% list price when the buyer is doing zero down with a buyer assistance program, but most times, you won't get over list unless it's a seller's marker or you're underpricing. If an agent is being slick enough to stack their stats, they often try to come just under 100% so it doesn't raise as many eyebrows.

On the apparaisal form is an area that aske "listed price". When the list price is less than the actual agreed sales price, it draws a "RED FLAG" with the underwriters. A lot of them have a tough time approving the over the listed price, no matter what the market bears.
It has been done over the past 30+ years, especially in fast appreciating markets.