Why Most Clearwater FL Homes for Sale Won’t survive Naked Appraisal

Clearwater Florida – I wanted to take some time out of selling homes and share some crazy things I’m hearing and seeing on the streets. I’ve apologize because I’ve gotten behind on my articles. This is our busiest time since when it’s cold everywhere else, Florida homes and beach condos are even more appealing (I have to agree).  We are seeing things changing so rapidly here and I needed to make sure I took the time to keep you updated on what’s really happening in the Clearwater real estate market. I can promise you fact is currently more interesting than fiction. Today I want to share whats happening with luxury beach homes for sale based on our recent experiences. You may find we offer a unique local perspective because we specialize in serving only buyers in the luxury home market. In fact, the last 60 days alone our team has successfully helped 8 buyers purchase Clearwater FL homes for sale  and what we’re seeing out here may surprise many of you currently in the market to purchase a property in the Clearwater area. Part of our purpose today is also to help educate you as well as local home sellers who we hope will actually hear our message..”If  your home is overpriced it won’t survive the appraisal – so it won’t be sold!!”

Reflecting on some of the crazy things we’ve seen and heard reminded me of the story we all learned as a child of “The Emperor’s New Clothes”.  Remember the story by Han’s Christian Anderson (source: Wikipedia), where “An Emperor who cares for nothing but his wardrobe hires two weavers who promise him the finest suit of clothes from a fabric invisible to anyone who is unfit for his position or “just hopelessly stupid”. The Emperor cannot see the cloth himself, but pretends that he can for fear of appearing unfit for his position or stupid; his ministers do the same.” 

I keep running into the same mindset with local sellers and listing agents in different situations who in my opinion seems afraid to deal with the truth. Everyone seems to be pretending their home’s list price is really the home’s value today…whether we’re negotiating Clearwater Beach Condos or Clearwater Homes for sale, the story is the same – listing agents and home sellers who want to deny the real estate market facts and “hope” their home will sell for yesterday’s prices.  While buying a home is an emotional purchase, financing is based on facts not feelings.

We are also surprised to find some of the best Clearwater FL Realtors we know and their home sellers telling to us all the reason’s why they feel their client’s home is “the finest”, “the exception” and almost acting like we might be “the foolish ones” and that we must not really understand or appreciate “this home’s value” and the market. [Not]  I’ll even ask them what I’m missing? Please show me the data that backs up this price. Well I’ve yet to get any real data to change the facts all I get are “marketing bullets” and “emotions” but like the clothes on the Emperor- We can see right through it the naked facts…their desired asking price won’t stand up to an HVCC Appraisal.

Sellers seem like Realtors who will tell them what they want to hear – but is that really in their best interest? Their Realtor can even make them feel good temporarily by telling them they see ‘their fine emperor’s new clothes”. Now the seller’s pumped up and the agents get ready to “strut there stuff” with fancy brochures, marketing and explanations why other nearby homes that sold for less in the last 90 days but they don’t believe it will effect their homes value because those were:

  •  short sales,
  • foreclosures,
  • not updated,
  • smaller,
  • not on the same street,
  • (or…plug in your favorite reason here)

I can only guess they are in denial about the facts…because everyone wants to believe their listing agent can sell “the invisible clothes” as well as their home to some gullible unsuspecting home buyer. Here’s the truth, the appraiser is going to use homes that sold within the last 90 days, in the same neighborhood, with the same characteristics and up to about 50% size difference. The more closely they relate the better for example waterfront to waterfront, pool home to pool home, 3 bedroom to 3 bedroom. However with so few sales they will use the best they can find with most recent solds meaning ALOT!  Now that you know the truth what will you do with it?

Ideally the wishful seller and their agent will have potential buyers call them off the sign in the yard or contact the listing agent directly because then that buyer won’t be represented by a their own Realtor. This can give the home seller’s agents the advantage and opportunity to give them a private showing of these “amazing fine clothes” and sell them on why they just have to have it at or near the asking price.y

The emperor’s new clothes don’t work when dedicated buyer’s agents, like us, enter the picture with qualified serious buyers who are represented and we tell them the truth the whole truth nothing but the truth. When these buyer’s like your home and want to make an offer we find this is where the real trouble begins. The seller’s (often because in my opinion they haven’t heard the truth) feel frustrated and even angry because they really believe “their home is special” and it will definitely appraise for that price even though all the recent comparable homes sold says differently.  Yes, your home is special to you and even to this buyer (that’s why they want to buy it)  but it’s not worth whatever price you may be emotionally attached to and it’s not exempt for today’s HVCC Appraisal process which is based a lot more on science and less art in my recent experiences and I am seeing appraisals that are much more conservative than ever.

It was so refreshing today to read an article by Julia Fishel, a successful Palm Harbor Realtor who wrote an article that was so dead on I wanted to share some of it here…

Julia and her team market homes for home sellers and more importantly…they actually are successful selling those homes [I can only imagine some of the uncomfortable conversations she must have to have with some of their sellers – real professionals don’t pretend to see “invisible clothes” or wish for “unrealistic prices” – they educated their clients and empower them to make the best decisions in any given market].

Today she wrote, “people all the time that are shocked by the news that theirgranite countertops don’t count for squat to a lender’s appraiser.  Pinellas Home Values aren’t what they once were, and that new coat of paint or remodeled bathroom aren’t going to net you a penny more. ” [Amen Julia for speaking the truth no one wanted to say]

She also explains…”Most buyers are financed and they can’t get financing on your overpriced home! (Sorry if that stung)Any buyer using financing to purchase your home is going to need a lender appraisal.  And, by the way, appraisers CAN  use foreclosures and short sales as comparables. Since most homes are financed it’s key to understand appraisal guidelines when pricing your home.  COMPS ARE KING!” [Newsflash to all those with homes for sale… We advise all our buyers, especially those paying cash, to get an appraisal and NOT overpay for a home]

5 Clearwater FL Home Seller Myths Dispelled – The Emperor’s Clothes Exposed

We see and hear a lot of misguided sellers and agents and here are 5 of the Myths (or just plain crazy thinking) we’ve heard in the last 60 days….

  1. We know the property won’t appraise and we have a qualified buyer so we explain our concerns that the property won’t appraise only to have the seller’s agent tells us, “I know but we just need some cash buyers to come in and purchase these beach condos at this price (because it used to be worth this) and then all condo prices will rise because they can bring cash to closing and don’t have to worry about appraisals since they are not financing” [Are you kidding me – my buyers WILL NOT buy your emperor’s clothes – that’s part of why we’re in this mess – and smart cash buyers will get an appraisal as well for just this reason]
  2. Then we’ve been told, “Well our seller has “x” dollars in this home in upgrades (new roof, new windows, etc) and they need “x” dollars to sell” [Hand me the duct tape cause my head’s going to explode – what your seller needs has no bearing on the current market value – do your job and tell them the truth please!]
  3. Recently we got lots of calls about a property listed in the MLS as “an auction” for $100K knowing all along the Seller owed the bank over $700K [Are you shocked that while 100’s of people showed up to bid the bank didn’t accept any offers (which we predicted to our clients) and there were several offers of over $600K-$700K. This one is a mixed bag – I’m disappointed that other agents are doing what we believe borders on “misleading advertising”. It definitely is a great marketing ploy for them to attract buyers, especially those looking for deals I’d call “too good to be true”(you as a buyer have to ask yourself if this is that who you want representing you in a major purchase?).  For the record to everyone reading this, we do have deals and prices are back to the pre-market run up days of @2003 but we don’t typically have 2 bedroom beach condos for sale under $300,000 and if they are we find those have some kind of major gotcha like it overlooks parking lot, it’s mold infested, it’s a timeshare/condo-hotel, it’s in a cash only building that can’t be rebuilt after a hurricane, etc. Remember what your mother told you, “If it looks to good to be true, it probably it” – that’s why working with Buyer’s agents, like us, that knows “the real back-story” and are ONLY focused on protecting YOUR interests is a smart decision.]
  4. We’ve also heard from the seller’s agents just this weekend who want to disregard the short sale and foreclosure homes recently sold in their neighborhood and yet they are no longer exempt from the appraiser’s analysis and with fewer homes selling they often weigh heavily. [Get the facts – they do count and if they are the only sales they will really weight the results – maybe they haven’t sold many of their listings recently because a year or so ago that was true – they tried not to use them however today it’s SOP – standard operating procedure.]
  5. Your upgrades really are sadly worth much much less to an appraiser than you paid for them. Since the listing agents only get the appraisal info when they represent the buyer they may not see the current info we see almost weekly. I can tell you that currently appraiser’s give your upgrades so much less value than you would think. I’ve even seen one’s that made my jaw drop and was recently surprised myself to find an appraiser gave a beach home appraisal (1 car garage vs 2 car only $4,000, and when a home was 50% larger in size he only gave the bigger home $50 sq ft (which is crazy IMHO, a pool with pavers, 3 decks, etc. only got $9,000, a granite upgraded kitchen $5,000, etc. – so before you start thinking you’ll recoup all those improvements, think again like Julia said- appraisers work for the lenders and they are shockingly conservative in today’s market)  [Buyer’s this is all good news for you who can take advantage of the remainder of this buyer’s market]

Home buyers, I hope you’ve seen some of the reason’s why you benefit from having your own representation in this process. We believe you deserve an advocate as well as all the current information available to determine a home’s value right now. We provide extensive analysis and advice to the buyers we work with based on our knowledge and experience so you can make strong offers. This can prevent you from overpaying as well as enabling you to get the home of your dreams that’s priced right as well as not risking losing $1000+ educating the home seller about his home’s value by doing home inspections, appraisals and more only to find out you can’t buy the home cause the bank won’t finance the home and the seller won’t seller for less and is actually stuck in denial.

I could go on forever with more real life real estate stories and will share more in the coming weeks – knowing that home sellers have an agent representing them – don’t you deserve the same when you plan to buy your home or beach condo?

So if you’re looking for a Clearwater Realtor we’d like you to know that we are passionate about being your real estate advocate. We’re committed to delivering Results daily based on Integrity, Knowledge & Experience – helping you find the perfect Clearwater FL homes for sale.

We’d like to be YOUR Clearwater Real Estate Team!

Call Cyndee @ 727.710.8035 or Jack @ 727710.8036

Warmly,
Cyndee and Jack Haydon
Charles Rutenberg Realty

Clearwater Real Estate Office
1545 S. Belcher Rd
Clearwater Florida 33764
727-710-8035 (Cyndee’s cell)
727-710-8036 (Jack’s cell)

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3 Comments

  1. Well all they have to do is look at your Altos charts and see the prices have come down.
    Over pricing doesn’t help anyone especially the sellers.
    I see it here too. With some agents.

  2. There are so many occasions over the years I have witnessed sellers be fooled by some agent telling them what they want to hear. This is just part of our business and it sucks!

  3. Clearwater Beach is a great place to purchase or invest in real estate; however I would suggest hiring an experience qualified appraiser as a real estate consultant in order to determine the property value and to save you from overpaying.

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