Sight Unseen Offers Continue in Bristow
In April I wrote a post about whether or not it was wise for sellers to take sight unseen offers in the craziness that has been the seller’s market in Bristow and Gainesville in 2021. In the post the pitfalls of taking sight unseen offers are outlined. Increased possiblility for a low appraisal is one of them. And yet, listing agents are still out there thinking that getting an above list price, sight unseen offer prior to hitting the market is a great thing for their sellers…especially for sellers that are put out with the idea of having to have buyers tour their home.
Just this past week I had a conversation with a market colleague who had a crazy high sight unseen offer on a listing fall through on a low appraisal. Hmm. Wish I could say that the outcome of a low appraisal shocked me, but obviously it doesn’t. Right there in my April 13th 2021 post , the possiblity of a low appraisal is front and center in reasons why NOT to take a sight unseen offer. Here’s why:
Appraisers are tasked with finding the market value of a home. If a home never actually hits the market, but there is a pie in the sky number on the contract, with a contract date before the home was ever open to the market, there may be a belief that the buyer was under substantial strain to write a sky high number on the contract for the seller to NOT put the home on the market. The appraiser would be correct. The attention paid to market comps may have to be tamped down because the market comps, if they hit the market, are not truly comparable sales for a home that went under contract sight unseen.
Hitting the market is a big deal. Years ago I represented a buyer who wanted to purchase a For Sale By Owner home that was not listed in the MLS. My buyer client and I both knew the home was over priced, but like many For Sale By Owners, the seller would not accept less. So the buyer made the offer needed to get the seller to sell. Come appraisal time, the value came in ten percent lower than the sales price. When I called the appraiser they said there was an adjust in the calculations of market comparables downward because, “the home never made it to the market like the comparable sales did.” (In that situation, my buyer and the seller agreed to a price in the middle of the appraised value and original sales price.)
Hitting the market to get actual market value is what any seller needs to do to get the highest and best offer, and the best chance at appraising for a higher sales price. When buyers actually compete against each other on a home that is actively listed, a listing agent can show the appraiser what the market thought the home was worth. Believe it or not, it helps. And even if you have a sales price that is so high your listing agent is worried about low appraisal, when exposed to the market, you are likely in a seller’s market to land a buyer willing to make up the difference between the low appraised value and sales price. Again, that usually requires hitting the market.
Sight unseen offers feel like a gift, but more often than not, they are frought with buyer’s remorse and appraisal issues. If you have done the preparation to get your home ready for market and don’t want to be annoyed by showings, book a weekend out of town and enjoy yourself while your home is being shown. Colonial Williamsburg is nearby and so is Gettysburg for history lovers. Or if you prefer a beach, Ocean City, MD has many places to stay and lots to do. Or maybe a drive to Atlantic City, NJ to catch a show and visit a casino. There are ways to get the most the market has to offer and truly land it come appraisal time, but it is going to involve actually hitting the market and being available to all buyers.
The opinions expressed in this blog are those of Chris Ann Cleland, not Long & Foster.