Wednesday, June 17, 2009

the way RE pricing should work

Part 2 of my continuing series on what is wrong with real estate.

Listing prices often have absolutely no relation to reality and make the whole system inefficient. Between short sales listed at ridiculously low prices that the actual property owner will never accept and ludicrously high prices that no new lender will ever give a loan for, badly priced properties just waste everyone's time.

The obvious solution that has probably been suggested a million times before:

A proper appraisal by an actually neutral third party should step #1 in any sale process.

Not a realtor opinion. Not a zillow zestimate. Not a silly homowner guesstimate. An appraisal arranged through a lender. Or, better yet, an incorruptible third party.

You have to get an appraisal to get a loan anyway, few people are willing to buy a place too far above appraisal, and few people are willing to sell a place too far below appraisal.

So, what is the sense in listing a place without getting an appraisal first?

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