Four closings this week in Provincetown represent perhaps the best performance of the real estate market in months. Could this be a continuation of the expected turnaround?
Last weekend many realtors were busy showing property to prospective buyers. I consistently ran into competitors doing the same as I was showing clients around last week. Based on my own client traffic and other agents I spoke with, showing activity is considerably up. However, only one property was put under agreement this past weekend. Not good numbers for the amount of traffic we saw.
Extenuating factors may be coming into play as buyers, seeking to get financing, are encountering numerous obstacles when applying for mortgages. Appraisals remain the latest in challenges we are seeing that derail existing transactions. Most sellers act accordingly in pricing their homes today due to an adjustment of property values in Provincetown by 15-20%. However, in some cases appraised values are coming in less than an agreed upon sales prices. A property has always been considered worth what a buyer is willing to pay and owner willing to accept. However, banks are now relying on appraisals more than ever. Lenders are asking buyers and sellers to make up the difference between a discrepancy between the agreed upon sales price and appraised value. You can see how this adds a new level of negotiation to the mix.
This is important to consider if you are going to list your home for sale in today’s market. Now more than ever, there are no magic buyers and listed prices have to be based on fair market value. Most shoppers I’m working with right now are seeking to upgrade to a larger or waterfront property. This means selling their second home in Provincetown for most. The reality of their situation is that they may have to sell their Provincetown home for less than what they purchased it for.
If you are in this ambitious demographic you must price your home according to realistic market values for two reasons: One, you want the house to appraise once it sells. Two, you want to attract a buyer, liquidate your property and take advantage of the opportunity to upgrade. The silver lining in this cloud is to buy a property that has huge appreciation potential to eventually offset any loss.
If you sell your home for a loss and buy a superior property, you will benefit from the appreciation during the next upswing in the market. No one knows when that will be, but it is better to wait for the turnaround in a superior property better suited to your needs and having had taken advantage of historically low rates and low prices.
Provincetown News for July 2009
15 years ago
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