Rule of Thumb: Expect to Sell Your House for 10% to 17% Below Appraisal Value on Average

Here's a rule of thumb from Bankrate on what you can expect to sell your house for these days:

Assuming the home is in excellent condition and your local housing market is suffering from the widespread weakness we've seen in the past year or so, you'll probably list the house around 5 percent off the appraisal price and get offers from 5 percent to 12 percent below that.

A few comments on this:

1. First of all, this rule is valid if your home is in "excellent" condition. And "excellent" is defined by the potential buyers, not by a seller who usually has biased thinking (they often think their home is in better shape than what it actually is.)

2. Local housing conditions vary from place to place -- one area can be way down, another one can be at the national average, and another can be way up -- all within the same city. This rule of thumb is for a market going through the same dynamics our nation is as a whole.

3. In my recent house hunting, I've seen some big drops. A house was initially listed at $675,000 (not that we were looking at buying it -- it's way above what we want to spend -- I just found it on a website while browsing) but had sat on the market for a year and was now at $579,000. Another house we looked at dropped its price by 5% after three months on the market and no action. Our agent said she think it could go down another 15-20% before it is sold. (And they didn't price it THAT high out of the gate.) I'm estimating our home is worth 20% less than it was a couple years ago. It's crazy!!!!!

Comments

[Debra Goettsch]

We are in Florida, one of the most depressed areas I have seen. However, if you price your house realistically and use a good realtor, you can get your asking price. We have a realtor living in our subdivision who specializes in our homes. Between January 1 and June 30, 2007, 13 homes in our subdivision sold. He personally sold 6 of them and the average price was 97% of listing price. His time frame was less than 45 days. Talk about someone worth the price. He also guarantees to buy your house if it doesn't sell in 89 days. This is the type of help to look for if you want or need to sell your home now.

[Lord]

Seems fairly realistic, depending on what you want to use for mortgage rates - 6%/7% = 85.7% The real difficulty these days is finding anyone qualified to buy it.