Listing Price In Court Orders

A house’s list price is often a  point of contention between the  parties in a divorce. When there  is conflict, it can be tempting to  name a specific price in the court  order to solve that issue once and  for all. However, this strategy has massive  risks. When that list price migrates  to a listing agreement, it can  hinder or hurt the sale.

Here’s why:

• Prices are fluid. A value  that was established last month could be obsolete, especially in an increasing or  a decreasing market. Maybe  there was an appraisal done  a month ago indicating a $500,000 value. And then  last week, three comparable  houses on the block sold above $550,000. Worse yet,  maybe the market takes an abrupt downward turn and the comparable houses  sold for less than $500,000,  leaving the subject property  overpriced, which is the kiss of death in maximizing value.  With new stats coming out  daily,we need to have the  flexibility to keep up with the market on a real-time basis,  or we get left behind. Fixed  prices can’t keep up with the  market.
• Lifestyle and intangibles  affect the value. Have you  ever walked into a house with  an overwhelming pet odor?  Perhaps the downstairs has  been turned into an at-home  daycare center. Or tenants  living in the house are rude  and off-putting, making buyers want to turn around  and leave the moment they  step inside. When buyers are  house-shopping and looking  at 5 to 10 houses per day, these factors all of a sudden  put our house at the bottom  of the list — and diminish the value significantly. We need  the latitude to adjust the price  accordingly.
• List prices are strategic. Most  buyers search on consumer  sites like Zillow and Redfin.  As they search, there are ranges of prices to select; for  example, they might select  from $600,000 - $650,000,  based on what they qualify for  and can afford. If a property  is listed for $599,000, the property does not appear in  their results and we eliminate  the entire buyer pool who’s  searching for $600,000 and  above. A fixed price in an,order can hamper exposure,  and a good Realtor knows  what the neighborhood “caps”  are for these brackets.

Mandating a price is one issue. Mandating built-in price  reductions in the order is another.  An order might say, “The price  is to be reduced by 5% every 90  days.” When the average days  on market is fewer than 10, an  overpriced house that sits for  90 brings out the vultures, and  barrel-bottom, low-ball offers are  all we are left with. Terms like this  can plummet a value by tens of  thousands of dollars.

The best practice is to either  leave the list price up to the  recommendation of the Realtor  or consult with the Realtor  before creating the order so  that the price is relevant and  allows flexibility. Unfortunately,  we cannot order the market to  comply with the sale of the house.

© LAUREL E. STARKS, CDRE™ FOUNDER

Katina Farrell, CDRE is an experienced Realtor & Manaing Broker who specializes in real estate transactions, with expertise as a trained Certified Divorce Real Estate Expert and a Certified Negotiation Expert. To schedule a complimentary chat and discover more ways Katina can help you resolve the real estate challenges plaguing your divorce cases, call: 720-295-8848 or email: [email protected]