The Denver Post reported that much of the sold data for homes is being mis-reported.
After a home is sold the listing brokerage inputs the sold criteria into the Metrolist data base. This criteria includes the sale price of the home, interest rate of the mortgage and concessions made regarding the sale.
What is being overlooked by many brokerages are the sales concessions. A trend of late is to offer to pay the buyer’s closing costs and sometimes a portion if not all of the downpayment (legally up to 5% for FHA loans).
While sellers have been offering incentives for a long time, it seems only lately that the incentives have become large enought to skew the statistics. While it is true that all the stats are not 100% correct, enough data is being reported correctly, that the trend for a neighborhood can be detected.
How does this affect the homeowners planning to sell? Well, if the sold comparables in your neighborhood all include 5% concessions, then the actual price is not what it appears to be. You will need to be prepared to match the concessions or reduce your price!
As a home buyer, how does this affect you? You could be paying more than you should. Your buyer agent should be able to do a market analyst of your prospective purchase and determine if in that neighborhood and price range the sellers are offering incentives. If they are, your offer price should reflect this amount.
The reporting practice is self policed. Most brokers take their responsibility for reporting seriously. Some do not. It’s one of those rules that needs more publicity, so the reporting is done correctly.
Generally speaking most concessions are offered in the “entry level” of the real estate market. The intent is to assist first time home buyers with the purchase of a home in our ever increasing real estate market.
NOTE: No information on a home sale is ever released to the public until the home actually closes. Then and only then will a sold price be published.
About the Author
Kristal has been helping buyers and sellers in Colorado since 1984. She enjoys sharing her knowledge of the Metro Denver Real Estate market via blogging and in person while driving around the beautiful Rocky Mountain town of Denver! For fun, Kristal enjoys shooting things with a Canon. Visit Denver Photo Blog