Evaluating The Price of The Property

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However, usually the agent estimates high, hoping that a buyer will pay the inflated price, which will increase his commission since it is based on a percentage of the sale price. Especially if he knows that the seller is not in a hurry to sell, he may let the property sit on the market until the right buyer comes along to take it at the high price. In general, all the agents in an area will try to keep prices inflated because it helps them all.

THE PSYCHOLOGY OF NUMBERS

Often a seller, or agent, will use a figure that seems much lower than it actually is. For example, instead of setting the price at $17,000, he will ask for $16,750. This is an old device which was first used by J.C. Penney and is now widely employed as a sales technique. The psychology of the odd price gives the buyer the feeling that he is getting a bargain and that the price has been cut as far as possible.

THE APPRAISAL AS A SAFETY VALVE IN THE CONTRACT OF SALE

A common safety valve put in buyers' contracts by attorneys is the condition that the purchase may be terminated if the buyer has the property appraised and he is dissatisfied with the results. You should always write in the parenthetical part that you are having an appraisal conducted on the property. You can use anyone you want as an appraiser. If you should decide sometime after the seller has signed the contract and made it binding that you want out of the deal, all you have to do is write the seller a letter saying you do not approve the results of the appraisal you had done. You don't even have to show him these results.

USEFUL RESOURCES

The following is free from any FHA office.

Questions and Answers on FHA Home Property Appraisals —HUD-38-F

The following are available for the specified price from:

The Superintendent of Documents
Government Printing Office
Washington, D.C. 20402

U.S. Land Prices: Directions and Dynamics Catalog No.
Pr 36.8:Uri/2R31 no. 13, 75¢
Major Statistical Services of the U.S. Department of
Agriculture. Vol. 6, Land Values and Farm Finance,
1971. Catalog No. A 1.76:365/v.6, 45¢

You can get appraisal information and a directory of appraisers throughout the United States from each of the following professional appraiser organizations:

American Society of Farm Managers and
Rural Appraisers, Inc.
470 South Colorado Boulevard
Suite 8
Denver, Colorado 80222

American Society of Appraisers
Dulles International Airport
P.O. Box 17265
Washington, D.C.

National Association of Real Estate
Appraisers
22 East 13th Street
New York, N.Y. 10003

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