we have stainless steel appliances this always cracks me up as a justification for a higher price. Sure, stainless-steel appliances *cost* more, but they're not necessarily in and of themselves more valuable, unless their *features* are high-end. You can get a "stainless appliance" package for $2,000 or less. (In fact, sometimes I think if we go back on the market, I should buy one of these packages, just to increase the odds of getting a buyer, even though our white stove has many more features than the stainless ranges in those packages.) Even if you spent $4,000 on appliances, why would that bump your price up by anything but a fraction of that? But the point is this (and I have tried to make it several times, but never so succinctly than c9pilot): But, the buyers should have known (or been told) and made a conscious decision to spend more on house if it had the more valuable features they wanted. THERE is where their agent messed up, and he has no one to blame but himself. Even if he deserves to win the lawsuit, he ALSO deserves to have to deal w/ the angst, but basically being a stupid person. As BernieK has said several times: He would make sure his buyers knew WHY they were paying MORE THAN THE ASKING price.

"Somebody set the standards how to appraise, and everybody follows, right or wrong" Fannie, Freddie, & FHA set the basic rules for mortgages they will purchase, and these quickly become the 'standard' so that the secondary market can function. From the OP "When an appraiser comes up with comps, for a lender, are there statistics, other than actual recent sale amounts, to truly compare homes? For example, a house with original kitchen/bath vs one with remodeled rooms. Or quality replacement windows vs rotting wood single pane and aluminum storms. Or a large brick patio vs 10x10 cracked and weathered concrete. Or a green, trimmed lawn and nice landscaping vs a mostly dead weedy patch of vegetation. " An appraiser should be making adjustments for all these things, but they are NOT going to be a fraction of the cost of the improvement. "clearly that if he used the cost of building method of appraisal it would be x (higher amount) and then gave us a low appraisal based on one sale in our subdivision where a builder sold very low after months on the market," 'Cost of building' is not normally used for single family houses. What you spent to build has little to do with market value of the final product. The builder sold a brand new house at a 'fire sale' price to get out from under it. Regretfully that becomes a cop for the area. Wiling seller, willing buyer. Appraisers adjust for all sorts of things all the time. It is part of the process to understand how to adjust for lot size difference, finished square footage differences, etc. Many things done to 'upgrade' a house have little value except to the owner. Plumbing is expected to work. Electrical is expected to work. HVAC is expected to work. The roof should be waterproof. Upgrades to basic functionality have almost zero value. A new roof may result in a faster sale, but unless the old one was actually leaking it is of very limited value to a purchaser.

This doesn't make sense to me. The seller pays one commission. The brokers cooperate to share it. Unless there is some odd agreement here, the agent is basically saying that he/she doesn't want to share. Around here, a pocket listing means that the agent knows people who are willing to sell, but don't want their home on the market. It's up to the agent to find someone who wants a house in that neighborhood, at that price range, with that type floor plan or features. The house we bought was a pocket listing. Our agent took us to a few neighborhoods and several showings until we had decided this neighborhood and she had a pretty good idea of what we liked and didn't like, then she said, well, this house isn't listed but the owners want to sell so let me arrange a showing and that was it. She accepted a reduced commission because she didn't have to list or market the home or negotiate.

Mary, I agree that we have been sold a bill of goods in thinking that we have an investment when we buy a home. It never really should be seen that way. The problem is, for the vast majority of us, it is the largest investment we have. I think it has been only in recent years that the home was seen as a way to make money, though. The run-up in prices in the last 20 years has led us to think it should always be that way. I know when I bought my first house, in 1985 in New Jersey, it was a fast-paced market. I know that home prices were accelerating at a few percentage points a month. We felt we had to get into the market as quickly as possible because of the fast rise in prices. We bought the house for $96,600. Then DH got transferred and we sold it for $124,000 nine months later! You know my story - remodeled the kitchen to meet my every need, including huge pantry space for my vegetarian husband and a dog paw-washing station at the back door. We never expected to sell. Then I got a better-paying job and Dad moved in with us, and my knee went kaplooie! The steps in the home were a problem for Dad and me, and we were just too tightly packed in. We went to an open house and ended up putting a contract on a house within three weeks. Then we needed to get the old house ready to sell. We tried FSBO, for six months, then got a realtor. We are now selling it with a two-year rent-to-own contract with a closing in August 2009. Our pricing probably had a lot to do with the long time to sell (17 months). We started at the price a comparable house sold for two months earlier. The market had not started going down, yet. We had an appraisal done because the comps were really not that comparable - brick 1300 sq ft plus a finished basement with a 2 car garage on a smaller lot with no updates to the house vs a frame house with decorative brick on the front with 1450 sq ft and a 1.5 car garage, completely updated, custom kitchen with over 20 cabs and a pantry, unfinished basement, larger lot. So we paid for a professional appraisal and then upped the price to $165k when that was what it said. We didn't know it then, but that was a mistake, because the market was starting to go down. Pre-appraisal, we had no MLS, no advertising, so it was only known to the open house attendees from the month of March that we had upped the price, so it was not too obvious. We lowered the price in June, and again in August, when we listed it with a realtor at $159k. We got our only other offer besides the rent-to-own last Christmas time. It was for $119k, and we had to pay $6000 toward her closing costs! It turned out that she could only qualify for a house up to $140k, so she chose her offer price where $140k would be halfway between our asking and her offer. We lowered the price to $149k this spring and it seemed to generate a lot of interest, but no offers! I found the buyer at work - she is a nurse at one of the nursing homes I visit. She knew she could not buy right away, so we spent about a month going back and forth about how long she could rent before buying. Once I did the math and found that our cost basis exceeded $145k before adding the costs to sell the home, we told her to make an offer. We have now spent a month getting the price agreed on. Now we are going to get a lease application from her, and if that is acceptable, then she will move in in a few weeks. Our mistake through all of this was FOLLOWING the market's prices down, I think. That and a single bathroom, which we could not change. We were on the top two or three of several buyers' lists, but never made #1. Our misconception of what our house was worth was also buoyed by the neighbor's house across the street. It sold for $160k last September and had only 1000 sq ft. But the huge, high mechanic's garage is what sold that house, and the against-code urinal and furnace in the garage helped. This sale led us to keep our price higher too long. That is the trouble with comps. Our house is identical to that 1000 sq ft house except for our $30k kitchen, our extra room off the kitchen, and our extra 12 x 23 room above the garage. He didn't have these things, but he had that garage. Why shouldn't we get a price similar to his? We has 445 more sq ft - almost a third larger home. The moral of our story is that comps can lead you astray in a declining market. You follow the prices as they plummet, and you lose. We have put $145 into a house that is selling for $139 - two years from now! Did we lose money on the deal? Sure we did. We also rescued a house that was on the verge of having structural dry rot problems and turned it into one of the nicest in the neighborhood. There is some spiritual value in that. We added value and lifespan into that home. The buyer is coming off a bad time in her life, and the nice home she will live in will give her some comfort as she rebuilds. There is certainly value in that. I guess you could say we lost monetarily in this home, but gained a lot in knowledge and karma. We learned not to do that again with our money, and to never say "never" (as in, "we are never going to move from this house.") when it come to plans for the future.