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He doesn't determine the value of your home--the market does. Similarly, the best marketing and exposure in the world won't sell an over-priced home.
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24 Comments on How Do You Determine the Value of My Home?
One of the values a Realtor brings to the valuation process is knowing and I mean truly knowing the market. I can show you three closed comps and three actives on paper but when looking at the raw data can you tell me which one of the properties was involved in a triple murder and is now stigmatized? That is why our roles are so important.
Tammie,
Nice post. I agree with your post and your follow up comment as well.
"Similarly, the best marketing and exposure in the world won't sell an over-priced home".
How true!
No matter how you slice this equation the bottom line is motivation. if the seller is in denial about the market it does not benefit a real estate agent to promote there illusion by taking a listing where there is no motivation and usually pricing reflects how motivated the seller is to get his/her home sold.
Good post today, thanks for getting it out to us today. I think it would be good for all sellers to read this post when marketing their property.
Patricia/Seacoast NH & ME
Tammie - excellent post. I agree with you about using the expireds as a gauge, I do the same thing.
Tammie, the key statement for me is that it's the Realtor's job to sell the home, not price it; value is determined by the market. This is what sellers need to understand. Thanks for your post.
Actually, as bankruptcy trustees, probate attorneys, and family law lawyers will attest - based on their own practices - the safest, must defensible market value obtainable for a home (will stand up in court) comes from an honest to gosh, state licensed APPRAISER.
Note I am not an APPRAISER, but both my broker owners are.
Agents tend to focus on sales price. Market value is a different concept.
Tammie,
So true, the worst thing a new seller can do is price it high to give it a try in a declining market and then end up getting less than the first low number they didn't like when this process started.
All the best, Michelle
PS - Can always suggest they get an appraisal to start prior to listing!
Tammie. these are all words to live by.
The market determines the property price and value is so true. I can't stress it enough to my sellers. Thanks you for the great post
We have to use active listings as a tool. You have to know where your competition is, or you're doing not painting the whole picture. Great post!
Good post Tammie, it is just common sense but when it is our house emotions get in the way. Our house is only worth what a buyer is likely to pay. And if they have good Realtors, they will pay what is in line with what has sold in that market.
Expireds and Withrdrawns are important to show prospective sellers. Many agents don't look beyond active and sold when prepping the CMA price.
Tammie, great post! I use expireds as an excellent gauge as well. Just "Sold" and "Active" don't paint a very accurate picture.
Michael - If we don't tell sellers this, no one else will.
Dawn - Oops forgot that one. But yes I do include that info as well when I meet for a listing presentation.
Joe - Isn't that why people use us because of the knowledge we possess?
Craig - This is probably the hardest thing for sellers to understand. If they are priced too high, they won't get showings. If the condition of the listing is good and the MLS photos accurately reflect that and there aren't any showings, it's usually related to price.
L & L - Absolutely, we don't create the market conditions. If sellers are in denial, their home probably isn't going to sell.
Patricia - Wouldn't that be nice?
Mark - We have to. It tells us what else hasn't sold and usually we can deduce why.
Jean - I agree.
Gold Team - Even if we do get an appraisal to price the home, that appraisal may be obsolete in three months.
Michelle - I call this the "Kiss of Death". If sellers insist on pricing high, then they set themselves up for a lot of disappointment.
Traci - Thanks for stopping by.
Chris - So true. Try telling a seller it doesn't matter what the home next door is priced at. It matters to him. But if that home is priced high, he can see that from the other active listings. Exactly why we want to provide that information.
Mike - If a buyer won't pay the price, it's not going to sell.
Bradley and Collin - I want to know everything there is to know about a neighborhood when I go to a listing appointment.
I disagree with the active but real estate is very local and might be beneficial in your area. Here a seller would take them as the ones to use when they should only be looking at solds. If there is only one comp sold then so be it.
I think that the pending listings are more telling of where the market is truly going, even more so than the current active listings. Especially the days on the market for those pending listings. I use sold data that is no more than 60 days back, if there are no sold comparables in the immediate area, I choose another area that is similar. Too much can change in a couple of months, so going back further for sold comparables does not always make sense. I do not really use the expired listings at all, but if there is a high occurence of them, I could see where you might want to consider them after gauging their condition. Great information!
Corinne - Sellers here expect that we're going to look at the active listings. That doesn't necessarily mean where we'll price it. It usually shows us where we don't want to price it. If the seller is looking to price his home at $350,000 and his neighbor with a similar home is priced at $350,000 and has been for 262 days, that's not where we want to be. In terms of the sold comps, I don't have a problem with the number of sold comps as much as I do with when they sold. A comp that is more than 60 days old, doesn't really help much.
Karen - If pending sales are available, they do give us a good indication. Unfortunately, pending sales aren't always available.
Great post Tammie,
How do you treat distressed sales in the CMA?
thanks for the post
a lot of great ideas and thoughts
cheers to you
Jim - We're not experiencing a whole lot of distressed sales in this market so the condition of the property usually plays a factor. Obviously, if you have a lot of distressed sales in a neighborhood that is going to effect the value.
Vince - Thanks for stopping by.