The art of pricing a Real Estate Listing

The Art:

We’ve gathered a lot of data, and we’ve crunched a lot of numbers. Our sold comparables prices have been adjusted to make them more similar to our subject home. We’ve also done the same type of adjusting for the homes currently listed that would be considered competition.

Why do we do the current listings? Sold comparables reflect past history. Even though we’ve taken the most recent sales, they’re still events in the past. There was an existing competitive market at the time of those sales that may not be similar to the current market’s properties.

The motivations of the buyers of those previously sold homes may not have been the same in the current competitive market. An experienced agent will look at the current market competition, and make adjustments to the valuations suggested by the Science portion of our procedure. If there is less comparable inventory now than when previous properties sold, then we may want to take our valuation up a bit. If there is more inventory, we might want to go the other way.

That’s not the only Art to the process. An agent’s extensive knowledge and experience in a market will contribute to their ability to tweak the listing price for the best results. Knowing the Seller’s motivations and time frame are a contributing variable. Knowledge of area seasonal buying trends, as well as development patterns are also part of the Art facet in our valuation process.

Rarely is anything of value also easy. This is an example. Taking the Science and the Art of real estate valuation into account, the real estate professional advises the listing client in order to arrive at the best listing price to sell the property in their desired time frame and for the best possible net price.

Though many believe the Internet has made this process easier, that’s really not the case. It has released a great deal of information and pricing data to public scrutiny. However, just because data is published, it does not mean that it is accurate. There is also the diversity of sources for valuation data. Where you get it can change the results.

More than ever before, extensive knowledge and experience in a market is of great value. There is more data from more sources out there. The trick is to gather the best data, crunch the numbers with Science, and interpret them with the Art that comes from experience.