Ever had this experience...you're out, showing houses...you go into one and either you think or someone says..."how the heck did they come up with the price on this one".
Almost universally, you'd hear such a thing during the peak of the market because there'd be that one house that was priced way more than others in its neighborhood. Recently, I've begun to see it the other way...houses priced WAY under the market. (and I'm not just talking short sales or foreclosures).
So it raises the question..how do Realtors come up with values. (usually the prepare a Market Analysis or a CMA--Comparative Market Anaylsis--both mean the same thing).
These market analysis are essentially, based on sq, ft, bedrooms, bath, location/neighborhood, lot size and other amenities properties currently on the market, recently sold (within 6 months or less in this market), recent expireds/withdrawns should be selected (NOT properties that justify the price they wish to list at!).
As homesellers, you should be very wary of the CMA that is short on details. It really should be like an 8th grade math assignment...you should be able to SEE the work. Check for adjustments (if they use a 3bedroom and you have a 4bedroom how much value did they add to the 3bedroom to make up for its lack of a bedroom for example) If you look at comps and wonder "how the heck is that like my house", or "that one is way over in MiddleofnowhereTown" ask questions. Mistakes in pricing can cost you thousands of dollars whether it means you under price your house or spend needless time on the market.
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