Many Realtors when determining the value of a property utilize the Average Cost per Square Foot Method. Simple enough. You pull up the neighborhood on MLS, pull the sales for the last six months or so. Do the math to determine what the average price per foot for the sales comes to then you apply that number to the square footage of the home .. Bingo you have the answer. A third grade mathematics exercise that Realtors trust to be the best way to determine the price a home is worth.
What if I were to tell you that this particular home is located on a large lot, has lavish landscaping, hand-scrapped wood floors throughout the first level, has a pool with waterfall, arbor covered outdoor entertaining area with built-in kitchen and fireplace? Also what if all the sales in the neighborhood mostly did not have pools, located on smaller interior lots, did not have the extensive wood floors, etc.? The average price per foot would indicated a far less price than the actual worth of the property.
The homeowner is interviewing several Realtors. One has been in the profession for 30 years, holds several current designations, was recognized as the Outstanding Realtor of the Year last year by the local board, serves on several real estate commission committees and has a team of marketing specialists and client care specialist eager to make this a top notch experience for the client. The other Realtors interviewed have been in the business for 5 years or less and all do not hold designations and their resumes seem about the same. Do you think the seller will select an Average Realtor? Do you think that a buyer really when looking at properties sees them all as average? No, the standout property will merit additional monetary consideration. It is not average and to apply such a simple form of analysis is just defaulting to Easy as to learn how to properly adjust sales takes some additional time and education.
One way to catch quick and deserved attention is to be the Realtor who gets away from applying the Average and actually adjusting for points of difference and deriving at a thoughtful conclusion as to the worth of a property. It sets you above the average to the unique and demonstrates your expertise and additional arsenal of ammunition you will bring to the table for negotiations.
Being average is easy but being exceptional gets the best results. You and your clients will benefit. When I teach classes on how to value homes I put up on the overhead - No to the Average Price per Square Foot .. Don't Be Average.