Price Opinions

By
Real Estate Agent with Patty Turner Group - Keller Williams

We miss the mark in our industry many times.  Usually its just lack of knowledge or experience.  There are a lot of Realtors out there who think they are the first line of setting value for a house, the appraiser is just there to double check their work.  In Texas, we are highly discouraged from using the word value, unless certain disclosures are made.  Realtors aren't a lot of things, though many think they are, and one of those things is an appraiser.

 

I believe every job has its function or role in whatever system it acts within.  So what is a Realtors duty in forming a "Price Opinion"?  There are many that will disagree with me, and those people are entitled to have bad opinions.  In acting in the best interest of a seller, there is a steady line one must walk and balance details in forming an opinion.  

 

So many Realtors look at the sold comps, find the average, and boom - there is the price.  I know, I was there.  It never fails, you get an appraisal back that didn't make value and there is the blaring zit.  The home that was on the market 21 days fewer than the average house and sold for $20,000 less.  It's one thing to costt there clients some money.  It's another to now cost my Clients money.  

Take it a step further.  Which direction is your market heading?  What does your competition look like?  You probably looked at what the 6 month market looked like, but see if you have enough supporting comps for the previous 1 month period, then look at the previous 2 & 3 month periods, and then check months 4-6.  Did you have a surge in the market for a couple of months?  You dont want to have the house on the market longer becasue you're pricing the home higher and you priced the home with the hot market and now homes are sitting longer.  This isn't cut and dry, it takes some good analysis.  Maybe looking back a in to year 2, as a support beam for your pricing structure.

 

Now, what does your current market look like?  Are homes sitting on for 60+ days now and they match up with your sold comps?  Or, are they slightly higher and at less days?  Did you take in consideration all of your area (city, school system, or however else you determine your area)?  Take a look at the size of the homes of your competition and what tsize they are.  Sort by square footage and what prices surround those sizes?

 

Its not cut and dry, there are several factors that can be considered.  Lot type, lot size, gated neighborhood, water view, water front, backs to a busy street,....I could go on.  You get it though, and it requires you to spend some time on it and think some thoughts.  All in all it goes back to my previous post.  Is your agent a shining star, or a ball of gas.  That gas could be the most painful, expensive gas you could get.

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Topic:
Real Estate Market Trends
Tags:
valuation
cma
value
bpo
market analysis

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Jim Duquette

Realtor serving the Lake Ray Hubbard Community
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