Jon Mand from Lenihan Sotheby’s International Realty joins this edition of the Greg Fly Podcast to talk about pricing houses and how most agents arrive at a particular number. There is an enormous range of methodologies and tools that agents across the market employ throughout the process, but the best agents offer a high level of precision with appraiser-like standardization. In other words: it’s not as simple as looking up what your neighbor’s house sold for – and padding it with 10 or 20,000 if you feel yours is better. It’s not just a Zestimate.
For Jon Mand, the first step is going through the house to see what kind of condition it's in, what kind of floor plan it has, and what kind of upgrades or finishes are present. After taking detailed notes, he goes back to the office and spends considerable time looking at comparable sales.
The easiest homes to value with great precision include Lake Forest, Sutherland, Hillcrest or Hunting Creek – where all homes are built to similar specifications and much data is available. On the other hand, the cool unique properties in the Highlands, Glenview or Anchorage prove more challenging.
“Similar to appraisers, we're trying to find home of the similar square footage above-grade – within 10-20 percent,” he says. “Geographical distance is important – ideally staying within the neighborhood.”
It’s not always easy finding homes to compare, especially if there are different numbers of bedrooms and bathrooms or unique features, as we often see in the higher-end luxury estates with acreage, pool houses, guest cottages, loft space, and stables – which is where a seasoned realtor comes in handy. “We're very well dialed in on what these properties sell for and what buyers are looking for, so we use that to help inform our valuation process,” says Mand.
He says the amount of credit a feature receives depends upon the general price range and buyer expectations. “If you have very nice crown molding and extensive millwork throughout the house, it can mean a nice upgrade for a $350,000 house, but might be an expected feature on a $700,000 house.”
“I was in a house this weekend that was just under $600,000 with no moldings to speak of,” Mand explains. “That's a tough thing for a buyer. They had pre-finished hardwood floors. As a buyer comes in a looks at that and compares it against the competition, well the competing inventory was very nicely finished. That's a big negative when there are flooring and millwork issues.”
The agents at the Lenihan Sotheby’s International Realty office take special care to examine historical data, as well as the current active competition. Knowing what’s available and what’s likely to become available, they can really sway buyers who are on the fence. They can dig into tax records to look for private sales that are not available on MLS sites.
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