The objective of almost every Seller I have met wants to sell for the highest price possible and doesn’t want to leave any money on the table. On the other side, the Purchaser wants to pay the lowest price possible for real estate and, for certain never more than the current market will bear. The real estate agent is in my opinion the objective Ambassador of the transaction.
There is an adage that states: “A person who represents himself at a trial has a fool for a client.” Adages become part of common knowledge because they usually ring true over time. The primary reason that most Sellers do not sell their own real estate is because deep down they realize that they are biased and cannot be truly objective. It is in the words of Shakespeare a case of “Love is blind” and thus not rational.
In the situations where an owner obtains an appraisal prior to listing the home, often they then wonder why the home doesn’t sell for that price. The reason is that an appraisal looks back at the market. Past results are really the only indicator that can be used to project future outcomes, yet just like in the stock market there is no guarantee. The agent instead looks forward to where the market is going and often utilizes the tool of a Comparative Market Analysis (CMA). Clearly there are many different factors that determine value and being objective in the analysis become even more critical.
Ilyce Glink and Samuel J. Tamkin in the real estate section of the Washington Post discussed this very question: “Why am I not getting the asking price for my home?” The closing remarks sums up the answer to the posed question best: “You must overcome the feeling that you must get’ a certain price for the home... it isn’t what seller must get but what a buyer wants to pay for a house.”
The market story is actually being on the market. Thus the answer to what is an objective sales price is: what is fair market value? Fair market value can be defined as “What a Buyer is willing to pay that a Seller is willing to accept at any given point in time, given that it is an arms-length transaction and there is no duress”.
The additional challenge is the market is constantly moving. Every day there are homes going to settlement and under contract and coming active on the market for sale. It is a dynamic process. A professional real estate agent experienced in the particular market area is best able to assist Sellers and Purchasers in understanding the current market conditions that determine value.
Karen Briscoe and Lizzy Conroy and their team of agents at HBC Group at Keller Williams would be delighted to prepare a confidential Comparative Market Analysis for your home in the Northern Virginia, Washington DC and suburban Maryland area. Please reach out at: www.HBCGroupKW.com, 703-734-0192, Homes@HBCGroupKW.com.