In today's market it is more important that ever before to use the expertise of a professional REALTOR. There is a difference between a real estate agent and a REALTOR. As a REALTOR I am a member of the National Association of Realtors and as such I am bound by a certain Code of Ethics and Standards of Practice.
I have duties to my Clients and Customers, duties to the Public and duties to REALTORS.
One of my duties is stated in the Standard of Practice 1-3. It reads like this:
*REALTORS, in attempting to secure a listing, shall not deliberately mislead the owner as to market value. Now you may be thinking in terms of misleading the owner as to setting the price higher in order to earn more of a commission. But in this BUYER'S MARKET, you could also think of terms of lowering the price in order to produce a quick sale!
There are several things that would determine Market Value when determing the price of your home. Most agents will prepare a Comparative Market Analysis (CMA). This analysis uses the seller's home as the subject property and three other comparable homes in the area/neighborhood as comparables. There are other factors, in this BUYER'S MARKET, that should be considered in pricing your home.
Looking at the ACTIVE homes in your area. The Active homes listed are TRYING the market. Consider the PENDINGS. The Pendings have an offer on the table, but still not an accepted offer. The SOLDS are just that-SOLDS. These homes have created a CEILING in a buyer's market. In a Buyer's Market the CEILING creates the highest price that we should list a home (comparatively speaking). EXPIREDS are homes that have tried the market, but haven't sold due to one of several things-more than likely price. Of course, there are other factors that may bring about a price such as a foreclosure, or a short sale. An experienced agent will do their homework when looking at other homes for comparables. There are also other factors that will determine the market such as unemployment rate, inflation, economy, and interest rates (current and projected). Pricing a home AHEAD of the market will put the seller in a "best case scenario" position. AHEAD of the market would be to price a home just below the CEILING.
I would not be doing my clients any favors by pricing a home too high (it will sit on the market too long) or too low (my clients will not earn the most money possible for their home). But ultimately it is up to the seller-I can only try to educate them as to how I have arrived at my suggested range of a price. But if a home is not priced correctly, the buyer's will simply go on to the next house. As a REALTOR part of my job is to show the buyer that my listing has VALUE.
The Code of Ethics helps both the seller and the REALTOR in setting the price of a home. As a professional REALTOR and bound by my Code of Ethics, I would not mislead my clients in determing Fair Market Value for their home.