Not enough Realtors take the time to sit down and explain the fine details behind coming to a fair market price for your home. It takes TIME! Admittedly it is not rocket science, but there are nuances to coming up with a price that allows for some negotiations but still doesn’t set you far apart from your competition. Many consumers are now looking to on line sites for “values” or “zestimates”. This, in my opinion, can be a grave mistake. Quite frankly, at this time in our internet cycle, these “value sites” are just plain OFF THE MARK! Personally, I would love it if they were more spot on, as it would make my job as a Listing Professional, a whole lot easier. But they can be and often are OFF THE MARK as much as 30%. To compare, that would be like paying 75 cents per gallon MORE for a $2.45 per gallon of gas for your car. Would anyone do that? NO WAY. We all squirm when paying $3.05 per gallon for gas, but if that is the fair market value, that is what we pay if we want to drive our cars.
Real estate pricing is the same. The prices fluctuate with demand. Right now in our current July 2016 market place in Nevada County, California, we are seeing prices rise gradually. The way we come to an accurate market price is to take the particulars of EACH property and see how it compares to others in the same area. For example, we see what the details of the property are for an accurate comparison. A three bedroom, two bathroom, single- level, two car garage home on a third of an acre is what we have to value, as our example. We then go to the SOLD market. We seek out properties that are similar in those parameters to our subject home, having actually sold in the past six months. Once we have identified similar properties , we sign onto the Multiple Listing Service in our area of concern and see how those homes actually compared, and are reminded of them by pictures and addresses. IF you are working with an active, seasoned agent (Deb St. John in this case) they will very likely have been in these properties while they were on the market. If the homes had anything negative unseen in the photos, then your agent might recall such details, where the ” online sites” just don’t have that information. I most often use the “smell-a-vision” analogy. Pictures cannot tell you if a home has had cats and dogs, or there was a leak in the basement causing an “organic smelly stuff” to grow. My nose knows! We Realtors are well trained to recognize these conditions and the negative spin they can put on value. Even appraisers cannot add this vital factor to their appraisals of the property if they have not been inside the house. We are trained to assess homes and land from a buyer’s point of view!
Back to the tools used for value pricing: Once you have identified the six months of sold inventory for your subject property, you find a sold price range. Personally, I make notes of the positives for each of the properties individually, and the negatives, based on personal experience, but also what my current buyers are telling me they are seeking in a home. THIS is important information, as the “online sites” cannot reflect on current “shoppers” and what actual buyers need. For example, if the subject home has had upgrades like stainless steel appliances, this will reflect as a strong positive. If, on the other hand, there is little or no landscaping or fencing, it can reduce the value, as our current shoppers value these features.
Once we have a price RANGE established, based upon the above factors, the tough sorting happens. We narrow the playing field to include only the Sold homes most like the subject home. Then we see what sort of COMPETITION (Active listings) are available now. This is where the law of supply and demand helps the SELLER and the agent to come up with an accurate price from the RANGE of pricing. This is most always the seller’s responsibility. My goal as a listing agent is to offer the seller a picture of the reality of pricing and the market. Your job is to be honest with yourself about what will be reasonable. For example, should your price range be $350,000 to $399,000 and your home is just average, then you will most likely need to be very clear with yourself about the odds of your getting a buyer to pay TOP dollar for your home. If you still insist on trying the higher price, then it will be your responsibility to reduce the price should the home not sell in an average market time (which also fluctuates within a very tight market place here in our county).
As you can likely see, this is not an exact science. But preparation and thoughtfulness really plays a huge role in getting your home sold. Real estate sales and pricing is like a TV reality show. The principals play a huge role in the “drama”. I hope this explanation has been helpful. If you need further explanation I am happy to sit down and go into more detail. Each home deserves the full attention to detail that a seasoned Realtor can bring to the pricing table. And each seller deserves clear accurate direction about pricing.