Starting Real Estate

Pricing is one hundred percent the seller’s responsibility, howerever as a good agent it’s really worthwhile to offer some advice. If the price is too high, there might not be a sale in time and your client won’t be too happy. If the price is too low, it’ll sell, but nobody likes missed opportunities. To raise the level of happiness and productivity, it’s a good idea to help your client choose a good price.

Value is subjective, it varies from person to person. What seems an old, dirty, neglected house to one person may be an old family home filled with treasured memories and history to another, so choosing a price should have some kind of methodology to it. This week we covered Competitive Market Analysis, and honestly, these guys are fantastic. They give a good idea of how much to charge based on hard facts. Filling one of these guys out is kind of like solving a logic grid puzzle.

With a CMA, you estimate the value of a property by comparing to recent nearby sales or listings of similar properties. You get neighborhood data, site data, and building data, and then you hit the charts. The comparisons work like this: say you have two nearby homes. One has an extra bathroom and one doesn’t. The one with the bathroom sold for seven thousand more than it’s neighbor across the street. If this is the only difference, you set those seven thousand as the price of an extra bathroom and if your house also has one, you can add seven thousand to the prices of nearby comps that don’t. Or if your house doesn’t have one, you can subtract seven thousand from those that do. The tricky part comes from figuring out when something isn’t the only difference, and then you get some room for creativity (math can be beautiful!).

While it isn’t a full appraisal, the competitive market analysis is a quick and fun way to determine values.