I am almost certain over the last year or so this is what people think, We Just Make Up Housing Prices To Screw You. Whether they say it to my face or not this what they are thinking. Please tell me other wise after your done reading if this is not true.
My hope with this is to try to explain in an easy to understand way, why Realtors come up with the prices they do. I know it sounds complicated and at a professional level it is, but in this case I’ll try to make it easy for you.
Like I said before I am sure that most people think Realtors just pull a price out of the hat to screw the home owner. This is not true (although I can’t speak for all Realtors).
The price that I come prepared with to a particular home comes from a large pool of housing data that has been analyzed and sorted to narrow down a price point at which the home should sell at (based on reasonable selling efforts).
The price that is laid out for a home seller is based solely on the Buyer’s, that’s right, the Buyer’s. All the Buyer’s that are ready, willing, and financially able to buy make up what we call “Market Value”. So to get that home sold you might need to price the home a little lower than what you had expect too.
There is no point to over price a listing because you only have about a 6-8 week window to get maximum value for you home before time starts to de-value the home. The effect of over pricing is far worse then under pricing. See graph here Over Pricing.
If we under price what happens is we get multiple offers and it drives the price up to “Market Value” and if we over price we don’t sell and/or lose money. The longer a home sits the harder it is to sell for a whole host of reasons.
So to be in the market you need to price accordingly, especially now. See The Tail Of Two Markets.
So remember the next time you feel like choking a Realtor because you feel the price he gave you for your home is WAY to low, remember we don’t make up the prices the Buyer’s that are buying do. We just do our best to interpret the data that we have to help you achieve your goals.
For more information on pricing feel free to email me. Or for a free market report visit http://www.yourfreemarketreport.com
If you like what you read, please leave a comment or RT on twitter it’s always nice to hear from the readers.
Cheers!
CP
