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Tonight while reading Lane Bailey's blog "The best agent to use..." I was reminded of a conversation recently with a fellow broker about how many people are taken in with the 'buying the listing' scheme.
Last year we had a client who, in preparing to relocate out of Alaska, called us to put their home on the market. We sold the home to them and knew what improvements they had made, so giving them market value was a piece of cake.
As it turns out we were not on the same page with respect to value. When it was clear we were at an impasse they listed with a competing firm who told them what they wanted to hear rather than what they needed to hear. More than a year, seven or eight price reductions and two real estate firms later, the home remains unsold.
The truth is most homeowners don't have a clue what their home is really worth. Most know what their note is, what they owe and some even know their current property tax assessment. Unfortunately, those numbers rarely reflect current market value.
Preparing a comparative market analysis is not rocket science. As Realtors we look at predominately the same set of numbers appraisers look at to define value; recent sales of homes similar to yours. The best Realtor to sell your home may not be the one that gives you the highest price. Trust, but verify. Ok, but how?
It's pretty easy to see if a home is a comparable; it will be equal in size, age, condition, location, etc. The question becomes how it compares by price. Just like your arithmetic teacher used to say, so should you... show me the math. Look to see how the adjustments are calculated for the residential square footage, garage square footage, effective age, lot size, amenities (i.e. fireplace, Jacuzzi tub, hardwood floors), bathrooms, etc.
Ask to see not only the actual adjustments but also the source of the numbers used to make the adjustments. I take my cue on adjustment values from local appraisers and by closely reviewing appraisals. If an appraiser is using $40 to adjust the residential square footage and Agent Not-So-Genius is using $110, you're going to have a market analysis that's good for one thing... lining the birdcage.
If an agent can't or won't show you how they arrived at a price, take that as your cue that a) they might not know what they're doing or b) they're inflating the price to get you to sign a listing agreement. As Lane mentions, don't be too surprised to see this agent come armed with pre-authorized price reductions. They know in order to sell your home, it will need to be at market value.
While numbers can be made to say just about anything, asking the agent(s) sitting in front of you to 'do it long hand' should help you weed through the rhetoric and select an agent to represent you based on what they'll do rather than by the dollar amount they fill in on the listing contract.
