Home Price is Important
Selling anything can have its challenges. In order to complete a sale you eventually need a buyer. In the case of selling a home you may call on the services of a real estate broker / agent. The buyer of the house may employ the services of a broker / agent as well. The buyer may also need a mortgage and therefore seek a bank or mortgage lender. The lender may need an investor. In order to evaluate the investment opportunity, the investor may hire an appraiser. The appraiser will provide the investor with an unbiased opinion relating to the value of the home. The appraiser sends the appraisal to the investor who gives it to an underwriter who evaluates the appraisers work.
Ok, how many is that so far….
- Home seller
- Home buyer
- Seller’s REALTOR®
- Buyer’s REALTOR®
- Mortgage lender
Eight people have to agree on the home price. It all starts with the price desired by the home seller. The seller is expertly advised by the real estate agent.
I am astounded when a home seller informs me that they interviewed an agent to evaluate their home and the meeting only lasted about 1 hour. Even more amazing is that they were able to review some papers showing comparable properties that have sold and offered an opinion of value on a home they were barely familiar with.
In contrast to the above, it is my belief that it is nearly impossible to evaluate a home I have never visited, do a pre-visit analysis and give a competent opinion of what the home may be worth. The degree of error with this is too great for me to consider. My common practice is to meet with the seller at their home and evaluate the property. This involves acquiring accurate square footage measurement of the home, asking the seller questions and discovering the pricing and amenity variables that are always different in every home.
The second meeting is with the home seller at my office. Here we log into the Trend Multi-List (MLS) System, study comparable home sales, pending sales and active listings. Connecting my computer to a 55” flat panel, high resolution monitor helps us more clearly evaluate property photos and data of the comparable homes. We now have the advantage and flexibility to intimately and thoroughly study the market the seller’s home is in.
Doing this exercise side by side with the home seller shows them how the other 6 people, listed above, will be evaluating their home price. I offer the guidance and the home seller chooses the price as it should be. I am a competent advisor, not the home owner. It is important to understand the range of value a home may have when seen through the eyes of the other parties that will likely be involved in completing the sale.
I consider my customers partners. I want them to understand the world they are entering. The better they understand our journey the more prepared and successful we will be. You see, whatever price the home does sell for all will have to agree it is the right price.
Selling and buying a home is an experience most never forget. It is a better experience when you have a trusted advisor to light the way.
I always have my flashlight and extra batteries!