Real Estate Appraisers don’t give a hoot about statistics. They care about only two things - the most recent sales and closest properties that most nearly match the subject of the appraisal. Black and white numbers and characteristics.
Real estate agents and their sellers use basic statistics (numbers, factual) to determine list prices. (They should use "sold prices" in their calculations as list prices are "hoping to get" prices!) Likewise, real estate agents and buyers use statistics (numbers, factual) when they determine an offer price.
These two prices, listed and offer, are rarely the same. Why?
Because, even if they use the same methodology, they don’t necessarily use the same data – thus the results offer received is can be different than the offer expected!
There are other reasons such as buyers always see the condition of a house as less than the seller views the condition.
I have found some buyers will start nitpicking and criticizing a house when they are setting me up (as their buyer's agent) to justify a low ball offer they are considering!
Some buyers see the see the market as still in decline and they don't want to over pay. Perhaps they still have questions about potential short sales and foreclosures in the neighborhood.
Prices - list price, offer price, and sale price - must all be based in logic and numbers - not hope alone!
If buyers and sellers (and their real estate agent) use the data and logic, the offer and list price should be within a "negotiable range!"
Gary L. Waters PLLC, Florida licensed real estate agent, Century 21 Baytree Realty, Rockledge, Florida serving Florida's Space Coast including the cities and communities of Melbourne, Viera, Rockledge, Suntree, Merritt Island, Cocoa Beach and the surrounding region.
Read my blogs Florida Homes for Sale, Moving to Brevard County, Florida, and Brevard County Florida Real Estate Information.
"hope" on both sides can really set one party or both up for disappointment can't it??
Deborah - Yep, hope is not really a realistic price that can be put on a contract!
Agreed. I was going to sell an investment home in another county. I had 3 agents send me a market analysis. Everyone used different comps and the prices varied by $50K. Amazing.
Gary The program needs to start when you make your listing presentation - it's like kindergarten - laying the groundwork
Cynthia - It is how they pick the data..to make there case. Thanks.
Karen - Day one of training agents is a good place as well. Thanks.
This post will be bookmarked by me for my future clients to read. Great work Gary. Thanks.
Thanks, Ken. Have a great week!
Gary, I use the sold prices, but like to show my sellers the competitiona and DOM.
Hi Gary, Well, we have certainly seen that in our market. List prices are all over the place and often it seems that we have 2 different sets of numbers for list price, what people hope to get, and list prices of short sales and foreclosures. Great post - so true!
Gary, Jacksonville is the city where list price vs. sales price is the furthest apart - a dubious honor to be sure.
Sharon - That is an intersting tidbit...I like Jax well the burbs like Orange Park south!
Sandy - Thanks...and those two sets are so different!
Linda - That is a smart approach. Sold is real, the other is hope!