Do Realtors All Use The Same Home Valuation Process?
It is not uncommon for us to receive questions from people who are currently trying to sell their home with another Realtor.
My typical answer is to recommend that they immediately contact the broker of the agent that they hired and put together a meeting to resolve whatever problem that they have.
But sometimes the questions are from out-of-town readers and I like to use them as the basis of my blog posts, as I know the topics are relevant in today's real estate market.
Today's post was built around one such question, from a homeowner who wants to know if all Realtors use the same process to determine the value of a home.
Here's what she asked:
Do Realtors Use The Same Analysis To Determine A Home's Value
The following question (with specific address information removed) was received last week from a reader from outside of the Tallahassee real estate market. She is getting conflicting feedback regarding the value of her home.
We have our home in Omaha, Ne, on the Market. We hired a realtor with a well known real estate company, he put the price at $325,000. 2 weeks later he advised us to drop it to $318,000- we did, it has now been on the market for almost 8 weeks and he wants to drop it again! Two other realtors- with a different company- have walked through with potential buyers and have expressed the house is listed above market value and should be closer to $275,000- do realtors use the same analysis? - SC
First of all, excellent question "SC." The short answer is "no."
Now if your question was "should all realtors use the same process to determine the value of a home," I would say absolutely yes. But our industry does not have minimum standards for training and education beyond what the licensing bureau of each State requires. And their requirements are very, very low.
It is very common for poorly trained agents to overstate the value of a property in order to get a listing, and then continually push the homeowner for price reductions until the property is priced with the market. I am not stating nor implying that your agent has done this, I am just advising that it is a common practice in every market that I have read about or visited.
How Should A Realtor Determine Your Home's Value
Last summer, I interviewed a top producing Massachusetts real estate agent who went into great detail about how a realtor determines real estate market value, and you can follow the preceding link if you would like to get a great lesson on the home valuation process.
In a nutshell, the best way to calculate what a home will sell for is to search your local real estate market as if you were looking to buy a home similar to the one that you have. Consider location, size, amenities, etc. in order to see what your competition has to offer.
Do the same for past sales (you might need a Realtor's assistance with this one). What have homes (similar to yours) sold for recently?
By studying these two sets of properties, you should gain a decent understanding of what a buyer will be willing to pay in today's housing market. You don't think they'll pay you extra for your home simply because you own it, right?
What To Do When You Don't Trust Your Real Estate Agent
Another issue that the reader's question explores relates to the issue of trust with your real estate agent. If you do not trust your agent, you are in deep trouble.
Since our reader has been getting feedback from multiple parties (I could not tell if the feedback was received through the listing agent or directly from the buyers' agents), I think a sit-down with the real estate broker is an important step right now.
If the agent tells you that it cannot be arranged, I would fire the agent immediately. Any company that you agree to pay $18,000 or more should be able to create some time for you on the broker's calendar if you have concerns about the service you are receiving.
Of course, if you'd like to know more about selling a home in Tallahassee today, just follow this link and let me know when you would like to meet and discuss your specific situation and needs.