Often times when we first meet clients to list their home for sale, they have a price in mind for their home. That price might come out of thin air, or it is based on what the two neighbors down the block received a year ago. While the latter may be a good starting point, it’s not a complete picture. One of the most important aspects of a Realtor’s expertise is his or her knowledge of how to analyze the data of homes sold versus homes sitting on the market. While a home owner can glean together a range of his own data on sold homes, a Realtor has a process that involves professional insight and interpretation of the numbers. Let’s take a closer look.
Sites Like Zillow Only Give Automated Estimations
Lots of clients turn to Zillow’s “Zestimate” for an estimate of what their home is worth. The problem with using the Zestimate to sell your home is that you might leave a lot of money on the table. Or on the flip side, you’ll ask too high a price that increases the amount of time your house sits unsold. Zillow uses a computational modeling system to estimate home value and even states on its site that its Zestimate is only a starting point. They recommend getting a full comparative analysis from a real estate agent before selling. Without human intervention, Zillow can’t discern nuances like particular streets that are in higher demand than others in proximity, or a unique property that stands out among the others.
Realtors Do a Deep Dive into Your Home and Community Statistics
An experienced agent starts with the facts about your home: square footage, number of stories, number of bedrooms and bathrooms, type of flooring, foundation, lot size, age, amenities, updates, and more. He has a number of online tools at hand that only real estate professionals have access to, such as the MLS (Multiple Listing Service). The MLS offers additional details and photos that aren’t available on a county auditor site, which the public can use for property details. Each criterion of a home to be listed is charted for comparison next to the same criteria of similarly sold homes.
Realtors Interpret Data and Reconcile the Findings
Take two homes in the same neighborhood that are the same layout and size: one has fully remodeled bathrooms and kitchen, sits on a cul-de-sac, and has a deluxe outdoor living space. The other home has older bathrooms and kitchen, only a concrete slab patio in back, and sits on the corner of the street next to a busy road. Obviously the first home described has features that are in higher demand and will likely command a higher price than the second home. But how much higher? That’s where a Realtor’s interpretation of the data is crucial to the process. He will look for sold price trends in other nearby homes that are of similar condition, size, and updated features to help determine the difference. He’ll also take into account active and pending home prices and how long they’ve been on the market as an indicator of demand.
Realtors Only Use Relevant Comparisons
An experienced Realtor understands that sold comparisons must be relevant. A home north of the city could be tens of thousands of dollars less than a home of the same size and condition in city limits. Factors such as school districts, access to highways, retail, businesses, and the current demand to live in a particular community all matter. The location of your home is a huge part of its value.
Market Statistics Can Help Confirm Confidence
Realtors continually evaluate pricing data all over the areas they serve. They have a wealth of data at their fingertips to provide you with local market trends. For example, if there is low inventory for two bedroom condos in your community, a Realtor may be able to suggest a higher price than units that sold several months ago when there was more for sale. She can also tell you median sales prices for your neighborhood in a particular timeframe (for example six months ago versus the past month), or the list price vs actual price differential in homes sold. All of this data can help you feel more confident in the price that you choose to sell your home.
If you live in the Greater Cincinnati Area and are thinking of listing your home, call Platinum Service Realty for a free consultation and comparative market analysis of what your home is worth: 513.229.2088.
Real Estate Term of the Week
Comparative Market Analysis (CMA): An estimate of a home’s value based on recently sold, similar properties in the immediate area. Real estate agents and brokers create CMA reports to help sellers set listing prices for their homes and, sometimes, to help buyers make competitive offers.