As we work with sellers every day, one of the questions that comes up consistently is “What is my home worth in its present condition?” (Since we work with many attorneys, personal representatives, and investors most of the properties I deal with need some renovation) That’s a “loaded” question, but most of the time the person asking already has an answer that they want us to “approve.”
High or low, that number sticks out in their mind like a sore thumb. In most instances they’ve gone to the Internet and were amazed by all the “bells and whistles” that sites like Zillow, Trulia, and Realtor.com provide them. They leave with their magic number, certain that the all knowing algorithm must be right.
The Internet has a plethora of sites that provide “guesstimates” of a property’s value. The disclaimers that come with those guesstimates are always ignored, yet the estimate itself is written like words in stone for better or for worse in the sellers mind.
We as a professionals of course have much more “refined” sources that consider local market vagaries and nuances. This knowledge and our experience has proved the absurdity of prognosticating a single number that a home will sell for. We must help our clients understand the weaknesses and shortfalls of sites like Zillow and Trulia without speaking a word against their trusted computer friend.
When we meet with a client our explanation goes something like this. (This is a severely abbreviated transcript)
“Marketing a property is an art, not a science. It’s our goal to get you the highest price for your property. In order to do that, we need to look at your house and the features it has and compare it to the most recent “historical” values of similar properties in your immediate neighborhood. We must also consider present market trends such as buyer predilections, financing availability, and the colors of your walls!” I generally pause here and laugh.
“Of course we will look at square footage and location, but we must also consider condition and modernization. Buyers in this market want modern stainless steel kitchens, modern bathrooms and sleek hardwood floors. I know you’ve seen what I’m talking about at some of the sites you mentioned.”
I always get a “yes” here.
I continue. “This property has a great location, but it lacks some of those features. It’s my job to appeal to the largest segments of the market – owner occupants and investors, to get you the highest price.”
“We have to price this house competitively to get both of those segments to look at “us” and want to buy this house. I call this the “sweet spot” and when we hit it we know it my what the market tells us thru showings. I’m going to give you a range of value where we should market the property.”
At this point I show them the Comparative Market Analysis, CMA, that I prepared for them and explain it to them line by line. I then conclude. “These houses provide a value range, a floor and a ceiling, if you will, just like we have here in this house. The floor is lowest the house should sell for and the ceiling is the highest price it should sell for. Remember, it’s my job to get us into that sweet spot and let the market be the final arbiter.”
Now, notice we never once mentioned the “zestimate” that Zillow touts as market value, but we got the clients to agree with our range. That’s the job of any good professional to quite the discordant voices of error and confusion around them and to help their client understand what it is they are going to do for them to solve their problem. We never, ever disparage others. We let our clients know what we’ve done and explain how we will help them. We listen. We feel. We show interest and compassion. And finally, we do what we promise.
Algorithms can’t take the place of experienced and knowledgeable professionals. Our clients will attest to that fact.