#1 Realtors Consider the Entire Neighborhood, Not Just Your Block
A mistake FSBO homeowners often make is selecting an asking price that is identical or very close to a neighbor’s asking price. Experienced REALTORs understand that properly pricing a home is not simply an exercise in mathematics rather it is a combination of math, science, and art.
The math is the objective element – that’s just running the numbers. Science is involved in knowing the area, its history and the safety of the neighborhood. Art is the hardest to obtain as it takes years of experience but it deals with understanding the psyche of a buyer, the target market and what their desires are in a home and the all-important ‘feel’ that cannot be described.
In her popular book titled ‘SURVIVING DIVORCE - Your House And Your Money’ Geni Manning explains that ‘properly pricing your home is the single most crucial consideration in real estate sales’. Geni writes that ‘there are many factors to consider, subjective and objective, and some data that only a REALTOR knows how to access – all must be properly weighted to accurately arrive at the all-important listing price.’
#2 Realtors Consider Recent Comparable Sales
To properly price a home for sale or any other reason such as property tax assessment comparison, REALTORs examine sales of comparable homes in the general area – these sales are within the last three to six months. This process is as much about the math as it is about the science and art of home selling. Homes that were taken off the market or expired listings are not considered - REALTORs consider only sold (closed) listings. To determine which sold properties are comparable to their client’s home, real estate agents will conduct a comparative market analysis or CMA.
In another of Geni's books, ‘INDUSTRY SECRETS - That Get Your Home Top Dollar!’ Geni discusses how REALTORs use CMAs to price homes for sale. Geni writes that ‘a comparative market analysis (CMA) is a “value-based” estimate of a home's market value based on recently sold, similar properties in the immediate area.’ Properly done a CMA compares several properties (hopefully 5 for statistical significance) based on common features such as age, condition, location, square footage and more as noted above.
#3 Realtors Consider Your Home’s Condition and Upgrades
Another mistake frequently made by homeowners is overestimating the value of the home’s current condition, updates and improvements. In her book ‘INDUSTRY SECRETS - That Get Your Home Top Dollar!’ Geni discusses the Return On Investment (ROI) of renovations and why not all will increase the market value of a home. A common pricing myth Geni addresses is the cost of a renovation should be included in the home’s list price, dollar for dollar. As she points out, ‘not all home renovations have a positive ROI,’ meaning that they might not actually increase the value of the house.
Referencing a recent report from Remodeling Magazine, Geni notes that ‘the average payback for 20 common professional remodeling projects in 100 major U.S. markets was only 63.8% in 2020.’ When pricing a home for sale, realtors take recent surveys of home buyer preferences into account. Buyer preferences – such as preferring an updated kitchen but not an updated bathroom -- affect how much certain improvements can reasonably be expected to add to the market value. While homeowners might not have this type of context, an experienced REALTOR will take it into consideration when settling on a pricing strategy.
Realtors Know How To Obtain Agreement On The Pricing Strategy
When in a divorce situation the pricing strategy is one of the most potentially contentious and volatile subjects because it directly affects the net proceeds from the sale that are likely to be divided in some fashion between the parties. Geni’s experience and wisdom in working with divorcing couples in the sale of their marital home is reflected in the title of her book, ‘SURVIVING DIVORCE - Your House And Your Money.’ Of course, the market value is also a key factor if one spouse is trying to keep the home and buy out the other as it establishes the equity in the property and the buy-out cost.
A heart of compassion and a unique talent are needed to help a divorcing couple navigate the intricacies of the sale of their property when emotions are often on a rollercoaster; obtaining agreement on something as pivotal as the selling price can be a challenge. Many of the same emotions being poured into selling versus keeping the home or being forced to ‘give up my home’ are just a part of what couples and their Realtor face.
As a Certified Divorce Specialist (CDS) with the National Association of Divorce Professionals (NADP) and Director of the Dallas/Fort Worth Chapter of the NADP Geni is prepared with the experience, qualification and connections to address most any issue that can arise in a divorce real estate transaction.
If you are thinking of, or in the middle of a divorce, we want you to know you're not alone and we’re here to help. If you would like to discuss how we can assist you with your future plans, please give me a call at 469-556-1185.
Disclaimer: The information provided in this website and our blogs is not intended for legal, financial or mental health advice but is for general informational purposes only. While we endeavor to provide the latest information on a particular subject, future changes to the source Information is beyond our control.