Rumor has it, there was quite a bit of discussion today over a new listing that was on the agent’s weekly home tour. Without disclosing which home, let’s just say it was a common opinion that the home was underpriced by quite a bit. I’m not insinuating the listing agent intentionally under-priced the home to get a quick sale but, in a situation as fast moving as the Wenatchee (and surrounding area) real estate market, it’s not always easy to price any given property.
This brings me to the point of my post… the importance of getting more than one opinion of value from experienced agents who are active in the market. These "opinions of value" are known as "CMA’s" (Comparable Market Analysis). To go along with the CMA, an agent should also offer a "CMO" (Complete Market Overview). The CMO can spot overall trends (not target price related) and help the agent and homeowners determine what might happen in the future of the local market.
The general consensus, in soliciting a price opinion, is to get three agents (preferably from three different companies) to do a CMA. It is interesting to evaluate the comparables used by each agent and the compensating factors taken into consideration before coming up with a final list price.
That said, I also want to make a point of offering caution to homeowners who think they should list with the agent who comes in with the highest price. Some agents have been known to inflate their recommended price, thinking this will make them look better to the homeowners. The value of a home has nothing to do with any agent’s opinion. The purpose of the CMA is to determine the "market value" of the subject home. The "market value" is the price an owner can realistically expect a buyer to pay (and an appraisal to support). The agent is most likely not going to buy the home, so their opinion should only count for pricing consideration purposes, not for the purpose of actually selecting the listing agent. If the agent does offer to buy the home, this could be a red flag that it IS underpriced.
The listing agent should be selected based on their ability to market the property most effectively AND do the best job of representing the seller when it’s time to negotiate with a buyer and their agent. A listing agent should also be selected based on the likelihood of a good working relationship and open lines of communication with the homeowner. The homeowner should not be intimidated by the agent, nor should the agent be intimidated by the homeowner.
source: Wenatchee Home Price Opinions
