Price versus Value in Real Estate
 
During the past six months, I have had the opportunity to provide “Value Presentations” to a number of potential clients.   As a result of these presentations some have elected not to sell their homes because their financial objectives could not be met. Some have elected to place their homes on the market with the “Havre Team” and others have selected other agents to sell their homes.
 
Preparing a pricing presentation and determining “market value” is a combination of science and art. Comparable properties have to be chosen wisely, factors identified and adjustments made to the factors.   Once this is accomplished a value range is identified. Once must then look at the range and determine should one price aggressively or conservatively. If the market is leaning towards a Buyer’s market, it makes sense to price on the conservative side.  This process can take several hours.
 
When a potential client selects another agent, I always try to identify why the decision was made. I first identify the “listing price” and determine is it close to my derived value. In every case this year, the listed price was substantially higher than my recommend price. I then “track” the listings to see for what price they eventually sold.
 
This year not one of the six homes marketed by another agent has “sold”.   I ask myself what is causing these sellers to place their homes on the market for higher prices than the market will bear? Maybe I didn’t present my data where it was understood, maybe its greed, or maybe the other agents provided an analysis supporting higher values.
 
I noticed that last month 25% of the homes listed for sale in the multiple listing experienced a price reduction.   This figure includes new homes; therefore the figure is higher for previously owned homes.   What this information tells me is that Home Buyers must use caution when placing offers on homes so that they are not paying too much.   The best way to accomplish this task is use a Buyers’ Agent who knows the market and understands the relationship between value and price.   
 
Remember, the “Havre Team” is here to serve and is prepared to “protect your interests”.