Part of the process in preparing a home for sale is to determine the price, of course. To help do this, I research the recent closed sales and active competitive listings. This is called a Competitive Market Analysis aka CMA.
When working on CMAs, I am always reminded of the old saying, “There are lies, damned lies and statistics.” Sure, CMAs help guide us to find the right range when working with the seller to set a competitive price, but a lot of emotions play into the decision, too.
We want to see value in what we own and love–especially those things we are trying to sell. Our emotions are not always in sync with the market forces. We can easily assume more value based on our own experience with a home. We assume a higher perceived value from the improvements we have made. And, we all want a good story to tell…that our house got so many offers and broke the neighborhood sales record. And, sometimes we just need to net a higher amount than the market will bear.
It is in times likes these that I find it helps to drill down into those statistics in the MLS database. Often there are other defining features that guide prices which are not always easily apparent in the MLS.
One client I worked with could not abide the fact that their fabulous home was just half of one block into a less desirable school boundary. That particular dividing line meant a price difference of at least $50,000. (That other old saying–”Location, location location!”)
In many neighborhoods, proximity to certain locations adds a lot of value. Here in Portland, many buyers want to be walking distance to New Seasons Market. There is no “New Seasons” field in our MLS, so we look at other homes close to a New Seasons location and see how much that affects price.
Also, here in Portland, an old oil tank for the heater can decrease value because they are so difficult and expensive to decommission, but it is not often easy to determine if there is one or not. Time to call out the folks with metal detectors to find out for sure.
A lot of research and statistics and little “going with your gut,” and hopefully we land at a competitive price that makes the seller–and the market–happy.