My New Outside Blog: Are You An Average Realtor?

Are You An Average Realtor?

700 Bluffwood Avenue, McKinney, TX - Woodhaven Stonebridge Ranch

 

Many Realtors when determining the value of a property utilize the Average Cost per Square Foot Method.  Simple enough.  You pull up the neighborhood on MLS, pull the sales for the last six months or so.  Do the math to determine what the average price per foot for the sales comes to then you apply that number to the square footage of the home .. Bingo you have the answer. A third grade mathematics exercise that Realtors trust to be the best way to determine the price a home is worth.

What if I were to tell you that this particular home is located on a large lot, has lavish landscaping, hand-scrapped wood floors throughout the first level, has a pool with waterfall, arbor covered outdoor entertaining area with built-in kitchen and fireplace?  Also what if all the sales in the neighborhood mostly did not have pools, located on smaller interior lots, did not have the extensive wood floors, etc.?  The average price per foot would indicated a far less price than the actual worth of the property.

The homeowner is interviewing several Realtors.  One has been in the profession for 30 years, holds several current designations, was recognized as the Outstanding Realtor of the Year last year by the local board, serves on several real estate commission committees and has a team of marketing specialists and client care specialist eager to make this a top notch experience for the client.  The other Realtors interviewed have been in the business for 5 years or less and all do not hold designations and their resumes seem about the same.  Do you think the seller will select an Average Realtor?  Do you think that a buyer really when looking at properties sees them all as average?  No, the standout property will merit additional monetary consideration.  It is not average and to apply such a simple form of analysis is just defaulting to Easy as to learn how to properly adjust sales takes some additional time and education.

One way to catch quick and deserved attention is to be the Realtor who gets away from applying the Average and actually adjusting for points of difference and deriving at a thoughtful conclusion as to the worth of a property.  It sets you above the average to the unique and demonstrates your expertise and additional arsenal of ammunition you will bring to the table for negotiations.

Being average is easy but being exceptional gets the best results.  You and your clients will benefit.  When I teach classes on how to value homes I put up on the overhead - No to the Average Price per Square Foot .. Don't Be Average.

Comment balloon 15 commentsConnie Goodrich • October 24 2011 06:09PM

Comments

I have always thought that should play larger role in value.  I have seen many appraisals with major discrepancies in that area lately.

Posted by Jeff Jensen (The Federal Savings Bank/Lending in 50 states) about 7 years ago

Connie - great advise!  Why settle for being average.  Clients deserve better than that from the Realtor they decide to hire. 

Get Out & About & Scare Up Some Fun!

Posted by Barbara Hensley, Homes for Sale in Rockwall County, Texas (RE/MAX Properties) about 7 years ago

We have always evaluated our properties based on lot size, location, amenities in the home, condition etc after doing the calculation for the averages PSF in the neighborhood.... adding or subtracting as necessary.

Posted by Ralph Janisch ABR CRS Broker, Selling Northwest Houston to good people like you! (Janisch & Co.) about 7 years ago

Hi Connie, great post and there is no need to be average.  Our clients deserve the best.  Suggest!

Posted by Judith Parker, CRS, GRI, CMRS, Charlotte, NC (ProStead Realty) about 7 years ago

It does indeed take a lot more time than stastistics; I attended your husband's class and I don't think I saw that banner but it was a good class.

Posted by Teral McDowell (Referral Patners LLC) about 7 years ago

Judith Parker sent me here ... Good Job!

A few years back I received a phone call from someone wanting to know the 'average' price per square foot in a particular neigborhood. Made several attempts to set an appointment to see their house and procure the listing. Knowing the area and not having seen it, I shot back "between $50 SF and $150 SF."  What more could I do? 

Posted by Brian Schulte, SFR, Sierra Vista, AZ (Allison James Estates & Homes) about 7 years ago

Great blog.  I have no doubt that you are NOT an average Realtor.  Above average all the way!

Posted by Cindy Edwards, CRS, GRI, PMN - Northeast Tennessee - 423-677-6677 (RE/MAX Checkmate) about 7 years ago

It's true that you have to consider all things before pricing a home - especially the lot size. Great advice!

Posted by Rose King, Friendswood / Pearland / Houston Bay Area (David Tracy Real Estate) about 7 years ago

Connie,  You are right on target,  figure out how to WOW everyone!

Posted by Will Hamm, "Where There's a Will, There's a Way!" (Hamm Homes) about 7 years ago

HI CONNIE!  I can only hope that I am way above average like you are!  I liked this one Connie!

Posted by Gabrielle Kamahele Rhind, Broker/Owner (KGC Properties LLC, Tucson Property Management & Real Estate) about 7 years ago

This is excellent advise, especially if the house is worth more due to things like you mentioned. But, if the opposite is true, like a house in need of updating or repairs, the above avg approach will lead to a lower estimate of sales price. Sellers often will pick the agent who says they can get a higher price. I know it doesn't make sense to think you can sell a fair condition house for the same or more than a similar one in good condition, but people get greedy or someting & sometimes just don't listen to good advise.

When I see nice houses priced way below market, I just wonder what was the listing agent thinking?  Quick commission, or they did not know how to price it right?  Are they being ethical or living up tho their fiduciary to their client? I've seen agents who brag about being able to sell their listings in days, when the normal market was a lot longer.  It is supposed to make people think they are some kind of a superstar. In reality, it often means they under price for quick sale. Could an agent wind up in a law suit for under pricing a home & causing a client to loose a lot of money on a sale?

Posted by Craig Chapman, The Value Guy (Call Realty / Access Appraisals) about 7 years ago

Connie - I'm not the "average" realtor. So many people catch me (simply because I'm a Realtor) about AVERAGE PRICE per SQUARE FOOT. It really catches me at a surprise because I usually don't know what to say. It's not quite something I "study" because no home is AVERAGE.

I think you've inspired my next post.

Posted by Loreena and Michael Yeo, Real Estate Agents (3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co.) about 7 years ago

....Friday’s child is loving and giving,
Saturday’s child works hard for his living

It's Sunday

Posted by Not a real person about 7 years ago

I don't know anyone around here who uses the average price per square foot. However, I can always tell when someone comes here from an area where they do because then they always bring up the subject of the average price per square foot.

Posted by Jim Frimmer, Realtor & CDPE, Mission Valley specialist (HomeSmart Realty West) about 7 years ago

Connie,

No doubt average does what average does - the very minimal.  So, no, I wouldn't consider our efforts or the results thereof average.  Neither would I consider you average just from reading your blogs... g

Posted by Cherise Selley, Colorado Springs Realtor (Selley Group Real Estate, LLC) about 7 years ago

Participate