How to lose $50 per square foot of value in your home!
When does a relationship get in the way of a good decision?
- The photo is not house used in this example
On some surveys Realtors are ranked just above used car sales man. Why? Here is one example why. Most realtors get most of their business from friends and family. They don’t have to be good or competent to earn the business. The person likes and trusts them because of the relationship. This creates an atmosphere for poor performance at best to downright incompetence.
Here is a recent example. A family member is a realtor and gets the listing to sell the property. They do a quick CMA and Zillow search to get a price. They sell the home at that price in one hour! Why? The selling couple put time and money into many upgrades that the agent did not factor into the price. Another more troubling reason is they had a buyer that could only buy at this lower price. The buyer could not afford the real value of the home. So the sellers accepted the family member realtor’s pressure to sell and made the deal.
The loss to the home owner selling is about $50,000 on a $460,000. The seller had put in an $80,000 pool. They upgraded to custom amazing cabinets in the home. They spent thousands of dollars and time in the back yard to create a remarkable outside living area and unique gardening experience. They raised the value of the home by $50 per square foot.
The realtor sold it for less than $10 over the CMA price, which sounds good, but is completely flawed. The CMA price was low because it used imperfect data for its search criteria. The price should have reflected the home owners’ sweat equity and upgrades. The list price from the flawed data should have been $50.00 per square foot over the CMA price. This cost the sellers $50,000 of profit on their home.
Please get a second opinion from a professional real estate agent before listing your home. Even if you game the system and not use the professional agent at least you can tell your friend or family member what the house should sell at. The selling price of a home is complicated. There are many value factors and personal issues to consider before setting the list price. I would strongly suggest for your personal well-being choose a professional real estate agent. They will have the skill set needed to market your home so you get the maximum value.
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