How Does a Real Estate Agent Price My Home?
Its a great question! There are many different ways in which agents price homes but, first we need to understand two things. Market Value and Market Price. Market Price is the way agents price homes. We find the most probable market price and choose this as the listing price. Market Value is the price in which the market actually will pay for it. Confusing? Let me explain, Market Value is simply what someone will actually pay for the home (offer).
Now that we're clear on that, the most common way if you live an area where are there are many similar homes is to pull properties from different areas that have recenetly sold. Real estate agents will then assess multiple things to determine prices. Things they look at our number of bedrooms & bathrooms, square footage, updates of the house, location of the home and lot, and if there are any things that may lower the price. The second way to price a home is by factoring the building costs to recreate the structure plus the market value of the lot. This method is used if there are very few comparables or nothing comparable to value the home by. Once the real estate agent has priced the home he/she will choose the best market value or the most probable price it will sell for. Pricing is a very key componet into how long a home will sit on the market.