Are You An Average Realtor?

By
Real Estate Agent with Keller Williams Realty

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.

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  1. Judith Parker 10/24/2011 07:07 PM
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Rainmaker
668,269
Jeff Jensen
Annie Mac Home Mortgage - Greenwich, CT

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

Oct 24, 2011 06:12 PM #1
Rainmaker
647,287
Barbara Hensley
RE/MAX Properties - Rockwall, TX
Homes for Sale in Rockwall County, Texas

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!

Oct 24, 2011 06:15 PM #2
Rainmaker
517,525
Jeanne & Ralph Janisch ABR CRS Brokers
The Durango Home Team at Keller Williams Southwest Associates - Durango, CO
Selling Durango CO homes to good people like you!

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.

Oct 24, 2011 06:47 PM #3
Rainmaker
509,374
Judith Parker
ProStead Realty - Charlotte, NC
CRS, GRI, CMRS, Charlotte, NC

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

Oct 24, 2011 07:04 PM #4
Rainmaker
482,133
Teral McDowell
Keller Williams Central - Plano, TX
Texas Realtor, Dallas and Collin County

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.

Oct 24, 2011 07:14 PM #5
Rainer
115,915
Brian Schulte
Allison James Estates & Homes - Sierra Vista, AZ
SFR, Sierra Vista, AZ

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? 

Oct 24, 2011 07:24 PM #6
Rainmaker
701,382
Cindy Edwards
RE/MAX Checkmate - Johnson City, TN
CRS, GRI, PMN - Northeast Tennessee - 423-677-6677

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

Oct 24, 2011 08:22 PM #7
Rainmaker
378,454
Rose King
UTR, Texas Realtors - Friendswood, TX
Friendswood / Pearland Homes

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

Oct 24, 2011 11:44 PM #8
Rainmaker
888,716
Will Hamm
Hamm Homes - Centennial, CO
Where There's a Will, There's a WAY!

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

Oct 25, 2011 02:14 PM #9
Rainmaker
748,682
Gabrielle Kamahele Rhind
KGC Properties LLC, Tucson Property Management & Real Estate - Tucson, AZ
Broker/Owner

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

Oct 26, 2011 02:03 PM #10
Rainmaker
90,211
Craig Chapman
Call Realty / Access Appraisals - Mesa, AZ
The Value Guy

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?

Oct 28, 2011 12:45 PM #11
Ambassador
1,284,898
Loreena Yeo
3:16 team REALTY ~ Locally-owned Frisco TX Real Estate Co. - Frisco, TX
RealtorĀ® | Frisco TX Community Ambassador

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.

Nov 01, 2011 08:19 AM #12
Anonymous
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Nov 06, 2011 12:29 PM #13
Rainmaker
1,108,339
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

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.

Nov 10, 2011 05:08 PM #14
Rainmaker
556,060
Cherise Selley
Selley Group Real Estate, LLC - Colorado Springs, CO
Colorado Springs Realtor

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

Nov 19, 2011 10:41 AM #15
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Rainmaker
254,306

Connie Goodrich

CRS ABR (McKinney Realtor)Texas
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