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
644,334
Jeff Jensen
Annie Mac Home Mortgage

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

October 24, 2011 06:12 PM
Rainmaker
647,233
Barbara Hensley
Homes for Sale in Rockwall County, Texas
RE/MAX Properties

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!

October 24, 2011 06:15 PM
Rainmaker
517,329
Jeanne & Ralph Janisch ABR CRS Brokers
Selling Durango CO homes to good people like you!
The Durango Home Team at Keller Williams Southwest Associates

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.

October 24, 2011 06:47 PM
Rainmaker
471,448
Judith Parker
CRS, GRI, CMRS, Charlotte, NC
ProStead Realty

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

October 24, 2011 07:04 PM
Rainmaker
469,951
Teral McDowell
I am a Texas Realtor selling homes on land I love.
Keller Williams Central

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.

October 24, 2011 07:14 PM
Rainer
111,315
Brian Schulte
SFR, Sierra Vista, AZ
Allison James Estates & Homes

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? 

October 24, 2011 07:24 PM
Rainmaker
686,086
Cindy Edwards
CRS, GRI, PMN - Northeast Tennessee - 423-677-6677
RE/MAX Checkmate

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

October 24, 2011 08:22 PM
Rainmaker
378,248
Rose King
Friendswood / Pearland Homes
UTR, Texas Realtors

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

October 24, 2011 11:44 PM
Rainmaker
841,628
Will Hamm
Where There's a Will, There's a WAY!
Hamm Homes

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

October 25, 2011 02:14 PM
Rainmaker
738,498
Gabrielle Kamahele Rhind
Broker/Owner
KGC Properties LLC, Tucson Property Management & Real Estate

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

October 26, 2011 02:03 PM
Rainmaker
90,211
Craig Chapman
The Value Guy
Call Realty / Access Appraisals

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?

October 28, 2011 12:45 PM
Ambassador
1,276,635
Loreena Yeo
RealtorĀ® | Frisco TX Community Ambassador
3:16 team REALTY ~ Locally-owned Frisco TX Real Estate Co.

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.

November 01, 2011 08:19 AM
Anonymous #13
Anonymous
Anonymous

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

It's Sunday

November 06, 2011 12:29 PM
Rainmaker
1,108,089
Jim Frimmer
Realtor & CDPE, Mission Valley specialist
HomeSmart Realty West

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.

November 10, 2011 05:08 PM
Rainmaker
556,060
Cherise Selley
Colorado Springs Realtor
Selley Group Real Estate, LLC

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

November 19, 2011 10:41 AM
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Rainmaker
254,306

Connie Goodrich

CRS ABR (McKinney Realtor)Texas
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