Empirical data or gut feeling? Which do you rely on the most?

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Real Estate Agent with Better Homes and Gardens Real Estate Metro Brokers

Empirical data or gut feeling? Which do you rely on the most?As a real estate professional, it is my job to know my market and to understand it. And in the course of doing my job, I have seen thousands of homes for sale.

Maybe the number is more like tens of thousands of homes for sale. Rest assured, I have been in a lot of houses that are on the market.

I do a CMA (competitive market analysis) prior to a listing appointment which provides an excellent source of empirical data that can be used to determine a range of pricing.

But the minute I walk into a house, my gut immediately takes over and my internal calculator starts the tally. I know all of the selling obstacles and what buyers are looking for in a house in that neighborhood.

And after touring the house and as we sit down to discuss the pricing particulars; I have a pretty good idea of where we need to be.

If the truth be told, I rely 75% on my experience and about 25% on the data. Blind data doesn’t “see” the house the same way that I do.

How about you? What do you rely on the most when you are pricing a home?

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  1. Lenn Harley 03/10/2012 07:30 AM
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Ambassador
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Brenda Mullen
RE/MAX Access - Schertz, TX
Your San Antonio TX Real Estate Agent!!

Terrific thought process.  I think many of us rely on a gut feeling on where we can price the home within the market range of the data.   We need the data to show the clients though.  I think many of them might be a bit doubtful if we walk in with  and say I have a feeling this home may sell for this and that :).  Great post!

Mar 09, 2012 05:54 AM #1
Rainmaker
1,629,670
Dorie Dillard
Coldwell Banker United Realtors - Austin, TX
Realtor-Canyon Creek- NW, Austin TX Homes For Sale

Good morning Richard,

Empirical data is important but nothing is better than knowing the competition and what is currently happening in the market place. All real estate is local even among subdivisions in a given city. You are right on "Blind Data" is not seen the same way as someone who really knows the market place!

Mar 09, 2012 05:56 AM #2
Rainmaker
985,342
Gary L. Waters, Broker Owner Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Melbourne, FL
Personal Service, always.

I am a bit analytical so I am always happy when my gut instinct is validated. Maybe it is not my gut feeling just the fact that I know my market so well.

Mar 09, 2012 05:56 AM #3
Rainmaker
765,793
Mike Jaquish
Realty Arts - Cary, NC
919-880-2769 Cary, NC, Real Estate

I think I would be closer to 60/40, but, Richard, I certainly agree with your premise.

Data without experience to interpret and to understand intangibles is just data.

Mar 09, 2012 05:57 AM #4
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John McCormack
Albuquerque Homes Realty * www.AlbuquerqueHomes.com - Albuquerque, NM
AlbuquerqueHomes.com

Richard - I think the good ole gut feeling comes with experience, years of experience and as you said thousands of houses. 

Mar 09, 2012 06:01 AM #5
Rainer
107,456
Leslie G. Rojohn
MoonDancer Realty - Sylva, NC
GRI, ABR ~ MoonDancer Realty

I'm with you completely on this.  My gut is almost never wrong.  The hard part is convincing the client that the empirical data is a good starting place but it can't always get into the intangibles that an experienced agent just knows.

Mar 09, 2012 06:11 AM #6
Rainmaker
1,762,866
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Numbers are just a starting point.  The human element needs to come into play also as for as needs and what the people have done with the property

Mar 09, 2012 07:02 AM #7
Rainmaker
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Maria Morton
BHG Real Estate - Kansas City Homes - Kansas City, MO
Kansas City Real Estate 816-560-3758

Richard, I'm with you on this. 75 - 80% gut feeling and 25 - 30% data.

Mar 09, 2012 07:32 AM #8
Rainmaker
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Peggy Wester
Think Young Team--Realty Executives Integrity - Grafton, WI
Real Estate Agent Ozaukee & Washington County Real

What a great question. I tend to go with my gut once I get in the house. There's no way you can base price simply on the data -- unfortunately not all sellers "get that."

Mar 09, 2012 08:44 AM #9
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Liz and Bill Spear
RE/MAX Elite 513.265.3004 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Richard, Definitely a combo, but I'm heavier on the data.  Bill

Mar 09, 2012 09:10 AM #10
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Chris Ann Cleland
Long & Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Northern VA

If I'm working in the area I live, I can go on my gut because I'm in these homes all the time.  If I head east I need to get a handle on the empirical data in order to hone that gut.

Mar 09, 2012 09:42 AM #11
Rainmaker
244,274
Bonnie Vaughan
Re/Max Home Team - Scranton, PA
CNE SFR - Buyers/Sellers - Lackawanna & Surroundin

Richard:  In my market we don't have many traditional sub-divisions.  CMA is a yard stick not a given.  I do a CMA to have the data.  Like you I use my gut when I see the house.  The CMA either goes up or down depending on the factors I view.

Mar 09, 2012 12:25 PM #12
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Bryan Robertson
Catarra Real Estate, Inc - Los Altos, CA
Broker, Author, Speaker

I agree with you, 80% gut feel and 20% data.  I'll run a CMA when I'm back at the office but my impression of the home and knowledge of the market usually get me within 5% of what the CMA says (if not less).

Mar 09, 2012 01:20 PM #13
Rainmaker
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Nancy Conner
Managing Broker - City Realty Inc - Olympia, WA
Olympia/Thurston County WA

I think the empirical data can give an indication of the range of pricing that may be appropriate - but I totally agree that those gut feelings tell even more about where in the range - or if there is a reason why outside of the range altogether is the place to be. 

Mar 09, 2012 02:07 PM #14
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Richard Weisser

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