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
Your San Antonio TX Real Estate Agent!!
RE/MAX Access

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!

March 09, 2012 05:54 AM
Rainmaker
1,589,845
Dorie Dillard
Realtor-Canyon Creek- NW, Austin TX Homes For Sale
Coldwell Banker United Realtors

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!

March 09, 2012 05:56 AM
Rainmaker
966,366
Gary L. Waters, Broker Owner Waters Realty of Brevard, LLC
Personal Service, always.
Waters Realty of Brevard, LLC

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.

March 09, 2012 05:56 AM
Rainmaker
764,936
Mike Jaquish
919-880-2769 Cary, NC, Real Estate
Realty Arts

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.

March 09, 2012 05:57 AM
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John McCormack
AlbuquerqueHomes.com
Albuquerque Homes Realty * www.AlbuquerqueHomes.com

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

March 09, 2012 06:01 AM
Rainer
107,356
Leslie G. Rojohn
GRI, ABR ~ MoonDancer Realty
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.

March 09, 2012 06:11 AM
Rainmaker
1,733,247
William Feela
Realtor, Whispering Pines Realty 651-674-5999 No.
WHISPERING PINES REALTY

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

March 09, 2012 07:02 AM
Rainmaker
520,650
Maria Morton
Kansas City Real Estate 816-560-3758
BHG Real Estate - Kansas City Homes

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

March 09, 2012 07:32 AM
Rainmaker
204,179
Peggy Wester
Real Estate Agent Ozaukee & Washington County Real
Think Young Team--Realty Executives Integrity

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."

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

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

March 09, 2012 09:10 AM
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Chris Ann Cleland
Associate Broker, Northern VA
Long & Foster REALTORS®, Gainesville, 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.

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

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.

March 09, 2012 12:25 PM
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Bryan Robertson
Broker, Author, Speaker
Catarra Real Estate, Inc

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).

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

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. 

March 09, 2012 02:07 PM
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Richard Weisser

Richard Weisser Coweta Newnan Homes for Sale
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