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How To Figure Out What a House Should Sell For.  Or I suppose I could call it “How We Decided The Price of Our Last 5,000 Listings”

Link to Notes from the Class

 Some of the items we cover:

If “Price per Square foot” was actually a valid method to price a home Zillow would be correct most of the time.

The problem is NOT that no one knows how to price property. The problem is that they don’t know what they know – they can’t teach it. It becomes “a knack” they have for figuring it out. But it’s not technology that can be passed on to others.

How to KNOW if you need to price ahead of, in line with or behind the “comps”.

A properly priced listing will sell (in any market)

How can an agent know if they are “fishing with their bait out of water”?

To some the most alarming event is on the horizon now – it is official that Zillow IS buying Trulia.  Some think they are going to take over the industry.  I don’t.

 I don’t think they are “going to do” much of anything.  They have already DONE it.  They just absorbed their only major competitor.  They now have the bulk of real estate web traffic.  This is not something that is “going to happen”.

 Zillow did not marginalize Realtor.com  You can thank the apathetic, always looking backwards, and only covering their own ass dunderheads that run the National Association of Realtors (and the blind bats that run MOVE) for that.  The meaningful things that COULD still be done – like shutting down List Hub completely and turning off ALL syndication – so Realtor.com would be the only game in town (like the Canadian version – and there is no Zillow in Canada!) will never make it past the, “We could never that” stage.  Translate: we will bury our heads in the sand until we are completely gone.  And the executives at MOVE (the company that runs Realtor.com) or anyone at NAR give a hoot about what is best for working Realtors.

 So Zillow eats their lunch, along with everybody else’s lunch too.  So what is this going to change now?  What is going to be different?  Does anyone really think that this is going to change something for Realtors?  Or for anyone else?  Will Zillow now REALLY raise their prices?  Or give even worse Zestimates? 

 Their two choices would seem to be: 1) keep the Trulia brand as a separate brand and just own and run it too.  Or 2) shut it down and give all the traffic to Zillow.  I believe they will choose option 1 – because that is the pattern of successful large companies (examples; General Foods, General Electric) but it won’t matter to anyone else which option they choose.

 Realtor.com is not and has not been “the Realtor’s friend” in any way, shape or form.  So there is nothing here for agents to win or lose. There is no “service” that Realtor.com provides the public or agents that can’t be better by someone else.

 Anyone who thinks or promotes the nonsense idea that Zillow plans on replacing all Realtors just can’t think very clearly.  They will not become a brokerage for the simple reason that it isn’t all that profitable to become a brokerage.  And if they “replaced Realtors” (if such an idiotic thing could be done) then they would become their own only customer.

 Unless you own stock in MOVE I don’t believe anyone reading this has a damn thing to worry about.

A few days ago I posted this update about the market:  http://www.nohasslelistingblog.com/2013/10/09/buyers-hit-the-pause-button/

 A friend sent me the following text:

 “Just read your blog.  What are you doing to get past this little stall we are in?  Any advice?”

 Yes.  When the market slows, as it has, it does not mean that “nothing is selling” or that it has all gone to hell.  Buyer activity (which is what drives the market) is never really constant.  It is always fluctuating – and therefore the relationship between supply and demand is seldom static – it is normally moving.  It is that relationship between supply and demand that tells you which way prices are moving.  Trying to determine the actual rate of increase or decrease WHILE it is occurring is difficult.  After the fact, it is an easy calculation.

 You can see examples of this by observing how major banks behave in pricing their REO properties.  They tend to be out of sync with the market.  3 or 4 years ago, they were under pricing everything in our area and the buyers would bid them up to the “actual market price”.  Recently, they have been overpricing lots of inventory.  Part of their problem is how removed they are from the scene and they usually rely on asinine economist’s data or the kind of crap companies like Core Logic churn out.  It is just simply wrong.

 No agent ever needs to make that error.  Here is what is true.  Any house is “worth” what a willing buyer will pay for it and a willing seller will accept.  Now.

 The is the point that is typically missed.  Now.  How much will they pay for it, NOW.  Not what did the agent think it was worth last month.  Or how much it might “appraise for” next year.  Now.

 Overpriced listings in ARMLS are not rare.  The Days on Market (DOM) count is growing.  Why?  Not priced correctly.  This is SO simple, even a Realtor can do it! 🙂