Accurate Market Analysis

Brokers are often asked by customers (potential sellers) to give a valuation of their property, especially early in the year before the market really heats up. Some brokers take great care to research sold, pending and active properties in order to form an opinion of value that is as accurate as possible. Some brokers “wing it” and make a guess. Some brokers just list the property for what the seller thinks it is worth without doing any research.   It is important to note that whether or not the broker spends a little or a lot of time on a Market Analysis, it is still just an opinion of value, not fact. Nonetheless, wouldn’t you rather have the most professional version of a market analysis where the broker has made every effort to be as informed as possible? Beware of the shoddy broker who offers an opinion of value on the spot without first gathering the available sales information! They will tell you that “they are just that good!”

Remember that a Realtor® generated market analysis is not the same as an appraisal (which the real estate broker is not licensed to do), even though the process is the same and the product is similar. An appraisal is packaged differently and is usually intended to protect a lender from lending more than the collateral is worth. A market analysis (CMA) or broker’s price opinion (BPO) should be a tool to protect a seller from underselling and a tool used by buyer’s agents to keep a buyer from over-offering. All the more reason for the real estate broker to be as accurate as possible!   

Some cynical consumers think that listing brokers intentionally over price properties because they will make more money, when the reality is that the listing broker makes zero money if the listing does not sell and they incur greater expense as market time extends.

Some broker’s business model is to intentionally under-price properties they list because they want to crank through transactions as quickly as possible and in some cases have lured the seller into that scenario by agreeing to purchase the property if it does not sell. While it may be true that those who use this business model might sell properties more quickly than others, those sellers may be losing real equity at the swipe of a pen. The  consumer will ultimately be the judge of those motives!

Jim Palmer, Jr.
509-953-1666
www.JimPalmerJr.com

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