David Bacon, Home Buyer in Colorado Springs, CO

There is a considerable discrepancy between the SP/LP percentage quoted by my realtor on homes in NE Colorado

Asked by David Bacon, Colorado Springs, CO Thu Feb 28, 2008

Springs (97%), and the spread indicated by Trulia's web site, which gives the average list price as $270,589 and the average sale price as $213,049 for this area. Who is right? I have already been a little harsh with my realtor on this point, as his partner is the seller's agent (the seller requested that his agent not act also as buyer's agent, so she nominated her partner, whom I accepted).

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Hello David,

Believe it or not, there is a thing called Dual Agency in some states where the buyer and seller are fully represented by the same agent. How you can net the seller the highest amount of money and get the buyer the best deal is beyond me, but it's legal! Rediculous, but legal.

Sales price and list price variances are something that you shouldn't pay attention to unless you are listing a home with a realtor whose SP/LP is very close. If it is close that means they either hit the value on the button or they are one heck of a negotiator. Either way they are worth having in your corner.

The SP/LP for an entire area is of little value because you can be averaging what a less knowlegeable agent did in pricing a home too high or low to start with, a home listed by an agent who represented a seller who wanted far too high of a price, etc.

When we represent buyers we can usually hook them by showing them the LP/SP of offers we write and get accepted. This isn't a common practice here, but when you can show a buyer that you are able to get lower offers accepted consistently of course they will want to use you! It's a skill.
1 vote Thank Flag Link Wed Sep 15, 2010
Thanks also to Cyrus and to Susan.

One other little point...did anyone else find it rather strange that the seller's agent could so easily subvert the intent of the Colorado law that allows sellers to request that the buyer's agent be a different person (which seems clearly designed to avoid conflicts of interest) - simply by substituting her partner? Even if that is legal, it seems a little dodgy. Of course I didn't have to accept that partner as my agent, but I saw no reason not to at the time. (Since then, however, I have to admit I have become slightly less than comfortable with the situation; and I am not entirely convinced he is representing my interests properly either, though at this point this isn't really much more than a vaguely uneasy feeling on my part.)

- dB
1 vote Thank Flag Link Fri Feb 29, 2008
Trulia, Zillow, etc... are all based on Public Assessor Records. Public Records does not account for seller concessions. If a house sold for $250,000 with seller concessions of $8,000 the info on the internet/public records will publish $250,000. Not what the seller actually netted which was $242,000. Also, online sources typically are not accurate in regards to square footage which could cause huge discrepancies. Both, combined are probably contributing to this wide margin along with other possible factors.

Unless you take exact comps (specific address) and compare them to your agents comps we're simply guessing as to why. The comps you are looking at could be completely different than the comps your agent is using.

Values cannot be determined solely based on public records. If they were that reliable banks wouldn't require appraisals and appraisers wouldn't have to be licensed.

Public records is a good resource BUT don't solely rely on it. Having a trustworthy and knowledgeable agent is most important. Ultimately, follow your gut. If you've looked and watched the market you should have a good idea of what is realistic.

Good luck,
Susan Walker
1 vote Thank Flag Link Thu Feb 28, 2008
the average list price is just that a "list" price, i.e.before closing. A list price doesn't have anything to do with reality. The sale price is what the property actually sold for, Why are you having trouble with that?
0 votes Thank Flag Link Wed Sep 15, 2010
David,

As Realtors, we understand your pain, as we live through it daily. You have two issues listed in your question. I will attempt to clarify both. The Listing price is an average for the geographical area Trulia has set for your home. This may not be the best place to get to your specific value with a buyers broker, but rather a Comparative Market Analysis (CMA) performed by your broker is the best way to arrive at a good number to offer. While subjective, this analysis will take into consideration the actual sales of the type of home you are looking to buy. CMAs typically use Solds as the prices to arrive at the value you should offer for a home. If you are looking for a objective 3rd party, get an appraisal on the property. If you are using a lendor, they will order one anyway, but this will get you to the best number for the price quickly. If you are looking for a right or wrong answer, sale price is the right answer, as that is what people are paying for homes in that area, with the caveats above.
As for Seller and Buyer agency, Colorado permits a broker to work with both parties in the contract by acting as a transaction broker. There are certain duties that a broker must perform in these arrangements and should have been given to you in the Definitions of Working Relationships. The arrangement you are in meets those criteria.
All the best in your home buying endeavor.
0 votes Thank Flag Link Wed Sep 15, 2010
I know exactly what is happening....the MLS is based upon the MOST RECENT LIST PRICE!!
For example a $210K house sits for three months...so they drop the price $10 grand to 200!
and it sells for 190 so the MLS data says it sold for 95 percent of list price, when its actually like 90% This results in some confusion for many.
0 votes Thank Flag Link Thu Feb 28, 2008
Thanks, Brian. I agree that zillow is also a worthwhile reference point. I'm not familiar with http://www.nexttag.com (in fact my browser seems to redirect that to nextag.com, which appears to be something quite different). Incidentally, I found it a bit odd that my realtor had never heard of Trulia, as I think it must have been one of the first things to pop up in Google when I first started searching. - dB
0 votes Thank Flag Link Thu Feb 28, 2008
Here is the Denver area it varies from subdivision to subdivision. I thing it should be the same there. Ask your Realtor for the comps and check the comps on Trulia. See if you have the same comps. Also check out http://www.zillow.com and http://www.nexttag.com and see what they say. The list price of $270,589 to the sold price of $213,049 seems like a huge difference. That is saying the sellers on average are getting only 78% of asking price? Seems low. Check into it a bit more and ask your agent for the comps.
Web Reference: http://www.kennaandco.com
0 votes Thank Flag Link Thu Feb 28, 2008
One point to note is that my realtor's numbers (ostensibly straight from the MLS) are median values, whereas Trulia's are averages, but that still does not explain the huge difference. - dB
0 votes Thank Flag Link Thu Feb 28, 2008
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