I'd be happy to explain some specific questions that you may have about how we set our Estimates on property values. But to get you started, we have a pretty good blog post on the subject that could have the answers you're looking for.
If you still have questions after reading this, feel free to reach out to me directly.
Community Manager, Trulia Voices
Recipient of the 2011 Rising Star Award
RE/MAX Town Centre
330 E Central Blvd, Orlando, FL 32801
c. 336.404.8871 t.407.996.3200 f.407.843.2033
Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.
Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called â€œchasing the curveâ€) and Buyers will be asking the question; â€œWhatâ€™s wrong with that house?â€ and â€œWhy has it been on the Market so long?â€
Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; â€œArenâ€™t you obligated to sell at this price if someone offers it?â€ The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)
Different Banks have different philosophies about pricing their properties: You cannot draw any conclusions without a good analysis.
Have your Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. It is the surest way to determine the Market Value of the property.
To name a few: closed sales within past 3 to 6 months in 1 mile radius, expired listings (to see the trend), pending and back up offers, active listings (in a changing market environment - to see the trend). It also helps to know the condition of all comps, their features (in comparison with the subject property) - so that the necessary adjustments could be made (as per appraisal code).
Asking price on any property could be on target, underpriced (like in some foreclosures) and overpriced (where the seller either "testing waters" not really wanting to sell yet, the agent is not familiar with the area, or the seller ignoring the comps for some reason).
As you can see, there are a lot of components involved in a property pricing process.
To help you understand the market better, before making your offer, have your agent look into above - and have him/her give you typical sold to asking price ratios. While this ratio is helpful, it does not guarranty that your offer will be accepted - because there are two parties involved here - the buyer and the seller, and they have to both agree on terms. Also, consider the trend (upward or downward) and know that the seller is watching the trend just like you do.
Auto valuations are (as other agents commented) are wrong most of the time - and they create a lot of confusion for the buyers. However, the trends shown on some sites are pretty good.
I like Zillow.com's trends.
Hope this helps,
Beachfront Realty, Inc.
You could go to Zillow and see if their 'guesstimate' is closer to the price. There is NO shortage of online places that will produce a number and place a label containing the word 'value' in it.
Even the property appraiser can not resist placing the words 'market value' in their data labels. The consumer must read the disclaimer...all of them to get to the basis for that number. Further analysis of this number will reveal it is, consistently as much as 40% off.
AGGREGATE WEBSITES ARE FOR ENTERTAINMENT PURPOSES.
If you are going to make a real estate decision, you need real tools. Stop playing around.
There is no shortage or real estate professionals able to give you access to the real tools and reliable guidance. Of course the choice has always been your.
If you are looking in the Orlando, Tampa, St Petersburg area you can get access by creating an account.
Real data for making real estate decisions.
Market Value, Zestimate, WAG, and whatever else there is on the internet is a computer program's guess using an algorithym based on nearby sales. They are almost all pretty worthless at the micro economic level, but they sure are fun.
Seller's Asking Price is rather self explanitory.