home is 2700sf, agent compare it to 1500sf, sets price to low.

Asked by Jill, Texas Tue Sep 11, 2007

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Suzanne Walk…, Agent, Oklahoma City, OK
Tue Sep 11, 2007
Please ask the agent why they compared your home to 1500sf homes and to explain their pricing strategy. See if the answer clarifies this concern for you and proceed from there. Sylvia is right you are in control and I appreciate the fact you are trying to understand better so hopefully our responses will help but your best bet is go back to the agent and ask 'why'.

You are going to get a lot of 'what if' scenarios since none of us know why the agent did this and they might help you understand once your agent clarifies. Here is one more 'what if' scenerio that might have happened assuming your agent is competent.

In my experience if I am dealing with a property that is unusually larger than the comparables I can't price it based on square foot price alone. (FYI- no property is priced on square footage alone) Let's say the average square foot home is 1500 sf in the neighborhood and sells on average for $100 a sq ft. Obviously the average price point for the neighborhood is $150,000. Then I look at the 2700 sf home. If I price the home at $270,000 I know I've got the castle in the neighborhood problem. The castle in the neighborhood typically takes a lot longer to sell in a sellers market much less the time it will take in a buyers market. Most people looking to spend $270k on a home will not be shopping a neighborhood with the average home being $150k. Unfortunately, for people who own the castle in the neighborhood, the smaller homes pull their value down in terms of square footage price. The larger the home is in comparison to the comparables the less money per square foot. This also occurs on the opposite end. The smallest homes get more per square foot.

What might help if our responses are completely non applicable is detail your question a little more. The more information we have the better we can answer your question.

Good luck.
1 vote
J Lo, Home Buyer, California Glory, Brentwood, CA
Wed Sep 12, 2007
It is clear that your agent has not made the case sufficient enough for you to understand the reasoning. I would say you need to go directly to the source and get the reasoning behind the action.

However, remember what Sylvia states below: You determine the price - the agent typically only makes a suggestion based on the actual market survey. If you did not get all the information - then it's time for the sitdown with your agent.

If you aren't satisfied - then I suggest you bring the agent's broker in on the discussion. Remember, you drive the bus! Don't make a decision you aren't comfortable with - there are too many agents out there, ready & willing to assist.

Having said this, I truly believe - this is a simple matter of a miscommunication. Besides, didn't the agent use more than one comp?

Again - much luck to you Jill - and I send my wishes for a quick sale your way!
0 votes
Chris Tesch, Agent, College Station, TX
Tue Sep 11, 2007
Jill, typically price per square foot is higher on a smaller home, If they were coming up with a price based on typical price per square foot prices they could potentially be way off.

Sounds like you need to talk to your agent and straighten things out. If your agent has really made a huge mistake you might want to ask the broker to reassign agents for you.

Good luck with your dilemma!

Chris Tesch
RE/MAX Bryan-College Station
Web Reference:  http://www.ChrisTesch.com
0 votes
Roberta, , Dayton, OH
Tue Sep 11, 2007
I would ask the agent that provided you the comparables why they used comps so much smaller to your home. It's generally ideal to stay within 300 sq ft +/- of the subject property, so homes between 2,400-3000 sq ft would be best. Maybe confirm the square footage of the comps and your home and find out if there was just a lack of similar sales or what the rational was to use the comps they provided. Even if there was a lack of similar sales, there should have been an adjustment made in your favor to reflect the additional square footage that your home has. If you do not get a good explanation, I'd sugest getting another agent to look at your property or hire a real estate appraiser. An appraiser will measure your home and confirm your square footage as part of their inspection to estimate your market value. Also, are you including finished basement area in your 2700 sq ft? Sometimes a finished lower level may not be included in the living area of a home on tax records, but the area still does contribute to value. Best of luck to you!
Web Reference:  http://www.RobertaREO.com
0 votes
The Hagley G…, Agent, Pleasanton, CA
Tue Sep 11, 2007
Are you using an agent or a Realtor? There is a big difference. Have you addressed this question to the agent? You can also talk to his broker if you have concerns.
Web Reference:  http://www.cindihagley.com
0 votes
Deborah Madey, Agent, Brick, NJ
Tue Sep 11, 2007
I think it is really tough to compare a 2700 sq ft property to a 1500 sq ft property. There may be good reason for it, and I would not challenge the comparison without hearing the reasons. Were there other comps? Closer to the same sq ft? Why were these two properties used in comparison?

If you do compare a smaller property to a larger one, the smaller property will pull the value of the larger one downward.

Did you meet w/ more than one agent and get more than one pricing opinion?

Only you as seller can set your price. A sellers agent may determine the ask price is too high and decide he/she cannot represent you as a seller. If your agent walks away from a listing because he/she says it is priced too high, he/she probably really means it is ovepriced.

In your example above, I would ask for some help in uderstanding why the conp was chosen, and what alternate comps could be used in discussion.
0 votes
Sylvia Barry,…, Agent, Marin, CA
Tue Sep 11, 2007
I am not sure how your agent can set a price without your agreeing to the price. The house is yours and you have to sign the agreement. I assume your agent did a comparable analysis for you comparing your house to like properties and explained how he/she priced the house?

Is the difference in the house only in square footage? Not saying your house is this way, but are there differences in the location of the houses (freeway vs. open space), condition of the house (complete remodel vs needing update or repairs?), neighborhood (desirable vs not), demographics around the neighborhood? floor plan of the house (sometimes some floor plan is very difficult to negotiate - one of the houses on an extremely desirable area is defined as tear-down because the house has strange floor plans). The lot location and condition (level vs slope?) or combination of several?

Again, I am saying any of the above applies to your house, i am just trying to point out that square footage is not everything when we price houses. Assuming he is not aiming for a quick sale, he should be able to explan his reasons to you until you are satisfied. .

If you still do not agree, then you can ask him to change the list price because the house is yours. Just make sure you price the house fairly and correctly. If you overprice your house, it can be difficult to sell - stay ahead of the curve is a good plan in this market.

Good Luck,
0 votes
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