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Real Estate Blog for Palo Alto, Mountain View, California, and Surrounding Communities

Blog by Lynne Mercer
Palo Alto, California
Selling real estate in the mid San Francisco peninsula is unlike selling real estate in any other area. Just as the geographical area is famous for its microclimates, the real estate landscape has its own microclimates, each with its own idiosyncracies. An experienced agent will be in tune with the subtle variations from one subarea to another. But it is always changing. In this blog I will attempt to capture some items of interest to buyers and sellers alike, and to have some fun as well (see ""Fun Stuff"). If you have information you would like to have posted on this website, please email your suggestios to Lmercer@Lmercer.com.

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Real Estate Blog for Palo Alto, Mountain View, California, and Surrounding Communities

Finding a Home's Value is Not an Exact Science
Aug. 5, 2006
Categorized in: Education Corner
Tagged with: appraisal, housevalues, listprice, realestatevalue, settingalistprice
“Finding home’s value not an exact science”   ….. This headline in the Sunday, July 30 San Francisco Chronicle Real Estate section caught my eye. Everybody in the real estate business knows and understands this. The price a particular home will fetch depends on many factors. Some, such as the condition of the home, the way it is marketed, timing, and the ability of the seller or agent to negotiate are under the control of the homeowner and the agent the seller selects. Others, such as the competition at that particular time, economic conditions, weather (yes, weather can affect sales value) and location are not.
 
In this particular article, the writer obtained estimates of value for a home in Seattle from four on line sources and one professional appraiser. The values ranged from $291,000 to $375,000. That is huge!! Interestingly, the professional appraiser’s original estimate (based on public databases that are also used by online estimators) came in at $400,000 but was reduced to $305,000 after the appraiser actually visited the house!
 
Setting a list price is easier if the house is in an area where there are many similar homes and there have been recent sales to use as a reference, although even then there will be differences between specific hoes. It becomes much more difficult when the home is a custom home in an area where there are fewer sales, making it harder to find recent sales of similar homes to use as a comparison. While it is possible to obtain a rough estimate of value by using online sources, the true market value will depend on all of the factors listed in the first paragraph plus a lot more.
 
It surprised me that the author of the article seemed determined to avoid getting an estimate from a professional, full time real estate agent who works in that area. These agents are thoroughly familiar with and know the nuances of the local market conditions that can vary from week to week and from neighborhood to neighborhood. They know what is happening NOW as opposed to relying on past sales (although past sales are used as a baseline). They will try to establish the seller’s motivation for selling and their time frame, both of which may affect value. They will determine just exactly what the seller is willing to do to enhance the property and make it easy to show. And they will know exactly how aggressively they personally will market the home. All of the above will affect the final sales price of the home. Whenever there is some uncertainty (maybe because it is a unique home, or the seller’s expectations do not coincide with the agent’s opinion of value) a professional agent may consult with other respected agents from that area before pricing the home. This is common in some areas of Palo Alto, for example.
 
Sellers should be aware that pricing a home is not an exact science and should be careful not to just list at the highest price offered. Be sure to consider all aspects of how the home will be marketed, the current market conditions, the agent’s expertise and many other factors before deciding which agent to list with and what the list price will be. And do talk to a local agent who is in a position to discuss all aspects of the sale before making you decision.
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