Attention Sellers and Buyers I'm going to let you in on a real estate secret. I hate to admit it, but pricing a property is not an exact science. So how do we do it? 
Agents (and appraisers) look at comparable sales in the same neighborhood (LOCATION), perform a Comparative Market Analysis, evaluate price per square foot and add or subtract value based on condition. The next step is to consider current market conditions, the seller's sense of urgency, or lack thereof, and current inventory.
I've always found the most valuable asset in pricing a property is familiarity with the proof--recent sales, and the competition--current listings.
In order to know your market you must see the product. It's good to read about it, look at photos and watch virtual tours, but if you want to remove the stress and the guess from establishing a spot on list price I'll share my secret with you---PREVIEW, PREVIEW, PREVIEW.
Some agents never preview and consider it a waste of time and gas. I disagree, and that's why Tuesdays are devoted to attending broker open houses with my clients', both buyers and sellers, needs clearly in mind. Previewing allows me to speak intelligently about a property to prospective buyers, and it allows me to offer a suggested listing price to prospective sellers with confidence. I can't imagine listing and selling without previewing the product.
Whether my clients accept my advice or not is another story post!
Norma Toering & Team RE/MAX Palos Verdes Realty(310) 493-8333 / Office Phone: (310) 831-0800
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Norma Toering & Team RE/MAX Palos Verdes Realty
(310) 493-8333
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South Bay Los Angeles cities I sell real estate, property, houses and homes in: Palos Verdes Estates, Rolling Hills, Rolling Hills Estates, Rancho Palos Verdes, San Pedro, Long Beach, Torrance, Lomita, Redondo Beach, Hermosa Beach and Manhattan Beach. Based on information from the Association of REALTORS®/Multiple Listing as of the initial date of this article/blog publication and /or other sources. Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS. The Broker/Agent providing the information contained herein may or may not have been the Listing and/or Selling Agent.
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What a great topic. It's hard to explain to the Zillow afficionados that there is so much more to it than the numbers. It's a process which involves so much more than number analysis (although that is a critical component). A seller who is willing to listen to an experienced agent on pricing will likely have a much more pleasant, successful outcome.
Hi Norma;
Great topic and super post, thank you for sharing. Good Luck!!!!!!!!!!!!!!!
Colleen - Zillow's numbers are generic at best and are only as current as the tax assessor's records.
Anthony - Thank you, and it was on my mind since I was working on pricing a listing today.
I think previewing is important in pricing a home, I have taken my unreasonable sellers out on occassion to see their competition...it is amazing the change when people can see what others are offering for less.
Konnie - I've taken sellers to see the competition also. It's an effective way to establish value.