I have said it before. I am a numbers guy. I love crunching numbers and using statistics to identify trends and prove a point. Lately I have seen many, many agents touting the ratio of the final sales price to the listing price as a statistic proving their effectiveness. I have seen it in printed listing brochures, websites, and blogs.
In the Capital Region on average homes in 2008 are selling for 96.08% of list price according to the Multiple Listing Service. However, this stat is somewhat misleading because it figures based on the final listing price not the initial listing price. Agents often have several price reductions from the original listing price during the listing period.
I have seen agents take this stat and then use the list price to sale price ratio of their own sales and present it in a way that makes it looks like they sell your home for more then a typical agent. For example, John at xyz realty sees on average MLS listed homes are selling for 96.08% of list price. Yet his homes on average sell for 97% of list price. The logic used by many agents is "Hey on average I get you 1% more then the typical agent".
This is a complete fallacy and there is no basis to this argument. This argument assumes that all homes are priced exactly at market value. This is simply not the case! I see mispriced homes every single day. I love agents that say " I produced multi offers the first week and it sold over list price, I did a great job for my seller" Of course it sold over list- You listed it $15,000 below the market. Even selling over list you still shorted your seller!
This is the same argument I hear from For sale by owners. "What commission do you charge ?"is the question I always get. They always want to say they are saving 5%, 6%, 7% etc. but this assumes the price a for sale by owner obtains and a price I obtain are the same. I can tell you with 100% certainty that the prices will not be the same. My marketing will generally give the home more exposure to qualified buyers and will be higher.
I just pulled my home sales stats. For 2008 my listings sold at an average of 99% of list price. I am not patting myself on the back or telling sellers I will net them 3% more then the average agent. This simply means that after 17 years in the business as a broker and certified appraiser I know how to value a home at market value! If you are talking to an agent about listing your home be sure to ask them how many home evaluations they have completed! Valuing a home correctly, particularly in this market, is probably the hardest aspect of the business.
Don't be misled by manipulated housing stats!
If you have any questions please do not hesitate to contact me. Thank You!
Sincerely,
Kevin Clancy
518-861-7016
kevin@clancyrealestate.com
http://www.clancyrealestate.com
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