Okay okay my feathers are a little ruffled…
Are agents really honest with their clients when it comes to pricing a home? On a recent today show, it was implied that agents aren’t telling their clients the truth. Now here in Salem, OR , I , for the most part, have worked with really great agents from many different companies. I personally don’t like generalizations as they tend to become the stereotype, so I decided that I would put on my statistics hat and look at the real data. I have a master’s degree, which required that I take statistics, so I feel capable of running some basic stats for you.
The owner of Redfin, implied that real estate agents don’t know what they are doing, yet his real estate agents at his company were “computer scientists.” He offered tips on how to sell your home in the current market.
Tip #1 was Don’t Overprice Your Home.
I did a sample of the WVMLS (Willamette Valley Multiple Listing Service Data) for a specific area (#50 if you really want to know). I chose this area as it is a very desirable place to sell homes, as they tend to sell well and fast.
I figured if agents are going to do some puffing for listings, it will be here. I love when I get a listing in this area.
So since January 01, 2000, 2251 homes have sold and were recorded on the WVMLS for this specific area. I would have donned my totally complete scientist hat and run all of the listings, but I do have a life and job that needs attending to…
I looked at the difference between the ORIGINAL listing price, meaning what the price was when it first hit the MLS, and then the final sales price.
Here is how the Salem Oregon real estate agents fared in this area. The first column is what percentage over OR under the list price the final SOLD price was, and the second column is how often it occurred.
20% over list .13%
10-19% over list .62%
6-9% over list 1.29%
1-5% over list 15.9%
0% (sold at list price) 25.4%
1-5% under list 32.6%
6-9% under list 11.7%
10-19% under list 9.1%
20% or more under 3.1%
So 73.9% of the time, the Salem Oregon real estate agents were able to get a home seller within ±5%. If I made an assumption that these statistics were representative of the rest of the Salem market, then agents are “buying the listing” 3.1% of the time. I can’t think of any other reason for a home to be to require a 20% drop in listing price in order to solicit a sale. If an agent is giving you a CMA that far above everyone else, chances are they are in that 3.1% that buy listings.
I think the 6-19% category, which occurs 20.8% of the time, were due to the following factors: the agents probably failed to take into consideration a major defect (such as being on a busy street, odd floor plan, pet odor, etc); it was a rookie agent that was not as adept at pricing; or the seller wanted to list for more and the agent agreed.
Despite Kelman’s insistence that his agents are scientists, pricing a home is part art and part science. So, for those sellers out there, if you listened to the Today Show the other day, you can rest assured that 73.9% of the time, Salem Oregon real estate agents are going to price your home right on! Now, my personal statistics are way better than the average, but no need to gloat…
Melina Tomson, Salem Oregon Real Estate Market Specialist and “Scientist”
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