Pricing Process - Sloppy Work

I spent all winter looking up houses that sold in our neighborhood and doing "comparables" to see where our house should be priced. I did not do a strict CMA (Competitive Market Analysis) the way a realtor would do it -- I looked beyond our zip code and used very wide criteria to compare homes. I truly spent months doing this over and over.

Then I put it aside.

When we signed the listing contract last week, I was disappointed with the process used in the formal CMA that was presented.

There were glitches, like they sloppily counted one sold property twice, skewing all the stats. Their comparables included a foreclosure but not other non-foreclosed sales in the neighborhood in the same time period.

Not counting the duplicate or the foreclosure, they showed us five 2-bedroom, 2-bath, 2,100 sq. ft. models in our development and presented those as comparable to our 3-bedroom, 3-bath 2,500 sq. ft. model with loft, solar panels and larger lot. I was not impressed with the work that went into the comps -- they just picked some of the houses that sold (not even all of them in the time period) and said "this is what two bedroom homes in your development sold for. Yours could sell for those prices too."

They made no attempt to quantify if our home was different in any way that would affect price.

So we discussed it, our realtor was open to adjusting, and we added $20,000 to the comparables to come up with our asking price. And, although I had forgotten about my work last winter, the eventual price we settled on was exactly the price I had come to months ago. I'm not sure if that's meaningful or random.

In my analysis the increase in price over the realtor's comps was for these things:

• Larger square footage overall
• Additional family room in loft
• 3rd bedroom, 3rd bath
• Owned solar panels - our most distinctive selling point! (We save $1,200 a year on our utility bill vs. what we paid before. Over 8 years that's a $10,000 advantage to buying our home.)
• End of cul de sac location, larger lot
• Privacy - no one on our left or right
• Brand new kitchen appliances in 2017
• Not in foreclosure

But I also decreased our price compared to others for these things:

• Carpets in the bedrooms are old (they're clean and fine, just old)
• No fireplace
• No finished basement (some comps had finished basements, but not all)
• Corian countertops not granite, no undercabinet lighting, no tray ceilings

So our price point net of increases and decreases is now $20,000 over the smaller tightly clustered 2 bedroom 2 bath homes he had presented as comparable to ours.

Despite touring our home for an hour, investigating the yard, taking notes and checking out the solar panels, he had simply done no work at all to develop a CMA. He had his assistant print samples of sold homes on the next street, but only five were useful, if we take out the duplicate and the foreclosure. No analysis, no comparison, not even cursory research into what the solar might be worth, just a summary page saying what smaller houses in our neighborhood sold for over the past year.

I had to walk him through the obvious size differences and explain the solar panel benefit and estimate the lot size and cul de sac location advantage and then offset any disadvantages of our house.  So far I am glad his commission is only 5%, since I just did his research and upfront work for him.

Everything else in my analysis was a neutral for price -- our finished porch is nicer than the ones in the comparable homes, but that's a judgement / decor call.  I made no adjustment up or down for the extensive gardens.

So I am okay with our asking price. It's exactly where I thought we should be last winter. It makes sense to my mind if I factor in the increases and decreases compared to homes that have sold here.

But the process left me uneasy. The real estate advice I read says avoid setting your own price (a seller is too emotional and too attached to the home), and get a professional CMA for an accurate, spot-on assessment. But our realtor didn't do anything but present prices for smaller houses that sold nearby, with no adjustment up (or down) for anything, not even for an extra bedroom, an additional bathroom, or more square footage. Or for not being in foreclosure.

In the end, the market will determine our price. It's only worth what it's worth to a buyer, not to me or to a realtor or to a guy who bought another home on the street a couple years ago.