Comps and Psychology When Trying to Determine A Home’s Value in the First Week on the Market
Hey, Jim Duncan, Nest Realty, RealCentralVA.
When a buyer says, “what is this house worth that came on the market yesterday?” f it’s a highly desirable property, my answer oftentimes is I, I don’t know. It’s that first one to five days where the question for buyer is what is it worth to me to offer on this home and still win or lose? So I like round numbers. If the house asking $500K and the buyer says “I need to have that house,” and they’re willing to pay $550K to $575K and they win that offer, will they have won? Will they be able to sell it for X and not lose money in three to seven years or 10 years?
And if they’re asking $500K and they offer $515K and they lose, how will they feel that first one to seven, ten days is the challenging part to determine value?
It’s much more psychological and emotional at that point. And once we get through that first week or two, then we can have a much more substantive data focused conversation about what the house is worth and the seller oftentimes to that point will not have realized their hopes and dreams of getting a bidding war.
And then it’s much more a what are, what is the house worth based on the data and the market and the comps, and a much less emotional conversation for frankly, all parties.The hard part is that first one to five days give or take where we’re trying to figure out, you know, what’s the house worth.
Questions? Jim Duncan, 434-242-7140
These weekly videos from Mike Simonsen with Altos are must-watches.
While he looks through the national lens, much if not most of what he’s saying is applicable to the Charlottesville – Albemarle real estate market.