patrick.net

Per square feet. Even though every residential realtor runs their shop as if ma and pa were still in charge we the market can easily side step them with per sq. ft. calculations. If commercial RE is based on it so should residential. (We are supposed to be the most advanced economy on the planet are we not?) It eliminates the dreaded Emotion that creeps in when we are overwhelmed with information consumption. And yes, it should be the PSF of sales. This also gives you the chance to smooth out current market insanity and gets you closer to the normal valuation.
P.S. one other sign of a manipulative person’s (commonly referred to as Re*@!#@&s) is sales volume marketing. What the frikking H$!! do I care about her sales volume????

Very good point Patrick!
Along the same lines, I keep hearing people talk about how much a property is "worth" - a property is worth what someone will pay for it now, not what it was 5 years ago, not what it could be in another 5 years, not what the assessment is on it.

I could see making a big deal about "percent of asking price" for an agent and owner who realistically price the home after doing a comprehensive market analysis and asking honest questions about how badly the owner needs to sell. Unfortunately there are WAY too many agents out there who are "buying" listings promising grand selling prices, and handling sellers in a dishonest fashion just to get the listing and hold on to what remains of their real estate career.

We recently sold a home in a suburb of Chicago. for $7000.00 under our initial asking price on an offer that came 45 days after we listed. We sold it for less than I wanted to, but we wanted to sell and make a move for a better school district. We priced realistically as evidenced by a selling price that was 97% of the asking price.

Till this day I am still wishing for the MLS system to charge the listing agents money for every 30 days a listing is posted.

Right now it's no different from craigslist (car listings). Ten cars for sale, and 9 of them weren't even serious to sell in the first place. But if an idiot is willing to give them 20k for a 10k car, they'd sell. You never saw overpricing like this back in the old days when selling a car required you to pay a newspaper company to print an ad. Anybody listed on the paper is dead serious about selling.

Even eBay has an insertion fee.

chemechie says

Very good point Patrick!

Along the same lines, I keep hearing people talk about how much a property is “worth” - a property is worth what someone will pay for it now, not what it was 5 years ago, not what it could be in another 5 years, not what the assessment is on it.

Been saying that for years. In business anything is only worth what someone is willing to pay for it.

It was so dumb, that for a while there was this mass stupidity sponsored by federal government which was bribed by Fannie, Freddie, Countrywide and other similar institutions. So many people just thought houses just magically go up, and thats in a nation where we have the most graduates in business administration compared to any other nation.

Of course the actual sale price is often not what's reported as the selling price either. The price reported is lower so then the real estate taxes are lower. The rest is cash under the table.

Jeff O,

You said, "We priced realistically as evidenced by a selling price that was 97% of the asking price."

That kind of misses the point. :-) More accurately and more importantly, your selling price was 100% of your selling price.

What value does the 97% give you above? The only relevant piece of information that will be, and should be, recorded, is the selling price.

Need to disagree with you. Realtor's logic is fine.
“Percent of asking price” is important to a seller(perhaps not to analyst, not who he targeting in the advert) .
I don't want a realtor telling me my house is worth 130% of the going rate to get the listing.
I want an honest estimate that leads to a realistic listing price. Otherwise I end up
not selling for months and have a tough time getting buyers to look a second time when the
price is lowered.
Many realtors will say anything to get your listing. They don't loose a cent of commission
just because you are paying both a mortgage and rent for months.

robertoaribas, excuse me but it =is= happening. Especially in places where the real estate taxes are high, like Chicago. That "gift" under the table is one that keeps on giving in the form of lower r.e. taxes every year onward. And, the ones who are doing it seem to be the cash buyers. This is becoming a market in which banks are being by-passed and real estate transactions are being handled as "rent-to-own" and in cash. It's a whole new brave world out there.

What are the best websites to find the actual sales prices of houses? This information does not seem to be readily available.

I know this is crass, but when I first moved to Los Angeles I was told that the women thought their pussies were made out of gold. I never really got that until witnessing it first hand. Now, its not just the women, its house owners. They think their pile of dirt, wood, nails, plaster, piping, wiring etc. is made out of gold. Come back to earth house owners, if someone doesn't love it, it gets worn out. If someone doesn't want it or can't afford it, it gets used on the cheap. You get the idea....

bzaz says

What are the best websites to find the actual sales prices of houses? This information does not seem to be readily available.

The MLS cannot be trusted, since it is only a sales tool designed to get you to overpay for a house.

The counties have the official sales data, but there are 3,143 counties, and most of them have their own websites. It's a pity no one has collected that data in one place yet.

One hazard to county data is that they can also be wrong. For example in San Mateo County CA where I live, they record only the transfer tax, which is supposed to be proportional to sale price. But there is no rule against overpaying that tax to make the sale price look higher.

A good thing about county data is that the mortgages have to be publicly recorded there as a lien against the house, so you can at least look up and see how much someone owes. Well, maybe you can. The counties are often less than motivated to share "public" information, because they're often infested with Realtors(R) who don't want the public to have an easy time figuring out what the truth actually is. Might cause people to pay less, or to not buy at all until prices fall more...