In Chatham, Orange & Wake County, North Carolina, home prices are currently going up. When looking at “comps” (similar, previously sold real estate), the pricing does not always reflect today’s price. A seasoned real estate agent will know what a house is worth TODAY and has a good idea of what it will appraise for. For example, homes in Durham which sold 6mos ago for $225,000 may currently be worth $250,000 due to appreciation.
Speaker 1: What is sharing comps?
Speaker 2: So one of the things that other agents will ask us to do from time to time is they want us to justify the price on our listings and so they’ll ask for us to share comps. Working as a buyer’s agent, you’re supposed to make sure that the value is in the property that they’re looking at. So, when someone, if you have a house for $300,000 in a particular neighborhood or an area, a buyer’s agent will investigate and see whether or not there are comps to support that asking price. So, that’s what a buyer’s agent will do for their buyer. Some agents will call you up and say, “Hey, Eric, I’m having trouble justifying the price that you’re asking. Will you please share your comps?” And as a matter of policy, I don’t share comps with other agents. And sometimes that makes for a little bit of a tense situation, but I want them to look at my history, go on Zillow, see how many homes I’ve sold in that neighborhood, see how long I’ve been doing this or whatever.
There’s a guy named Bill [Esenball] who’s an instructor that I took a class with. He’s a famous instructor in sales, guy out of Tampa Bay, Florida. And he said, “You don’t drive a car by looking in the rear view mirror.” And I love that because when we are trying to price a home, when you do sold comps, you’re looking back. And sometimes prices are going down and as they are right now, prices are going up, but it’s not necessarily accurate to look at what happened two, three, six months ago in pricing the home today. A good agent will know the value of a property today and he’ll feel as though or she will feel as though they’ll be securing the fact that it will appraise.
There are properties in Durham right now that they’re being sold for $225, $250 and those things are selling for $250 and $275, and they are appraising. So, there’s no way that people can look back and determine those prices because it’s an escalating market and those prices are going up. So when an agent says show me your comps, not all agents, but some of the inexperienced agents, they’re just being lazy. They have to do the work. It’s up to them to protect their buyer. I’m looking out for the seller. I’m trying to get my seller the greatest reward possible and it’s up to me to know what the market will bear and get that price for them.