Contents

Preface
Acknowledgments
Disclaimer
Introduction
About the Author

Chapter 1. History, Folklore, and Today’s Key Characters
Chapter 2. Applying Common Sense and Exposing the Nonsense
Chapter 3. Wearing the Buyer’s Hat
Chapter 4. Wearing the Seller's Hat
Chapter 5. Wearing the Agent’s Hat
Chapter 6. All Properties Speak for Themselves
Chapter 7. How Price and Value Really Works
Chapter 8. Measuring Emotions, Feelings, and Perceptions
Chapter 9. Using the Rating System and Worksheet
Chapter 10. Finding the Competitors and Identify the Factors
Chapter 11. Weighing the Factors
Chapter 12. Assembling and Interpreting the Data
Chapter 13. Raw Land, Apartments, Commercial, Farm and Ranch, and
Recreational Properties
Chapter 14. Quick, Down, and Dirty Thoughts
Chapter 15. Free and Other Stuff

Epilogue
Appendix A—Glossary of Terms
Appendix B—Moving Checklist
Appendix C—Home Preparation Checklist
Appendix D— Sample Clauses

Preface

Real estate plays an important part in almost everyone’s life and can involve some of life’s most important events. One good or bad decision, whether you are a seller, buyer, or real estate professional, can make a significant difference in your life, for better or for worse. If you rely on others to do your research, negotiating, or decision-making, you have two strikes against you with a curve ball coming. Possessing the right skills and information can increase your confidence and reduce your vulnerability. Both are offered here to anyone—no experience required—for the taking. You have just paid for them by buying this book. The power of information is real power, especially in real estate. Congratulate yourself!
Writing a book is like inviting the world into your private life. My private life has never been boring. I have always been an optimist, avoided conflicts whenever possible, and got the job done without offending or injuring too many others. However, after long and tedious meditation, and after considering the pros and cons, I have decided to make an honest effort to call bull dung … plain old bullshit! This industry, though it is one of the loves of my life, is full of it! So, let’s let the chips fall where they may, and I truly hope they don’t land on you. It is one of the perks of being an author, this “calling out” of my industry.
Every teacher has pet projects or subjects they believe are part of their soul. Real estate is part of mine. The subject of value and price has always sparked my interest; in fact it’s been one of my pet projects and is my main reason for writing this book. There is a giant void in information, training, publications, and books offered to buyers, sellers, or agents on the subject of how to value and price real estate in the active market—that is, before the appraiser gets involved. Indeed, confidence in valuing and pricing real estate is probably the most valuable asset you could possess. Prepare yourself to become an expert on this subject. Maybe it will become your pet also.
After reading this book, if you are a seller, you should be able to decide what price to ask to be competitive in today’s market in your own neighborhood. You will be able to decide on what improvements to make to maximize your return, answer your own questions like “how long will it take to sell,” and to do these things better than anyone else in your area. Wouldn’t that be nice?
If you are a buyer, you will be able to decide with confidence which property best meets your needs, without paying more than the current competitive market value, and without relying on the opinion of anyone else. That should be refreshing and rewarding.
If you are a real estate professional, having a client who possesses the knowledge and tools offered in this book will be a delight and relieve you of the burden of educating or convincing them. If not, you will be able to deliver your message in a more understandable, believable, and persuasive manner. The final decision on price, whether a buyer or seller, is the client’s decision alone. The more they know, the easier it will be for you.
The real estate market is competitive, like most other markets except for the product, but it is dominated to some extent by historical methods that are, simply, illogical nonsense. Sorting out and identifying the sense from the nonsense will give you a better vision of reality and add to your power of information.
I challenge you to push the envelope and think outside the box. My preaching’s are likely to be a radical departure from what you have heard, been taught, or led to believe. The real goal here is to provide you with a fresh outlook and a new basis for forming your own opinions. There is no better feeling than believing in and applying your own abilities.
After working directly with thousands of buyers, sellers, and real estate agents, I believe most of them fall into two distinct groups: either they know everything and cannot be told anything, or they know nothing and cannot be told anything. Which group do you fall into? Of course, there are some that fall in between. Hopefully you are in that group. Whether you agree or disagree with my point of view, I challenge you to retest your own beliefs. It will be a win-win scenario for you.
The choice of pronouns used—for example, he, she, it, them, salesmen, and so forth—are not intended to imply any gender beliefs in the context used. They just came from the keyboard at that moment and should balance out.
Hopefully, you will find some of the stories and events amusing and revealing, but each was chosen because it made an indelible impression on me, and became the catalyst for some hardcore logic and solutions to nagging problems.
If you are not currently involved in or considering a real estate transaction, you can use the information and system found within this book to satisfy your “what if” curiosity and maybe even save it or remember it for the future. It will not get shelf worn. You might even enjoy the humor and tales from my files. So find a chair, relax, and read on.
 

Introduction

Real estate is critical to almost everyone’s life and survival. You are in the game whether you realize it or not. It doesn’t matter how old you are, what you do, or where you live, but if you want to know how the real estate market really works, this is as close as you will ever get. This book was written especially for you!

To be truly candid and unbiased in the vast expanse of real estate requires one to be relieved of any special interest group’s influence. I have worn many shoes in my day—from the Italian leather shoes of an investment counselor, corporate manager, public speaker, software designer, taxman, teacher, and seminar provider to the patent leather shoes of a dance-band saxophonist to the brown cowhide shoes of a real estate seller and buyer. But the most profound pair of shoes I have ever worn has been as a Realtor®, scrapping for listings, convincing buyers to make their offer, or battling with an appraiser or mortgage lender.

You should be able to relate firsthand to some of my tales from my experiences. Any of these gems might keep you from making a wrong move. One of my wrong moves was almost my last, as you will understand later. The stories are all true except for the names. Of course they are embellished with a guttural reporting of the facts, embellished with a serving of my dry sense of humor, and spiced with a bit of sarcasm, but they all will make a powerful point.

When I tell my friends and associates “I have finally graduated from real estate,” they laugh because it is a 24/7/365 burnout, fry-your-brain job trying to be the Great-Deal Facilitator. Real estate just goes and goes and goes, but I am at a point now where I can step back, reflect on the past, and speak from the heart. To anyone who listens, I will challenge you all—especially those who have a lot of “experience.” I will challenge you to confirm your beliefs, or to throw them out with the bath water. In either case it’s a win-win scenario for you.

To the public, to you, thank you for buying this book. Welcome to the power of information—no experience required. Oh, except for one thing you must remember: OPEN MINDS OPEN DOORS.

—Kerry D. Bodily, Graduate

Chapter 7

How Price and Value Really Works 

Price

            The term price has many different meanings depending on the type of market, the product being sold, the location, and sometimes even the dictionary you’re reading. For example, prices at the grocery store or gas pump, are not negotiable. If you want to buy the product you pay the posted price. At a garage sale, for instance, the prices are usually quite negotiable. At the end of the day they become even more negotiable, because if they don’t sell the seller must keep them, which was not their reason for having the sale in the first place. A car parked in a vacant lot with a For Sale By Owner sign may have a posted price, but is often followed by the acronym “OBO,” which means or best offer. Obviously, the price is negotiable, and is really more of a benchmark than a firm price.The word price in real estate has several completely different meanings. Each must be defined exactly to place it in its proper perspective. Read on. 

Asking or Listing Price

            The asking or list price of a house or other parcel of real estate is the advertised price; in other words, the dollar amount you would see in an advertisement, flyer, or on the Internet sites that advertise real estate. The asking price, a decision of the seller, is the price that would presumably be accepted without further negotiation, providing the terms and any other variables, such as inspection or loan approval contingencies, were also acceptable. The price can be changed at any time, higher or lower, to match competitive market conditions. 

Offer and Counter Offer Price 

            If a buyer wants to purchase a property, they will make an offer to the seller, which includes many conditions including the price the buyer is willing to pay. The price the buyer is offering to pay the seller is referred to as the offer price. It may be higher, equal to, or lower than the asking price. The seller can accept, reject, or make an alternative offer to the buyer. An alternative offer made by the seller to the buyer is called a (seller’s) counter offer. The buyer can accept, reject, or make another offer, which is called a (buyer’s) counter offer. This counter-offer scenario can continue back and forth until an agreement is reached. In a very competitive market, several buyers may be trying to buy a property at the same time. Sometimes the process becomes a bidding situation with the offer prices getting higher and higher, and multiple buyers will sometimes offer much more than the asking price. This scenario also indicates the asking price was too low in the beginning, though some believe this pricing strategy brings a higher ultimate selling price. 

Gross and Net Sales Price and Concessions 

            The gross sales price is the final negotiated price agreed on by both parties, say $200,000, for example. Sometimes the agreement may include certain concessions given to the buyer by the seller. For example, the seller might agree to pay $5,000 toward the buyer’s closing and escrow costs. This would change total value received by the buyer and the net proceeds received by the seller, and would have the same effect as a reduction in the price. The gross sales price ($200,000) less (monetary) concessions ($5,000) is called the net sales price ($195,000). The net sales price more accurately reflects the true essence of the transaction. For purposes of this book, the word price will always mean net sales price,” if not otherwise defined. 

Price-Value Range Marketing Strategy 

            In real estate, price is usually expressed as a specific dollar amount; that is, $200,000. Historically, however, the price has been advertised as a range rather than a specific dollar amount. For example, the price would be expressed as “$175,000–$225,000.” The terms used to describe a range versus an absolute price vary, but they are typically called price-range or price-value range marketing. The point is to invite the buyer to offer any price in the range in order to get the negotiations started.As you can see, in real estate, the word price, can take on many different meanings. It is necessary to further define the word price, so that everyone will be on the same page in a discussion, presentation, or more importantly, negotiations. 

Value, Intrinsic Worth, and Utility 

            Webster defines the word value as “The desirability or worth of a thing; intrinsic (inherent, real, true) worth; utility. In real estate, the seller’s goal is to get the highest price possible. By contrast, the buyer’s goal is to receive the highest value for the price paid. We often use the word value in phrases such as, “It’s a good value for the money.” But what does that mean? The value of a product is perceived when a buyer compares the product’s (for example, houses) intrinsic worth or utility value to the actual price paid.       

            For example, if a gallon of water on the shelf at the local supermarket was priced at $.99, it might be purchased by someone who valued it for its purity. This person would not be desperate, and would have other easy alternatives, such as installing a water purifier on their faucet at home. The value of the water to this buyer would be $.99 and would not be considered a bargain at a higher price. However, if you were lost in the desert and delusional from lack of water, the intrinsic worth or utility value of water would increase considerably. If you stumbled on a nice little oasis, and saw a gallon of cool, purified water in a cooler, the intrinsic worth or utility value of water, let alone its purity and coolness, would increase substantially to equal almost any price the seller asked. 

Limiting the Intrinsic or Utility Value 

Value can be expressed as an absolute number by anyone who can decide exactly what the intrinsic worth or utility value is to them. For example, I like Bing cherries better than any other fruit. I picked them as a child for two cents per pound, and back then they sold for fifteen cents in the local market. Nowadays, even in this area where there are thousands of acres of cherries, they sell for $1.50 per pound in season. In the off season, the cost raises to $2.99 per pound, and I will pay this amount, because I love the taste of big, juicy Bing cherries. But I draw the line when the price raises any higher than that, because that price is too high for me. The intrinsic worth, thus the value to me, stops at $2.99 per pound. Call me old-fashioned, or cheap if you like, but that is my absolute utility value for Bing cherries.

In real estate, the utility value of many so-called improvements made by sellers, such as swimming pools, may have little or no intrinsic value to a buyer. A pool can be a hazard to small children, and in some areas the season just isn’t long enough to justify having your own pool. A better alternative would be to belong to the local family sports club, which has a nice pool and is open all year. Understanding the intrinsic or utility value will be helpful later when we discuss how to weigh these factors in real estate applications. 

Price Is Understood, Value Is Not 

After spending many years in the real estate industry and working with buyers, sellers, real estate agents, appraisers, mortgage lenders, and bankers, I have noticed that we all talk about the price and value of real estate, whether we are speaking about residential, apartment, land, commercial, recreational, or farm and ranch properties. Price is commonly understood by all, but value seems to be invisible, indefinable, and non-measurable to most. It tends to surface as a feeling that an individual might express about a specific property: “This Property sure fits my needs. It seems to me like a great value for the money.” Another individual might feel quite differently: “I would need to build more storage. The value isn’t there for me.” Value is a perception based on the intrinsic worth or utility value perceived by the individual. Two individuals looking at the same property may perceive the value to them from opposite sides of the coin. 

The Notion of Competitive Market Value 

The value of a property is determined by its competition—for example, the buyer’s alternatives. Competitive market value is a term I use to describe the value or worth of a property compared to its competition. It can be stated as follows: “The Smiths’ property is priced at $200,000. The value of the Jones’ property, by comparison, is $195,000.” The value of the Jones’ property is $5,000 less than the Smiths’ property. Maybe the Smiths have a better yard, more bedrooms, or a better location. The competitive market value, whether you use the term or not, is simply what one property is worth compared to a competing property. Value—for this book—means competitive market value, unless otherwise stated.

            If you knew the competitive market value of a property—that is, its value versus its competitors—you would know instantly whether the property was overpriced, under priced, or priced at its competitive market value. As a buyer, you would also know exactly what to offer in order to get the most value for the price. As a seller, you would know where to set the asking price in order to be competitive, and you would offer an equal value for the price in comparison to your competition. 

Fair Market Value 

Fair market value is a term commonly used in real estate to describe the final negotiated price to which a prudent and knowledgeable buyer or seller would agree, in an arms-length transaction void of any outside persuasions with conflicting motives. The term fair implies fairness to all parties and means that the product is neither overpriced nor under priced but priced at fair market value. The term fair market value is almost synonymous with competitive market value—the term I use to describe value—except that competitive market value implies the value is derived by a comparison to competition. I make this important distinction because many opinions of value offered by real estate professionals are not derived by methods to determine either fair or competitive market value. 

Appraisal Value 

Appraisal value is an appraiser’s opinion of value. The approach may differ depending on the purpose of the appraisal. The request could be for an estate settlement, a divorce settlement, the sale of a property, the refinancing of a mortgage, or an opinion of market value. For real estate sales, which is our focus here, the appraisal is normally ordered by the buyer’s mortgage company to satisfy them that the loan amount and appraisal value are consistent with the final negotiated price between the buyer and seller.

The appraisal process usually involves comparing a subject property with three comparable properties that are similar in style, square feet, bedrooms, baths, and so forth in the same vicinity or neighborhood that have recently sold. This process produces a different result than comparing properties that are in the buyer’s shopping area, currently available for sale, and in active competition with each other, which is our primary focus. As stated earlier, buyers cannot purchase properties that are sold, and they are shopping competitively. My point here is appraisal value and competitive market value are two totally different things, are used for different purposes, use different approaches, and solve different problems. 

Perception of Value 

At a seminar many years ago, a representative of the Hobbs/Herder advertising company made a statement that has stuck with me for many years: “In advertising, perception is everything, reality is nothing.” I did not understand what this meant for a while, but one day it started sinking in. Since that day, it has often provided answers to certain behaviors in real estate where a logical answer was not apparent before. What people feel and perceive is what matters and is the basis of many decisions, especially in real estate, and sometimes it is diametrically opposed to reality.

            The following are three personal examples we’ve experienced in viewing properties. First, warm colors such as yellow and orange give the perception of warmth, but are really no “warmer” than cool colors. Second, if the basement light is burned out and it is dark down there, potential buyers do not want to go down the stairs. After viewing all the day’s houses, buyers will remember that home as the one with the “dark dungeon.” In reality, the basement could have been the work of a real craftsman, but they’ll never know. And finally, Judy and I had a great listing, priced competitively, to be the next sale for an anxious seller who had been transferred and was leaving town. Unfortunately, a storm the night before had knocked down the gutter on the front of the two-story house. The owner could not get it repaired for another day, even though we had an open house and newspaper and radio ads. An expenditure of $100 for a new rain gutter and a little work could change the street appeal to be much more inviting, but the perception of a home with a fallen gutter is that the interior is probably in the same condition. An agent with an appointment called back and said their client did not want to go inside and drove away, even though our colorful flyer mentioned the great interior. My point is that perception often rules over reality. Sometimes, perception is everything and reality is nothing. It’s not how it really is, it’s how you think it is, especially in real estate. 

How Much Is a Property Really Worth? 

            The number one question that is asked in real estate circles concerns how much property is really worth. Here are five short answers to this question: 

1. No property is worth more than what a buyer is willing to pay!

2. No property is worth more than its competition!

3. The property’s value is established by market conditions such as supply and demand and not by sellers or agents!

4. A property will typically not sell for more than the value received for the price paid! The value must equal or exceed the price. Value can often be raised by low-cost improvements, which can change the perception of value!

5. Factors that have little or no relation to value include: the seller’s need for money, the cost of improvements made for the seller’s enjoyment which may not be as valuable to a buyer, and the replacement of maintenance items such as a roof, furnace, or water heater, which are expected to be working anyway!

The Balance of Price and Value 

If the price exceeds the value, the product is perceived to be overpriced. This is the best deal for a seller, but the buyer is receiving less value for the price paid. The following image demonstrates overpricing:

 

If the value is greater than the price, the product is perceived to be under priced. This is the best deal for the buyer, because the seller is giving more value than the price received. The following image demonstrates under pricing:

The challenge then is to measure the value and match the price. If the price equals the value, it is perceived to be the scenario that best satisfies all parties, with no one having an advantage over the other. In addition, if the value is defined as the competitive market value—that is, the best value versus all other competitors in the buyer’s shopping area—then it also represents the best deal for both the buyer and the seller that each of them expect in today’s market.

The following image demonstrates price being equal to value:

Any experienced real estate agent will tell you that buyers get a quick feeling for comparable values as soon as they see the second property. If they are shown five properties, they will have a very strong feeling or perception of the relationship between price and value for all of them. If you ask which property they believe is the best deal, you will usually get a quick answer.

To further illustrate the relationship and effect of price and value, let’s compare new construction, because there are fewer variables to consider. Envision two new ramblers (one-story, above-ground homes) in the same subdivision, one on Baker Drive and one on Pearce Lane, built by the same builder, and similar in every way except square footage. Even though each one has three bedrooms, two full baths, and a 2-car garage, the Baker Drive home has 2,000 square feet while the Pearce Lane home has 2,100 square feet. Assume there are no other significant differences, except for the difference of 100 square feet.

The Baker Drive home is priced at $200,000. The Pearce Lane home is priced at $210,000. The Smith family, with two children and one car, want to look at both properties. They decide on the Pearce Lane home since it is the larger rambler, and would better accommodate one of their large pieces of furniture. In addition, they also feel the value overall is worth the additional price of $10,000. Both properties are perceived by the Smith’s as being priced equitable where the value of each home is equal to its respective price.

Now let’s change the scenario. Assume that the Pearce Lane property is priced at $220,000, instead of $210,000. When the Smith family heads over to the Pearce Lane property, after leaving the Baker Drive property, they immediately notice the price difference. They are anxious to see what they will get for an additional $20,000—maybe a pool, a deck, a fireplace, or a den. It would need to be something worth $20,000. When they arrive and walk in, the rooms appear slightly larger, but that’s it! There is no pool, no deck, no fireplace, and no den. There is nothing that appears to be worth an additional $20,000, although the rooms seem a little larger. The Smith family feels, without performing any math, that the Baker Drive property is a better deal than the one on Pearce Lane. Either the wife or husband may suggest, “Let’s buy the Baker Drive home, and spend the other $20,000 on a new family car. That will give us a lot more value for the price we pay.”

The Pearce Lane property in this example is priced, in reality, 10 percent higher, but the size difference is only 5 percent. Simple math shows that the Pearce Lane home is obviously overpriced by $10,000, versus its competitor Baker Drive.

If these statistics seem cumbersome at this time, don’t fret. When we get to the next subject, measuring differences, a simple table will make the math easier. The Smith family made their decision based on feelings without a pencil or calculator, which is, as we know, a very common practice.

In older, existing homes there are more differences affecting value that have to be taken into consideration than in new construction—for example, the affects of time continually add differences such as neighborhood development, landscaping or lack thereof, the interior quality and condition of both the home and its closest neighbors, overall appearance, and pride of ownership to name a few. Each of these factors adds its own separate affect, but the relationship of price and value still applies, and they can each be measured individually. 

The Mental Balancing Act 

The feelings and perceptions of sellers and buyers are prime factors in the decision-making process. Sometimes, no one knows exactly why a decision is made, and this is especially prevalent in real estate. Many decisions that are made on feelings and perceptions alone would have been easier by adding a little objective data. The Smiths would not need to look at any more comparable properties priced above $100 per square foot, unless the property also offered additional added values. That could save the Smiths and their agent a lot of time and wasted effort. With a little objective help, maybe the Smiths would make their decision before the interest rates could increase and potentially wipe out their purchasing power. Old-timers back in the 1980s still remember when the mortgage interest rate jumped 2 percent in two days and ultimately climbed to about 20 percent! The economy that affects interest rates could change in seconds with the happening of an event. 

Pricing Strategies 

Knowing the value of a property and deciding on the actual asking price can be two different things depending on a seller’s motivation to sell. If a seller must sell immediately because of a job transfer, she might choose to price at a level where the value exceeds the price—or in other words, knowingly under price it. A prudent buyer would consider this a great deal and the seller’s property would be more likely to sell quickly. Pricing competitively would be the normal strategy for a seller and would result in the highest price for the value offered, while overpricing would essentially position the property outside of the active, real market. Market changes such as the sales of new or existing competitors could change the seller’s motivation and corresponding pricing strategy. The normal strategy would be to price competitively, keep a close watch on market changes, and adjust as needed to satisfy the seller’s needs. 

Raising the Value: An Option to Lowering the Price 

When the buyers thin out and the inventory is still high, especially when new construction has been running strong, lowering the price is not a very good option for some. For example, a builder must commit far in advance to building new homes by purchasing the land, obtaining construction loans, hiring subcontractors, and applying for building permits. The builders operate on several levels simultaneously; from grading an area to preparing the foundations of their next phase to being midway through construction on several homes to having finished homes currently for sale. When the market cools—when supply is greater than the demand—it becomes a critical situation. An individual homeowner can immediately lower their price until the property sells, but builders have a problem when lowering the price. Customers who have already purchased homes, by viewing the models or choosing from blueprint designs, or have actually moved in, become very unhappy if an identical home is now offered at a lower price because it hurts their resale value. As an alternative to lowering the price, builders typically offer added values to these individual homes, such as free upgrades, like granite counter tops, two-tone paint, tile instead of linoleum floor coverings, outdoor decks, or other incentives, such as all-inclusive vacation packages and season tickets to sporting or cultural events.

Another common practice in all markets that sellers use to raise the value of a home without lowering the price is to offer monetary incentives such as buying-down the interest rate or paying the closing costs for the buyer. For example, a seller might offer to make up a full point, or one percent, on their buyer’s mortgage rate. The point is that overpriced properties do not sell, and if lowering the price is not an option then raising the value is often a good alternative. 

Measuring Value Is an Elusive Obstacle to Pricing Real Estate 

Measuring and quantifying value has been an elusive obstacle in the path of being able to compare one property with another similar property, and to determine its relative intrinsic worth or utility value. The problem is measuring the subjective factors such as location, street appeal, view, condition, and quality. For example, if two properties were identical except that one was located in a cul-de-sac and the other was located on the corner of a busy street, then you would need to measure the value of their relative location in order to price each one equitably. But this doesn’t happen! So, wouldn’t it be nice to have a method to evaluate and measure subjective differences like location with a higher degree of confidence?

It is because of that exact question that I have designed a simple system to measure subjective factors, such as location, based on your own feelings. I have been testing, teaching, preaching, and utilizing this system for the past decade. It is also being used by thousands of real estate agents and is one of their best kept secrets. After all, they believe it gives them a competitive advantage, so why tell anyone else? The solution to the quandary of pricing real estate competitively with a complete system of evaluating and quantifying differences between properties will be presented throughout the remainder of this book. If you could compare two or more properties and determine the value of each versus the price of each, with confidence, you would possess a great power in one of the most important and least understood topics in all of real estate. The bottom line is your own personal thoughts and opinions, not that of an appraiser, a real estate agent, the county assessor, or anyone else. If you understand the system and can use it to form your personal opinions, it will be worth a lot to you—emotionally and monetarily. 

What to Expect Next 

The real key and the catalyst that helped me create this system was an accidental discovery of a commonly used method to measure subjective feelings. This was truly accidental as you will see.

The next hurdle was to create a method to use this discovery for real estate applications. It needed to be logical, simple, and believable to me at the very least. My plan at the time wasn’t to publish or promote it to anyone else. My motivation was very strong because a system to measure and quantify objective data such as square footage, the number of bedrooms and baths, and the size of the garage and lot was available. The missing link was a system to measure and quantify the affect of subjective factors, such as location, street appeal, condition, quality, view, security, seclusion, proximity to shopping, and nearby schools.

Without the ability to analyze the whole picture, the end result in most real estate discussions is that the parties involved find themselves looking at a bunch of nicely colored paper that has been carefully prepared and flopped on the table. From this paper, a range of wild theories and opinions would explode without any real or definitive analysis. For example someone might say, “It looks like your property is worth somewhere between $175,000 and $225,000.” If given this range to choose from, what do you think a typical seller would lean towards? They would typically choose the higher amount, of course. Wouldn’t you? This common and understandable procedure is where the loathsome and expensive price reductions and expired listings originate. It is similar to a restaurant menu with no prices. The restaurant just charges whatever they feel it is worth, somewhere between $50 and $200. As the restaurant owner, what would you choose?