I had an interesting discussion with a loan broker tonight regarding the statistical home sales data out there. RMLS does an adequate job of collecting data, but a poor job of reporting that data accurately. This is where factual vs. actual comes in. Anyone who has played with data for more than 15 minutes knows that it can often be manipulated to appear to support certain theories and conclusions.

Often the same data set can be spun in opposite directions, depending on what the user needs out of it. In the case of RMLS, I think they take too broad a stroke by only breaking down by large areas, and not by price segments in smaller areas. They then tout continued appreciation, which then filters into the media. Instead, if they were looking more closely, they would see more detailed trends that may or may not raise the red flags sooner; soon enough for more folks to make better decisions regarding their housing situations.

So often I talk with other realtors about sales data, market analysis, and general market conditions. There are the hopelessly optimistic who take the sales data as reported by RMLS at face value and wave the appreciation flag valiantly. In the other corner are the direly pessimistic ones whose world is crashing down around them, and use the data to scare instead of educate their clients. Then there are the angry ones, who hate to see good times go, who pour over and over data looking for that glimmer of hope that the market is returning to a boom phase again. The optimist and the angered one are using sales data to overprice homes; while the pessimist is crying Apocalypse and discouraging rather than stimulating their clients.

The short of it is that most real estate transactions are instigated by some other life event. People are not going to stop having babies, getting married, getting divorced, transferring jobs, or getting older and even dying. Every homeowner will have to buy and/or sell at some point, for some reason most probably out of their control. Folks going through trying, emotional times need honesty, education, and sincerity from their realtor. This is where using the sales data to determine actual sales price becomes so crucial. We are in a correction phase, which will include some depreciation. This is not news; it’s happened in cycles since the beginning of homeownership.

So instead of taking the RMLS monthly report at face value, or using outdated comps to seemingly placate their clients, realtors have an obligation to study the data, study their local niche markets, and do it often. You can’t just slap a price on a house and sit on it. The market is a living being, that changes each and every day. You must give homeowners the most accurate, not just factual, information to base their decisions on. The actual selling price of a home may be very different from the factual averages. Determine what will set that home apart, and account for it one way or the other in pricing.

Incorrect pricing only brings frustration to an already bleak situation, undermines the client relationship, and complicates what is already an emotionally charge life event. Study the facts to determine realistic pricing, to report an a more accurate scenario.

Opinions expressed in this article are the opinions of author, and not to necessarily the opinions of Meadows Group Inc.
All rights reserved on all original content, non-original content is given credit | Michelle Berry | 2009