The Great Real Estate Consumer Rip-Off
Consumers are being cheated by real estate agents every day and no one is trying to stop them. Homes are priced by over anxious brokers who simply want to make a sale. How do they get a listing? They tell the homeowner their house is worth more than it really is. Of course, every market is different, but even in areas with rising home prices, who decides what’s a fair price? How much more is it worth than it was a year ago? And, does any of this sound familiar?
Real estate agents have the power. They are the Great and Powerful OZ – the ones behind the curtain that controls home values all across the country. Brokers tell homeowners how much their home is worth and then expect appraisers to prove the value is fair, calculating prices the fairway – the way the agents should have priced the house from the
One of the first mistakes agents make is how they calculate a listing value. Look at any CMA and you’ll see the all-powerful price-per-square-foot formula.agents looks at a few “comps,” (which many truly no not understand) and come up with an average price-per-square-foot number. They take that number and multiply that by the size of the subject property. here’s where is really goes bad.
How many agents actually measure the house they are listing? Sadly, less than 17% of those we polled said they measured the house. Across vast majority said they took the number from the local tax office and assumed it was accurate.
They are NOT!!! Across the country, the errors we found in square footage numbers we alarming to say the least. The county is not responsible for providing precise square footage details and agents should know this. Too many choose to ignore the facts because it’s easier to use tax records than to have to measure the house. Why should you care? If you have an extra $10,000 to $40,000 then it’s not a big deal. otherwise, those errors cost real people real money, and it happens every day across America.
Whether it’s a cup of coffee, a Coke, or a house, the more you get, the less per unit. 12oz, 16oz, 24oz, the more you buy the less per oz. Houses are generally the same. The larger the square footage, the less per-square-foot. Of course, like most things in the real estate business, there is a bit of “it depends” to every situation. But, for the most part the larger the house the less you pay per-square-foot. So, when you compare homes, always compare “apples to apples.”