Pricing Strategy Advisor
October 29, 2018, by Mark Wheeler
I (Mark) recently went through the coursework & exams for the Nation Association of Realtors® (NAR) Pricing Strategy Advisor (PSA) certification. This was an interesting refresher for techniques to use when determining the value of specific properties, whether on behalf of a seller, or a buyer. I did not really learn anything new, but it helped me to know that we are still on top of the best practices & tools used in the housing industry when helping sellers to maximize the return on their investments, and when helping buyers to understand the value of properties they are considering.
In our Portland Oregon real estate market, we rarely work in subdivisions where houses are very similar to one another, so we are almost always dealing with fairly unique properties. In these circumstances, value is definitely in the eye of the beholder, as there is no absolute way to pin point a property’s exact value until the property is actually sold on the open market. So, we use a variety of tools to determine the property’s estimated probable value, & usually our informed estimation winds up being very close to the final market value. Market value is defined as the price paid by a buyer to a seller for a property that has been exposed to the open market (meaning that all potential buyers have the opportunity to buy the property), the parties are not related to each other (arm’s length transaction), both buyer & seller are reasonably informed about the market, & neither buyer nor seller is under duress.
Another part of this topic is how we can best work with appraisers to help them understand the value of the property under consideration. Different appraisers will arrive at different property values; just as buyers, sellers, & their agents may all have differing opinions of value. Our goal when working with appraisers is to ensure they understand why the price that the buyer & seller agreed upon is a reasonable price, and that the lending bank (who is the appraiser’s client) should move forward with the buyer’s mortgage loan.
Please contact us if you have any questions or comments. Thank you for reading.