For as long as I can remember, the real estate industry has literally “bet the house” on appraisals, CMA’s, comps, Broker Price Opinions, AVM’s or other types of valuation processes. In other words, every “market value estimate” report mentioned above relies almost solely on sales comparables. It is a huge mistake to do that in today’s market and it could cost you tens of thousands of dollars if it is all you rely on in your locale.

There are ways to attain important additional information which we will touch on in a moment, but in this market you need to think-outside-the-box. Real estate and mortgage fraud have reared their ugly heads in recent years and now we are all faced with a down turn in the market. Some markets are worse off than others and that makes additional research all the more critical.

Other factors contributing to the value equation analysis include foreclosures, flipping activity, property history and site influencing factors. Such factors include proximity to gold courses, park, bodies of water and on the negative side, freeways, cemeteries and railroad tracks to name a few. These factors affect the long-term value of properties and so as a buyer you need to pay attention to them. As a seller, you need to be sure to price your home correctly or it just won’t move in this market.

Sales data is important but to bet the house on that information alone is to take a bigger risk than you should. Do some additional research and understand what the risks may be in the area that interests you. As a buyer, this information is essential, As a real estate agent, it will help you manage seller expectations and assist in the listing price analysis.