If I had a buck for every time a prospective seller told me what they "needed to get" for their house, as if it were a value carved in stone, I could takes us out to dinner.

Now, I know that sounds harsh so let me say: I want you to get what you need out of your house. I want you to get what you need with a cherry on top. It's an investment into which you've poured your sweat, love, and wallet over the years. And, after all, you're paying me a percentage of the sales price when I sell it for you; the more money you make, the more money I make. I want you to get what you need and be happy because then you'll tell all your friends what a great real estate broker I am, and they'll list their houses with me, too. While lowering your listing price may bring a buyer faster, if I think we can legitimately get more for it, by all means let's give it a go!

The truth is, sellers often take into consideration things such as how much it will cost to pay off their other debts, what the new car they want costs, how much the kids' college tuition will be next year…and they base their sales price on these things – the things they "need." I've actually sat with customers who have gone over lists of items such as these, while telling me at what price they wanted to list their house.

I understand needs, but in no way does what I need to get out of the sale of my house affect its value.

In fact, what I paid for the house, and how much money I have invested in it, also do not necessarily have anything whatsoever to do with what it is worth on an open market.

Let's say you bought a house which, if it were in average repair, you knew for a certainty was worth every penny of $60,000. You got a steal on it and only had to pay $45,000 for it. But after you moved in, you discovered it needed $15,000 dollars worth of repair work…maybe the plumbing and electric needed to be updated and the roof was leaking in the spare bedroom. Once you facilitate those repairs, your house is not now worth $75,000 just because you put 15 grand into what should have been a $60,000 house to begin with. It's still only worth $60,000 because all you did was bring it up to the condition it should have been in the first place. You may need to get $75,000 out of it but you won't.

Sentimental value is another factor which sellers often earnestly, and understandably, take into consideration when stating what they believe they should get for their home. Maybe they were born and raised there and are forced to sell a family home they truly love. Maybe their great-granddad is a local legend and built the place with his bare hands. But unless you own Abe Lincoln's old place, or the buyer – and more importantly the bank's appraiser – share your sentimentality, your sentimental attachment means nothing when pricing your house.

Likewise, the cost of some upgrades, which sellers sometimes think they should be able to recoup, are actually detriments in the mind of a buyer. At best, they may be only marginal increases in property value on a bank's appraisal. Down South, a biggie is swimming pools. Me, I would love a house with a pool. But a lot of buyers don't. Upkeep, electric to keep it heated, water to replace evaporation, cost of chemicals, possibly increased insurance premiums, saftey concerns if they have kids…to them, it's a deterrent to purchasing the home at all. There was a lovely Mediterranean-style home in my old neighborhood in Florida that had a fabulous screened patio, surrounded by gorgeous tropical plants, with a magnificent in-ground swimming pool in the midst of it all. I showed the house a couple of times and it was absolutely stunning. When it finally sold, the first thing the buyer did was fill the pool with dirt and throw down sod where an oasis used to be. To an indifferent appraiser, a swimming pool which cost you $35,000 to install may only raise the value of the house $10,000.00, if that. Or maybe you spent a fortune renovating the basement into that bar and game room you always wanted. To many families it would be a deterrent to the sale, and it means very little on an appraisal. You may have spent $15,000 on it, but it's not going to make a $60,000 house worth $75,000, and it may actually slow down the sale.

Another death knell for accurate pricing is Zillow, and similar online sell-it-yourself sites. "But Zillow says my house is worth $100,000, and you say it's only worth $70,000!"

Again, if I only had a buck…..

There's no argument, Zillow is a wonderful tool for a sell-it-yourself homeowner. They have a lot of information, some of which is accurate, a lot of tools and calculators, free basic listings, and – without question – a truly remarkable marketing campaign which leads one to believe Zillow is the ultimate, end-all authority on selling a home. They manage to make their "Zesimates" seem authoritatively iron clad. Unfortunately, they are not infrequently substantially off-base, at both ends of the spectrum. As an example, back in my old Florida neighborhood….

I lived on NE 5th Street in a neighborhood called "The Duckpond." The oldest, and original, neighborhood in Gainesville, Florida, the Duckpond is on the National Historical Register, as are many of the surrounding edifices. Even my humble home was categorized as "historically contributing." It's a lovely, old, architecturally eclectic neighborhood with lighted tree-lined sidewalks, and clean streets, convenient to parks, shopping, world-class medical facilities, museums, fabulous restaurants, and the artistic nightlife of downtown Gainesville, much sought out by professional people and professors at the nearby University of Florida.

The Duckpond starts at Main Street in downtown Gainesville and runs east about nine blocks; and about thirteen blocks running north and south. Ninth Street is the demarcation line; when you cross Ninth Street heading east, leaving the Duckpond, the area immediately begins to plummet in quality, value, and desirability. A few more blocks east and you'll find yourself in an area in which you'd better be carrying a concealed weapon if you're out after dark, and I'm not kidding.

Zillow, bless their little, pea-pickin' hearts, consistently uses houses in the undesirable area several blocks east of the Duckpond as comparables to place a value my home, and others like it, inaccuratelydragging their true worth through the gutter. Likewise, it uses houses within the desirable Duckpond area to place inflated prices on the houses in the filthy easterly neighborhood, driving their "Zestimate value" inaccurately upward. If you live in a large, metropolitan area, with block upon block upon block of cookie-cutter houses or townhomes, then Zillow may very well be giving you a correct assessment of the value of your home. If you don't, then the chances your "Zestimate" is grossly inaccurate are superb. No conscientious real estate professional will ever utilize Zillow's estimate for a true value on your home.

Finally, an incorrect assessment of value often quoted by prospective sellers is not infrequently what the guy up the street is asking for his place. "Well, Joe's askin' $100,000 for his place and mine's nicer than his; mine must be worth at least $125K – I've got a swimming pool!" What someone else is asking for his place in no way determines the value of your home. Joe's place may have been built by his great-great-grandpa, and he may have college tuition due. Heck, Joe may have gotten his price off Zillow! While a real estate professional will give consideration to the listing prices of homes similar to yours, you cannot go by the sticker price on Joe's place to place true value on yours.

Ok, I've told you how not to price a house. So, how do you price one?

There are two main methods professionals use in determining an accurate price for a home. The first is a "Comparative Market Analysis," or CMA, also sometimes known as a "Brokers Price Opinion," or BPO. This report is provided to you by a licensed real estate broker. The second is an appraisal, supplied by a licensed appraiser. The two reports are very similar in nature, with an appraisal being the more thorough of the two, and the only type of report acceptable to the bank making the loan. Appraisals, when properly compiled, are substantially more complex and detailed, require specialized computer programs and forms, and take more experience and attention to detail to prepare accurately than does a CMA. On the other hand, on rare occasions, I have seen appraisals which I know were less accurate than my own CMA.

In both an appraisal and CMA, other properties, "comparables," are used to help establish value. The report should take into consideration such things as the location and condition of the home, with price adjustments based on square footage, number of bedrooms, amenities, fluctuations in the market, age, and surrounding area and properties.

The fair market value, or "listing price", of a home as indicated by a CMA is determined by comparing the Subject property to a variety of comparable homes, taking into consideration the motivation of the seller, and other factors. Brokers utilize sold, pending, and active sales (usually a mix), comparing them to your home – the Subject property – to determine a listing price range. The most weight should always be given to similar homes which have sold in recent months, as opposed to those which are currently for sale. The value determined by a CMA is only a listing price estimate, not an actual appraisal of the value of the property. Essentially, if compiled carefully, a CMA is an accurate ballpark of what an average buyer would likely be willing to pay for your house in a reasonable length of time.

When brokers set a listing price with a CMA, we expect the ultimate sales contract price to be less, and we have room for "artistic interpretation." An appraisal allows for no such creativity and simply provides a report of what the appraiser believes the property to be worth based on cold, hard facts. Appraisers do not utilize active or pending listings as comparables; they are limited strictly to the use of sold properties, within a limited span of time (usually 6 months to a year), and specific geographical area proximate to the Subject, to determine value. In rural areas, or down markets, where comparables can be few and far between, an appraiser's job can be very difficult, and an appraisal inaccurate, despite an appraiser's best efforts. Regardless, the appraisal has a binding effect on whether or not a bank will make the loan and it can be difficult and time consuming to go through a dispute process if you disagree with the findings.

In both a CMA and an appraisal, the comparable property information must be verified and closely scrutinized. Accurate sale and listing information is hard to come by if you don't have access to either excellent online public records (which do not exist in much of West Virginia) or the MLS database archives, which only real estate professionals have. If you don't have either of these upon which to rely you're stuck with Zillow's opinion, what you need to get, and what Joe wants for his place, unless you truckle down to the courthouse and undertaking the nearly impossible task of sifting through sales records. It may sound like a commercial but, in many cases, you need a conscientious professional to help you determine what your home is worth. If you wish to sell your home without the assistance of a Realtor, I appreciate and respect that. But I also strongly suggest you plunk down the $500 it will cost for a good appraisal. Alternatively, some Brokers, such as myself, will provide a thorough CMA for a fee of $250 or so, often refundable if you later list the property with them. You may very well be saving yourself a lot of aggravation and heartache up the road.

The next seller argument, after a Broker has provided them with hard proof their house is not worth what they need to get out of it, and no bank will ever make a loan in that amount because it won't appraise that high, is, "Well, we'll just find a cash buyer!"

OK, I'll admit, the chances of finding a cash buyer are slightly better than those of finding the Holy Grail. But let's be realistic. The majority of home purchases are made with loans from a bank, and a bank will not loan more money than a house is worth, based upon the appraisal. On very rare occasions, a buyer who is absolutely in love with a house might possibly be willing to pay the difference between what the appraisal says your house is worth, and what you need to get out of it. But I have never actually seen it happen, or heard of a first-hand case in which it did. Rather, what happens is the buyer begins to second-guess their decision to purchase the home, and the seller has to renegotiate the sale price at the last minute in order to keep the sale from falling through. This I have seen on multiple occasions. It pays to have your property priced correctly from the beginning, both so that it will sell in a timely manner, and to avoid problems when the appraisal comes in.

So what about the elusive cash buyer? There are certainly a few of them. But sellers sometimes make the mistake of thinking they are somehow more intelligent than the buyer, whom they hope will pay the price they need, whether justified by an appraisal or not. But that simply is not the case. Someone who has the wherewithal to pay cash for your $200,000.00 house is no dummy. With few exceptions, they are not going to pay more for a house than they know it to be worth, and they're going to do their homework before they whip out their wallet.

With today's technology it's easy to slap together a CMA in a matter of minutes, and ballpark a listing price which may or may not be accurate. I've seen some CMA's which were utter rubbish foisted on unsuspecting homeowners who, understandably, took them as gospel. Most Realtors, though, truly are conscientious and attempt to be as accurate as possible.

Like any good broker, I will never harm one party for the good of the other. When I compile a CMA, I spend a great deal of time researching and adjusting my comparables to your home, looking at maps, tracking sales, driving the neighborhood, and providing clear reasons to support my opinion of your price. It matters to me whether the buyer is paying a fair price. And it matters to me that you get the best return possible on your home.