Think you know what it's worth? Think again

Here's one of those glass-half-empty/glass-half-full bits of news: Recently online company surveyed real estate agents and concluded that 51 percent of U.S. home sellers are getting 95 to 100 percent of their asking prices.

You can look at that glass as half-full because, well, about half of the sellers seem to be hitting their target.

But then there's the rest of America, where weeds are popping up around the for-sale signs.

During the housing boom, selling your home for 95 percent (or better) of your asking price became something of an icon--a reliable, reasonable goal. But as the market has cooled, "asking price" has become a moving target.

How much is a fair price, anyway? A response from the glass-half-empty camp might sound like the late cartoonist Jeff MacNelly's parody of how the Internal Revenue Service determines how much tax you owe: How much did you make? Send it in.

That is, no matter how certain you are that your home is worth a specific figure, there's a good chance that in today's climate, it will turn out to be less.

"The old, easy model [for pricing a house] is to look at the computer to see what sold last year and add 5 percent," said Stephen Baird, president of Baird & Warner Real Estate in Chicago. "That model doesn't work now."

Baird said that coming up with a figure has become less an exercise in math than an exercise in group-think for agents.

"We get the office together and price the property," he said. "It's much more of an art than it was a year ago."

Brokers, agents and people trying to sell their homes on their own have told me that starting out with the right asking price is akin to being told to shut up and eat your spinach. And we all know how palatable spinach has become.

"You have to look at what is actually selling in your price range right now," Baird said. "That determines the market.

"The period of time you look back at now [for sales prices of comparable properties, or comps] is three months. Anything over three months is not a good comp now."

Even someone as economics-impaired as I can grasp this concept: Your home (or your car or your collection of Mark Foley campaign posters) is worth only as much as someone will pay you for it. Today.

Or, as Baird put it, "The market is going to tell you what a house is worth. You just may not like what the market says.

"If you want to sell your house against the 20 other properties that are like it, you have to get aggressive on your price," Baird said. "Out of that 20, somebody will step out from the pack and price it more aggressively, and it will sell."

Lest we end this chat on a negative note, here's a reminder of the cyclical nature of real estate. If you're a seller and you have the luxury of time, conditions are likely to improve.

"People are sitting on the sidelines waiting to see what happens with pricing," Baird said. "The nice part about this business is that demand doesn't go away, it just gets put off. If somebody isn't going to get what they want, they're going to wait until next year."

It's always worked for the Cubs, right?


Here's a vivid reminder that communities that have tree-preservation ordinances probably mean what they say: A Silver Spring, Md., man recently was fined $62,000 plus the cost of restoring about two acres that he was found guilty of clearing without permits. The restoration costs could amount to $20,000, according to local news reports.

Last year the man bought the land, where he planned to build a house, for $65,000.


Hear Mary Umberger on WBBM Newsradio 780 at 6:21 p.m. and 10:22 p.m. each Thursday and Friday and 7:20 a.m. each Saturday and Sunday. Mary Umberger

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