Real estate agents are known to know their way around people and convince them to buy a house that's priced over its worth - which makes it difficult for home buyers or home sellers to trust agents on their word.
In fact, real estate agents typically employ the use of "bargain," "undervalued" and "deal" to lure people into buying or selling a home. But apparently, these words don't really mean much to almost half of the 100 largest U.S. metros.
This is based on new research from Trulia, which compared the listing prices of homes marketed as good deals to the prices of homes that have a similar size, age and location.
Apparently, good deals in most U.S. metros aren't exactly cheaper. Bloomberg reports:
"In San Francisco, Atlanta, and 43 other metropolitan areas, homes listed as good values weren't any cheaper, on average, than similar homes whose listing didn't promise a deal. In some cities, you may have more luck taking bargain-shilling brokers at their word. Homes advertised as bargains in Dayton, Ohio, were on average, 20 percent cheaper than homes in the same zip code after controlling for the number of bedrooms, bathrooms, square footage, and lot size."
Unfortunately, the Trulia study has some limitations: although it takes into account the average discount among metropolitan areas, it doesn't gauge factors regarding quality - like that of amenities and location within a zip code. This creates the notion of a subjective perspective on "bargain."
However, the study does prove that not everything posted on a home listing isn't true. Apparently, there is an interesting dynamic: markets that have a large inventory of homes up for sale would somehow require sellers to offer discount just to make the homes attractive, especially for those that have some kind of defect.
"In hot markets, sellers don't need to do a lot or make big price adjustments for perceived defects," Trulia economist Ralph McLaughlin explained.
