There are two sides to every real estate transaction, the selling and the buying.Traditionally, there are a host of reasons why people buy and sell: upgrading, downsizing, investment, death, divorce, relocating, marriage, etc. For many people this is a time of high emotion. It is the realtor’s job during this time to act as a sound consultant to guide people through this transition.On the selling side you can have a willing seller or an unwilling seller. Imagine if you are forced to sell your home due to a divorce, a death of a loved one, or financial difficulties.You would not only be dealing with the loss of your home, but you would be dealing with a complete change in your life.Your emotions could be teeming with anger, frustration, grief, and fear. In comes a real estate agent, now let’s face it, if we don’t wish to do something, resistance will set in.And your agent tells you what she believes is the value of your property in today’s market.Sadly, for many sellers, this is not the price they were hoping to hear.Your realtor’s job is to be frank and honest with you on the state of the real estate market.His or her job is not to promise you an inflated price that will never be obtained in the current market.She should NOT be giving you a “gut feeling” as to what your property is worth on an initial viewing. In order for her to realistic price your property she needs to do some research on what has sold in the past 6 months to one year, what is currently on the market, and how long it is taking property to sell.Often seller’s want instant information; well just like instant coffee is not as good as freshly brewed, neither is pricing of property.Did you know in 2011 there were 345 properties that sold islandwide? It would be impossible for your realtor to recall by memory how much each property sold for and when it closed.Just a few mistakes in her memory could alter your property price completely.If she erroneously quotes a price too high, you will be disappointed when it does not sell at that price; equally if she quotes a price too low she would more than likely lose some credibility with you plus you could lose some much needed cash.The only proper way for a real estate representative to price your property is with a written CMA (Comparative Market Analysis).A CMA will take the following into consideration — location of property, total square footage, amenities, condition of property, neighbours, zoning, lot size, topography of lot, views or waterfront, number of units and possible rental return, what similar properties have sold recently and what similar properties are on the market.A CMA does NOT take into consideration how much you paid for the property, what your outstanding debt is on the property, what you “need” to get out of the property, why you think your property is better than others, features of your property that are only “special to you” such as the life size marble statue of King Kong that you have imported from Italy and is mounted in the centre of the living room.Most properties in Bermuda are unique; no two cottages are exactly the same.Even with condominiums, there can be differences. The idea is to come up with variables that are similar such as the size of the lot, total square footages and similar neighbourhoods.For instance, your agent may compare Garthowen Estate with Jennings Land or Rockaway condos with Ducks Puddle.When it is all said and done, your agent will provide the best comps available, but ultimately you will decide at what price the property is listed.Your choice of listing price will also decide how long your property will be on the market, as everything will sell eventually at the “right price”.So, you’ve hired a real estate representative, you were given the written CMA, you took the sage advice of your agent and listed the property in accordance with the CMA — now what? Now it’s the buyer’s turn.The realtor’s job is to get you the most amount of money in the least amount of time. The buyers want the best deal that is on the market for the property that they chose.In today’s market, buyers are required by the banks to be preapproved and prove that they have the required 20 to 25% down payment plus closing cost that run approximately 4%.Now some people believe that is a bit over-the-top, but I recall when I purchased my house in 1998: the buyer paid $250 for a preapproval, needed 35% deposit plus closing cost and interest rates were 9 ¾%.Then in the mid-2000s banks offered 95 to 100% financing which enable some first time buyers to get into the market, but others were stretched to their limit only to find themselves’ later strapped financially.So, your realtor finds a potential buyer for your property.As the seller, you should require a written offer and proof of financing, ie pre-approval letter.Often, the offer will be lower than the listed price. It is your job to determine if the offer suits your needs/wants.Please bear in mind, not all offers are created equal. In an ideal world, one would love to have a cash offer and we do still see these today. Review all offers with your realtors, so that she can explain the pluses and minuses.You find an offer that you wish to accept. Common practice is the offer is verbally accepted, subject to contract.The buyer places a 10% good faith deposit with the real estate company as stakeholders. A draft sales and purchase (S&P) agreement is produced and sent to both the vendor’s and purchaser’s attorney for review.Once the S&P is agreed by all parties it is engrossed for signatures, up until this time there is no contract and either party may walk away from the deal without penalty. Most contracts are subject to various conditions, the most common is financing.The purchaser is usually given 10 working days to confirm financing with the bank.The pre-approval just sets out the intention of the bank to lend the funds based on certain requirements of the purchaser including confirmation of the value of said property.The bank will then hire an approved appraiser to perform a valuation of the property.The cost for this service will be borne by the purchaser. The appraiser’s valuation will determine the amount that the bank is willing to lend. For instance, you (the seller) list your house at $750,000 on the advice of the real estate representative, you receive an offer at $730,000 which is accepted and you go into contact at this price. The bank’s appraisal comes back at $700,000. Your choice is either to reduce the price to $700,000 as per the appraisal or refuse and walk away from the deal with the purchaser’s 10% being refunded because financing was not approved at that level.Sadly, appraising a property is not an exact science and we are relying upon the interpretation of an individual’s opinion based on factual sales data.Three appraisers can appraise the same property and come up with three different answers.It is standard practice in the industry to accept a 5% variance. The bank customarily will not permit a second valuation on the same property; hence, the value has been established once the property had been ordered appraised by the bank. A professional qualified appraiser must use all data and market information available — in a time of reduced market activity, there can be a shortage of good, reliable data and this can frustrate the job of even the most experienced appraiser.My suggestion, listen to your agent careful, use her experience, expertise and knowledge to guide you to the correct listing price. Make sure she goes over the details in the written CMA.When you receive an offer, try to work with it, one never knows how many offers you may receive and at what level. Be patient and understanding if the appraisal comes in lower than the contracted price. Remember the agent’s job is to be a consultant to you, to help you get the most amount of money in the shortest period of time and that equates to what someone is willing to pay and what the bank is willing to lend.