Archive for the 'Selling' Category
Pricing Your Salt Lake Home
June 5th, 2008 Categories: Selling
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Pricing Your Salt Lake Home
The most common method for pricing a home is the CMA or the Comparative Market Analysis, Comparing the subject property to the homes that have recently sold.
Although an official appraisal can go back 6 months, I don’t like to go more than 3-4 months.
Once I have gathered the comparable sold data you will notice a range. I will then take the high and the low and then I will establish a center line. Then based on the features and condition of the subject I determine where on the center line you fall.
Then I look at the active listings in the area to see what the competition is. You will quickly see where the “REAL” competition is. You will see homes listed and think, they are never going to sell at that price (you’re right). After a little studying you will identify the competition and then “If You Want To Sell” you have to be the better deal.
Now this is not a one size fits all, it is more of a guiding principal.
I see a lot of agents use CMA software that uses adjustments and then establishes averages which is not wrong. The problem with that method is that the closed properties are one part of the equation. The software approach is to scientific and appraising is an art and not a science.
| Discussion: No Comments »
The Tale Of Two Markets
January 6th, 2008 Categories: Selling
Below is a seies of Slides that I hope will give a visual to the current state of the market.
| Discussion: No Comments »
A Comparative Market Analysis
December 28th, 2007 Categories: Selling
Salt Lake Comparative Market Analysis
How is the value of a home determined? This is great question that has more than one answer.
Home Values from a Buyer’s Point of View
From the buyer’s perspective it is supply and demand. They comparison shop, they will look at all the homes in their area and price.
They will compare the price along with the features and benefits that are associated with the property. Things like area, square footage, number of bathrooms, garage, condition…
As you can see the example in the table below, it is that simple. The property that offers the most features and benefits for the best price is the one that has the most value to a buyer.
Table 1.1
|
Item |
Prop # 1 |
Prop # 2 |
Prop # 3 |
| List Price | $200,000 | $200,000 | $190,000 |
| Area | Similar | Similar | Similar |
| Sq Ft | 2,350 | 2,300 | 2,450 |
| Bedrooms | 3 | 3 | 4 |
| Baths | 2 | 2 | 2.5 |
| Gar | 2 | 2 | 2 |
| Condition | Fair | Fair | Remodeled Kitchen |
Things Don’t Have an Affect on Value
What you paid
What you owe
What you want
What you need
Home Values from the Bank’s Point of View
Banks use appraisers to determine value. Appraisers use a comparative method, but they go by past history instead of the active listings. The bank is looking for a justification that the property is worth x amount of dollars. Appraisers aren’t really looking for a value as much as they are justifying a purchase price.
Now let’s look at the table below and we will use the same information except we use it as recent sold properties.
Table 1.2
|
Item |
Prop # 1 |
Prop # 2 |
Prop # 3 |
| Sold Price | $200,000 | $200,000 | $190,000 |
| Area | Similar | Similar | Similar |
| Sq Ft | 2,350 | 2,300 | 2,450 |
| Bedrooms | 3 | 3 | 4 |
| Baths | 2 | 2 | 2.5 |
| Gar | 2 | 2 | 2 |
| Condition | Fair | Fair | Remodeled Kitchen |
Using the table it would be safe to say that a similar property is worth $200,000. So you can see that the two tables have the same info but it depends on the perspective.
Now that we have looked the way banks and buyers looked at value, we have to factor in that this information is fluid and is changing on a daily basis.
Determining the value of a home is not a cut and dry process, it is an art not a science. The national online sites try to capture traffic by offering home values, when the truth be told, the best source is an experienced real estate professional, not someone that just got their license in the last year or two. Someone that has been through the market cycles before and clearly understands what is going on in the local market place.
If you are interested in a FREE list of comparable homes that have sold in your area you will get real info from a local agent that is active in the market.
| Discussion: No Comments »
Utah Real Estate Purchase Contract REPC
December 6th, 2007 Categories: Selling
Utah Forms For Selling Real Estate
When selling Real Property in Utah the standard form to use is called Real Estate Purchase Contract. a.k.a. the REPC (pronounced Rep-See).
This is the form that Licensed Real Estate Agents must use, buyer and sellers may use any form they choose however if there is a Real Estate agent involved then this is the form. This form is approved by the Utah real estate commission and the office of the Utah attorney general, effective august 5, 2003. It replaces and supersedes all previously approved versions of this form.
It is actually a very good document and covers most circumstances that could arise. It is a very win-win and allows a buyer and seller to enter into an agreement to sell-buy real property and allows the buyer to do their diligence with deadlines. It covers things like inspection, appraisal, loan and remedies for defaults.
To download a copy of the Real Estate Purchase Contract.
Everything must be in writing no matter how much you know or like someone or how nice they seem.
Remember “Money Changes Everything“.
| Discussion: No Comments »
Is It Better To Wait Till Spring To Sell?
December 1st, 2007 Categories: Selling
Today a seller asked me if this is a good time to sell. I asked if she was definitely moving and her response was yes. So then I told her it was a great time to move.
Now does that mean I am going to throw up a sign and get three offers? No. But if you think about it, there never is a good time to move. Selling a house, packing, relocating the kids, the dog…
Then the question comes up, isn’t it better to wait till the spring? The answer is a resounding NO. Then the question is, aren’t there more buyers in the spring? Yes, what else is there more of in the spring, sellers. Lots of them, they’re like perennials. In fact this spring there will be more sellers than buyers.
So the fact is now is a good time to sell (if you have to), because any buyer that is out there now is motivated and does not have a lot to choose from and if you are in good shape and priced good, you should have less problems than in the spring.
Of course the other mind numbing thought of “Should I sell then buy or should I buy then sell“?
Am I being over optimistic? Maybe, but a good salesperson is definitely an optimist, would you want to hire Eeyore? The trick is an optimist and the truth.
| Discussion: 1 Comment »
The Three Most Important Things To Know When Selling A Home In Salt Lake
November 4th, 2007 Categories: Selling
The three most important factors when selling a home in a normalized market are price, condition and a modern day highly trained real estate agent.
Now that the market in Salt Lake has shifted from a red hot screaming seller’s market to a broad market, seller’s now have to deal with competition. The last couple of years have spoiled sellers and real estate agents alike. Since approximately two thirds of the real estate agents have gotten their license in the last five years, most agents do not understand what has and is happening and what it takes to sell a home. The training in the last few years was contact your family and friends. The untrained agents were actually selling homes.
When you walk into a house and there is way too much furniture and it very hard to see yourself living there and setting a preview appointment is challenging. They are playing the let’s list high and negotiate game.
Then you walk into a house and the all the lights are on, soft music is playing, candles are lit, the sellers have busted their butts making every detail perfect the Price is very competitive. When you want to show, you call a toll free number to a call center that answers the phone Monday thru Saturdays 8:00 AM - 8:00 PM, Sunday 8:00 AM - 6:00 PM, no voice mails.
|
Seller #1 |
Seller #2 |
| Let’s List High, we can always come down | Priced to offer more than the competition |
| Yard is not edged | Yard immaculate, the dirt strip was raked |
| No attempt to stage the home | Looked like a magazine |
| Walk around bulky furniture | All lights were on, candles lit |
| Claimed basement was 75% finished, not one room had carpet or ceilings or paint | Professionally finished and tastefully decorated |
| Carport | Garage |
| Call two agents and leave voice mails, eventually someone gets back to you | Call a showing service Toll Free number live person M-S 8am-8pm, Sun 8-6 |
| Do it yourself photos | Professional Photographer |
 |
|
| Discussion: 2 Comments »
Things The Online Home Value Sites Don’t Want You To Know
September 23rd, 2007 Categories: Selling
The big buzz Zillow. Consumers get pricing online instantly. How nice would that be? The reason no one hasn’t done it before because it cannot be done nationally with accuracy. Some markets it can be done nicely and others not even close.
Salt Lake City Home Values
Utah is a non-disclosure state. Meaning the sales price is not a public record. Some states have a transfer tax and the tax may be public and simply figure out the price by the tax. However in Utah the transfer deed states for $10 and other considerations. Now the amount recorded against the property is public. However that does not tell how much the property sold for.
Zillow has been off by 40% according to Leslie Walker in her Feb Washington Post article. That is way too much to consider useful.
The other problem with the system that Zillow is trying to implement is that it is a scientific approach. Appraising is an art and not a science. There are nuances that are not tabulated in the science approach. For example if ramblers are in style and there is a comparable split entry (the only difference is the stair case) one could sell for a lot more than one would pay for the other property. What about a property that is 10 doors away from the house that sold on the busy street? These are the obvious ones.
Now let’s suppose we work through all the algorithms and come up with an accurate assessment and the market is shifting (always has and always will). It is now only worth what a buyer is willing to pay, regardless of what is owed, what the owner paid, what it cost to build, what the neighbors sold for. It is only worth what a buyer is willing to pay PERIOD.
Let’s say there are 12 comparable sales that justify a price of $250,000 for a home. If there are 10 homes in the nearby area that are selling for $240,000 the house will not sell for $250,000
Real Comparable Sales For Salt Lake and Surrounding Areas
For real comparable sales in the Salt Lake Metro area. Salt Lake, Utah, Davis, Tooele, Weber counties go to http://www.morehousevalues/. There you will get real comparable sales for the area, not a guessing formula that Zillow uses.
| Discussion: No Comments »
Let’s List high and Leave Room For Negotiating
September 23rd, 2007 Categories: Selling
This is probably one of the biggest mistake a seller can make and here is why. If a buyer is looking at a list of houses online or wherever, do you think they start at the ones that seem to be overpriced even a little? They are searching for the lowest price in their specific search criteria. It also reduces the activities of the highly productive Real Estate Agents.
Since Nov 1995 to current the average List to Sale Ratio in Salt Lake County is 98% as Reported by the Wasatch Front MLS. Does that mean you can throw a price out there and you will get 98% of that? Absolutely not what it means is you cannot list your home more than 1 or 2 % above market value.
The real damage happens because the best activity comes in the first few weeks. When you are pardon the expression “fresh meat”. If you are overpriced during that period you missed all the active buyers currently on the market. Then you will get the trickling of the new buyers. Then after about 2-3 weeks there is the perception something is wrong.
Then as a seller you realize that the experiment of leaving room for negotiation didn’t work and then you adjust the price. Now you are saying we are desperate, you have been on the market a while and then you lowered the price. Buyers smell blood or at least the perception of blood. They will start to make offers less than what you lowered it to.
It is so much easier to price it correctly in the beginning and turn down offers then to not get any at all.
| Discussion: No Comments »
Should I Sell Then Buy or Should I Buy Then Sell????
September 23rd, 2007 Categories: Selling
Here you sit knowing that the family is moving. You, your spouse, 4 kids, a dog and a hamster. You’re moving out of state and have to be there is 60 days to start working.
Do we go to the new area and start house hunting and buy a house contingent upon the sale of our Salt Lake House? Do we sell the Salt Lake House contingent upon going to new area and finding a suitable house? Do we sell the Salt Lake House and then just move, all our stuff is in a P.O.D. stay in an extended stay or with luck relatives (your luck, not theirs, 6 people 2 pets).
Price or terms, remember this statement.
Let’s look at the options closely so we can see how to navigate the decision process.
1. Go to the new area and house hunt, buy a house contingent upon the Salt Lake House selling. That depends a lot on a couple of things. What is the market like where you are going? Is it a buyer’s market, is it a seller’s market? Now let’s suppose it is a balanced market and homes are selling in 60-90 days. You make an offer on a home with the contingency and now you have to set a closing date. Hmm, the answer I don’t know, is not a strong position to negotiate from is it? You have become a weak buyer and for a full price offer the seller might be willing to do that and that just cost you 2-3%, or $6-12,000 depending on the price range. Now let’s suppose the seller said OK but they got their price and they want to be able to shop for back up offers. Low and behold someone else buys the home, now you have the house hunting to start all over again.
2. Sell the Salt Lake House contingent on going to the new area and finding a suitable home. Any buyer that is willing to pay you top dollar is motivated wouldn’t you agree? Remember when you were looking for a place to live how strong were you as a buyer. Now you are a weak seller. This may cost you a buyer or at best a few percentage points on the price. Now you fly to the new area and you look find a home and make an offer get it accepted and you do your inspection and order the appraisal (both paid for) and low and behold your Salt Lake sale falls through (why is not important in this study). That means you have to cancel the deal in the new market and start marketing your Salt Lake Home all over again.
3. This seems like the least of the three options because from an emotional point of view you are selling a house, you, your spouse, 4 kids, a dog and a hamster are homeless, that will test your sense of adventure. But let’s think about it. This scenario makes you the strongest buyer and seller of all the options. If a ready willing and able buyer comes along and has to move immediately you are in a position to accommodate them. But remember that statement, price or terms, if the buyer has to move right now. Whose terms are they, the buyer’s, if the terms are the buyer’s that means it is your price. Now you sold your Salt Lake House and you are in the new area flush with cash. You are looking for a house and you find and awesome House it is vacant and the seller would really like to close as fast as they could. Their terms equals your price again. Between the two transactions this option can be worth around $12,000-24,000 cash in your pocket. Yes there are going to be some expenses involved that might not have occurred otherwise. But it is a lot easier to negotiate when you can pick and go at any time and or close as fast or slow as a seller might want to.
| Discussion: 1 Comment »
Copyright © 2007 Salt Lake Real Estate Blog Agent Login Design by Real Estate Tomato Powered by Tomato Blogs