Pricing Your Salt Lake Home
June 5th, 2008 Categories: Selling
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 »
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 »
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 »
Copyright © 2007 Salt Lake Real Estate Blog Agent Login Design by Real Estate Tomato Powered by Tomato Blogs