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I'm Sorry Mr. & Mrs. Seller, Your Home is Only Worth.....

Real Estate Agent with Private Label Realty ( Denver metro area, Colorado EA1321548

December 14, 2010 04:51 PM

~ I'm Sorry Mr. & Mrs. Seller, Your Home is Only Worth... ~

This post was inspired by a newer agent in my office.

First of all Mr. & Mrs. Seller, a market analysis is not an appraisal. It is a picture of the current market conditions based on sold properties in a designated area. Sold properties are used in an analysis because homes do not necessarily sell for their list price. The value of a home is what it actually sells for, notfor what it lists. I will do a CMA (comparable market analysis), before listing your home to find the proper pricing for it. (We don't just make up a number off the top of our heads, at least I don't.) And a home is not worth what you, Mr. & Mrs. Seller, need to pay off your bills.

My search criteria for a CMA, preferably, is in the same subdivision, same style of home, sold within the last 6 months (or if there are too many properties to use, then I narrow this down to 4 months), within 100 sq ft smaller or larger than your home and approximately the same age. This is my starting point. I will then tweak my criteria from there. Yes, I do use bank owned and short sales in the mix, but I will adjust for pricing since they usually sell for up to 30% lower than a straight sale. In my report for you, I will also include active listings since they will be your competition. And I will also include a list all of the homes currently under contract/pending, since these will most likely be some of the comparisons that the appraiser will be using to aprraise your home. So you see, what you owe on your bills does not factor into the pricing of your home. I'm sure this makes absolute sense to you. You are intelligent folks, so I am certain you will not mix the two.

The way I come up with a price range to sell your home, I use a CMA program. Active Reality Solutions is the program I use. It was written by a local REALTOR here in Denver. It allows me to make adjustments to the comparable homes for condition, upgrades, views, age, sq ft, garage spaces and more. I am also able to 'correct' the incorrect information that the listing agent may have missed or incorrectly entered into the MLS system. I make the adjustments to the comparable sold sign homes by assigning a dollar value for the differences, to make those homes more similar to your home with the same options and upgrades.

Now that I have explained this to you, you can see why your home's value is only between $245,000 and $252,000, not $280,000. If you were to list your home at $280,000, you will only be helping the competition sell their home first. If you were a buyer and I showed you this information, would you buy your home, or would you buy one of these other homes for $30,000 less? I'm sorry Mr. & Mrs. Seller, your home is only worth....

If you live in the Denver metro area and need a professional REALTOR to properly price your home to sell, I am available to help you. I am in the busness to sell your home, not just list it.

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Dawn A Fabiszak

Private Label Realty ( Denver metro area, Colorado - Aurora, CO

The Dawn of a New Real Estate Experience!

Joan ~ were we competing for the same listing?! Did they also tell you about the 14K gold nails?! lol

Mark ~ education is truly the key. Everything goes smoother when the sellers "get it". I would rather take more time on educating them upfront than fighting ignorance a month later.

Kimberly ~ when I come up with resistance, I always ask them to take the roll of the buyer and compare all the houses and tell me if they would till buy their home for $30,000 more and why.

Karen ~ expireds and withdrawn can help with this as well.

Anna ~ I still believe in our industry. If one hold on to the real estate long enough, it will come back....eventually.

Andrew ~ that is one tough client, but not realistic. There are always limits. I always turn it around and make them wear a buyer's shoes.

Dec 17, 2010 05:40 AM

Anonymous

Great post and great line about helping the competition sell faster.

Dec 17, 2010 05:41 AM

#64

Dawn A Fabiszak

Private Label Realty ( Denver metro area, Colorado - Aurora, CO

The Dawn of a New Real Estate Experience!

Ruthmarie ~ I've had to do that many times in my career.

Ken ~ good point as well. thanks

Gary ~ I hope the lines help!

Debra ~ I think they are trying to make sure we are earning our commission!

Dawn ~ I had a vision (being we have the same name and all...lol)

Dawn ~ tweeted? huh! Nice!

Tracy ~ practice, practice, practice and then more practice! Roll playing does wonders.

Dec 17, 2010 05:59 AM

Jan Stevens

Coldwell Banker Pittsburgh - Cranberry Township, PA

Dawn, thanks for simple, professional, reasonable approach to this one -- it can be tough sometimes when sellers are starting from a different place (for example, how much they owe, or how much they need to retire).

Dec 17, 2010 06:18 AM

Dawn A Fabiszak

Private Label Realty ( Denver metro area, Colorado - Aurora, CO

The Dawn of a New Real Estate Experience!

Sharon ~ that' right..it' black and white

Karen ~ now that would be a fabulous thing to happen!

Bill ~ I know, I know...but I have the designations and the broker's license. I won't tell him how to run his company either.

Tony ~ that line absolutely works

#49 ~ thank for the comment.

Linda ~ that is why I show them in black and white, what and and how much the competition is

Ben ~ I always thought you were a sweetheart!

Dec 17, 2010 06:20 AM

Dawn A Fabiszak

Private Label Realty ( Denver metro area, Colorado - Aurora, CO

The Dawn of a New Real Estate Experience!

Liane ~ I hope it helps you. Sometimes when you turn the tables on the seller, they start to see what we are telling them. Good luck.

Karla ~ thanks! I hope it helps your agents

Richard ~ I so agree with you.

Thanks Lyn

Karen ~ lying can only cause frustration and disappointment on the seller's side

Kimo ~ excellent addition. I like that and I think I will be using that in the future.

#58 ~ if they ever sell it and get to the appraisal.

Dec 17, 2010 06:28 AM

Dawn A Fabiszak

Private Label Realty ( Denver metro area, Colorado - Aurora, CO

The Dawn of a New Real Estate Experience!

Tom ~ we are fortunate here that not every property sold is a distressed property. They do contribute to being a comparable property, but they are not the only comps thank goodness.

Tni ~ it's a difficult market on everyone involved and a hard lesson to swallow.

Marte ~ I believe it is the only way to do it. That is pretty much how appraisers find the value of a home. Why reinvent the wheel?

#65 ~ that is actually what happen with homes that are overpriced. They help the competition sell.

Jan ~ and those things are NEVER a factor of a home's worth.

Dec 17, 2010 06:36 AM

Woody Edwards

First Choice Realty, Inc - Chesterfield, VA

A Realtor® Who Answers His Phone!

I am going to slightly disagree..........A house is worth what a buyer is willing to pay!

I'm still trying to figure out how to read a buyer's mind

Dec 17, 2010 09:22 AM

RhondaHeaslip NanaimoRealEstate

RE/MAX of Nanaimo - Nanaimo, BC

Dawn,

Well written. I always say that list price is merely an "invitation to treat"....but what similar homes in the area have recently sold for is the true barometer of the market. That barometer may not necessarily jive with what the seller needs to get out of the property. It is, however, what the current local market will bear.

Dec 17, 2010 10:22 AM

Gerard Falzon

- Gianni Property Group - Cary, NC - Cary, NC

Rental Property Expert, Investment Property Expert

To Tony (#48) - You beat me to the punch!

"If you were to list your home at $280,000, you will only be helping the competition sell their home first."

I dig that line and will be sure to use it!

Dec 17, 2010 11:08 AM

Dawn A Fabiszak

Private Label Realty ( Denver metro area, Colorado - Aurora, CO

The Dawn of a New Real Estate Experience!

Yes, Woody, but if the buyer is willing to pay more for it and it does not appraise for that amount (and most folks have to get a loan), it will sell for the appraised price or the buyer must bring additional cash to offset the agreed upon price.

Rhonda ~ very true.

Dec 17, 2010 11:15 AM

Jenny Durling

L.A. Property Solutions - Los Angeles, CA

For Los Angeles real estate help 213-215-4758

If only all agents would break pricing down to sellers this way. Unfortnately, there is still a large number of agents who are willing to 'buy' the listing by putting the seller's unreasonable price on the property and then start talking them into reductions after they have it listed.

Dec 17, 2010 12:35 PM

Debbe Perry

Real Living Carolina Property - Morganton, NC

828.439.3084 Morganton/Lake James NC

Bookmarking, because you've given a great breakdown of the process!

Thanks for the great post!

Dec 18, 2010 02:35 AM

Gene Riemenschneider

Home Point Real Estate - Brentwood, CA

Turning Houses into Homes

There is a lot that goes into a market analysis. I think you have hit on a lot of the key points.

Dec 18, 2010 01:05 PM

Dawn A Fabiszak

Private Label Realty ( Denver metro area, Colorado - Aurora, CO

The Dawn of a New Real Estate Experience!

Jenny ~ taking a listing for a ridiculous price and then hitting the seller up for lots for price reductions is not doing the seller any favors. (my thought, anyway)

Debbe ~ thanks for stopping by

Gene ~ I tried to touch on the most important parts.

Dec 18, 2010 02:46 PM

Robert Courtney

Lihue, HI

Century 21 All Islands, RA, CDPE, MCRE, CIAS

Whether the client accepts the work I have done to establish a selling price is a "key" for continuing on any further. I will not list high to come down unless the reductions are part of the listing agreement.

Dec 19, 2010 04:13 AM

Ric Mills

Keller Williams Southern Az - Tucson, AZ

Integrity, Honesty, and Vast Real Estate Knowledge

"I know you need/want more out of the selling of your home", Did you understand that I said "SELLING" and not just "LISTING" your home. These figures we give you are a real time look at your market and it does you a dis-service just to list the home and not price it right to SELL the home. The longer it is on the market, experience shows us, that the less it will actually sell for. The longer it is on the market, buyers will pick it apart-"because there has to be something WRONG" because it was on the market so long. That is almost a guarantee that the offer price will be even lower.

Dec 19, 2010 05:08 AM

Dawn A Fabiszak

Private Label Realty ( Denver metro area, Colorado - Aurora, CO

The Dawn of a New Real Estate Experience!

Bob ~ at that point, you can tell if they are going to be difficult to work with. I don't want to have to have to work uphill against the sellers the entire listing agreement.

Ric ~ You hit the nail on the head! Absolutely true.

Dec 19, 2010 06:08 AM

Wayne B. Pruner

Oregon First - Tigard, OR

Tigard Oregon Homes for Sale, Realtor, GRI

Many Sellers seem to think that market conditions apply to everyone but them. What they want/need has no bearing.

Dec 19, 2010 09:15 AM

Melissa Juarez

Massachusetts Buyers Broker Agency, LLC - Quincy, MA

Thanks for the post. This is the difficult part for listing agents. I always say honesty is the best policy.

Dec 20, 2010 01:24 AM

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