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Pricing is the most important part of selling your property. You can have it professionally staged, landscaped and virtual tours to beat the band, but if it is priced too high no one will look at it. When people shop for a property they look within a specific price range and if you have priced your home too high or too low you may lose a buyer.
Get a REALTOR® that knows the market. In today’s market you really need the expertise and the marketing ability of a skilled REALTOR®. It takes a lot more than putting a sign in the yard to get a house sold today, and a realtor should have the expertise to assist you with pricing your home. Ask your REALTOR® to provide you with:
Comparative Market Analysis (CMA)
Most local MLS databases make it relatively easy for a REALTOR ® to create a CMA. Agents need to enter in the specifications of your home, number of bedrooms, baths, square feet, year built and so on and then find those that are active, sold (within the last 90 days) and they will come up with an average price/square foot. The sold is where you want to price your house, as that is the price the market is stating that comparable homes are being sold at. The downfall of a CMA is in the data. The CMA does not take into account the neighborhood, the condition of the property or the sales history of the area. It is important to remember that a CMA is only an estimate of what the home could get on the open market under normal circumstances. It in no way sets value for the property.
Brokers Pricing Opinion (BPO)
A BPO is a tool used by lenders, mortgage companies, and relocation companies to obtain an estimated value of a property to determine viability or strength of a sale. They usually contact a REALTOR® and pay the REALTOR® a set fee for researching comparable properties to determine value. A BPO will have information regarding comparable Active Listings, Under Contract Listings, and recent Sold Listings. They will also contain information on sales trends in the area, employment opportunities, and an estimated cost of repairs for the property. BPOs are a little more detailed than a CMA, but they do not determine true market value for a property. BPOs are an estimate of value.
Absorption Rate
The easiest way to understand current and future market condition is to monitor the
real estate absorption rate. The real estate absorption rate is the rate at which the inventory of homes for sale is being sold. You will see on many REALTOR® CMAs the heading Days on Market, but that figure can easily be manipulated by removing and then relisting a property to “reset” the numbers. The real estate absorption rate is a better gauge of how long it will take to sell your home, and how aggressive you will need to reach your timing goal to sell. Mathematically, absorption rate is the measurement of current housing supply divided by the current rate of sales, expressed in months or weeks of supply. A simpler way to express the definition of the
real estate absorption rate is to say it is the number of months that the market will need for the foreseeable future. Thus, an absorption rate of 11 would mean that at our current rate of sales, we have all the homes for sale in the
Greater Nashville area that the market needs for the next 11 months. It is all about supply and demand.
Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at current price), resulting in an economic equilibrium of price and quantity. That
equilibrium of price and quantity in the housing market is determined by the absorption rate.
If your REALTOR® can not provide all three of these reports, he or she may be doing you a disservice.
Helping a friend or a relative who is a REALTOR® may not be the best course of action in today’s marketplace. Your REALTOR® needs to know the market, and help you to compete in the market in a way that best benefits you.
Greater Nashville and Surrounding Area Real Estate Specialist – Diane O and Friends
We at
Diane O and Friends are Realtors who know the market. We will assist you with setting a price, a free 1 hour
home staging consultation, a listing of the top
home inspectors who can assist in a pre-listing inspection and of course of network of professionals to assist with any repairs. And if you are looking for an appraisal, we have some of the area’s most highly respected. And don’t forget the
home warranty. Providing a home warranty gives your home the competitive advantage it needs in today’s buyers market.
For more information about Diane O and Friends and our real estate services please
fill out the online contact form or give us all call.
Office: 615-371-1544
Diane Cell Phone: 615-406-2184
Mandy Cell Phone: 615-477-6959
Fax: 615-472-7931
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