There is so much market confusion for those that may need to sell and may actually have something that they believe is non-existent such as equity.
First of all we (as licensed market experts) have to be very careful when pulling comps. We cannot look at list prices and say "this is what it is". More often times than not (at this point in the game,) sale prices are going well above list prices.
A market analysis currently takes a nice chunk of time for me these days. It isn't about pulling up the subdivision and saying "this is what they are selling for and these are what they are listed for."
Here is a sample of some of the things I analyze:
- Subdivision Absorption Rate: Some subs are seller's markets (believe it or not) and some still must go through a correction and are depressed markets (lots of listings with few pendings or sales). This helps us determine if we price it on the higher end of the price I come up with, or the lower end. It also helps me explain to you that you could be chasing the market down which isn't a pretty thing!
- What Closing Costs should you expect? I go in depth with the last three months of sales to determine what type of closing costs you should expect to see when we have an offer come in.
- The entire Las Vegas Area Absorption Rate: Are we seeing inventory, pendings or sold trends going up, down or staying stagnant?
- Pricing Recommendations: I give two levels of pricing recommendations for holding times. Do you want your property to have a shorter marketing time or are you ok to wait out a longer marketing time?
- Types of listings: I break down and classify each type of listing (REO, Short Sale, Probate, Auction, Non-Distressed, Corporate Owned, etc.) Each type of listing gets a different value. Did you know........Non-Distressed generally fetch more than the other types? Not much more but when I analyze the comparables it helps me determine HOW MUCH more you can possibly receive for your Non-Distressed, Estate or Probate Listing.
- Types of Sales: Again, I go in and break down the types of financing or all cash purchases that are in your area so we know who your target buyer is for marketing purposes. Is it an all cash investor, FHA first time buyer, VA or Conventional move up or second home? THis is VERY important so your marketing can be geared to the types of financed (no fair housing violations, k?) buyers that are buying in your area!
Selling a house in this declining market isn't brain surgery when a little extra care is taken before hand and you are prepared for all the pitfalls. Buyers WILL pay a little extra to avoid the REO, Probate or Short Sale headache of buying after they lose several houses.
If you are thinking about selling and have trouble making heads or tails of the instant valuation websites or don't think you had a great CMA done recently, please call or email me at: 702-966-2494 x 0 or Renee@ReneeBurrows.com (must enter a verification code to get past spam filter.) I will do my best to give you a comprehensive CMA so you can make an educated decision on whether it is the right time to sell your Las Vegas Area (Henderson and North Las Vegas too) home.
Renee, excellent information for your Las Vegas home sellers. A lot of folks don't get that even in this market, you have to look at data in a hyper-local sort of way. One subdivision may be a dud while another is experiencing brisk sales. Real estate is and always will be local.
Renee - you're right that a thorough analysis is needed. I disagree, though, that each type of listing gets a different value. The buyer is looking at all types, and a bank owned property IS competition for a non-distressed property.
Interesting that sales prices are going ABOVE list prices. The new we are hearing seems to indicate the opposite -- so it just goes to illustrate that one must look at each local market and work with a professional that knows what is happending.
Maggie: Exactly! I have done three cma's in the last week where the subdivisions had VERY good absorption (less than three month's inventory!)
Sharon: Bank Owned and Short sales account for 80 (some) percent of the sales. Financed Buyers get frustrated with the process with viewing (and perhaps even going into contract with) unfinancable property hindered by things like mold and non-permitted additions and deferred maintenance. They are also sick of putting in offer after offer after offer on these homes priced too low. It definitely makes sense that non-distressed goes higher (and it's only 5-10% depending on area) to get rid of some of these REO and Short Sale headaches.
Joan: YES! If it is priced too good to be true, it usually is. Takes about 3-4 contracts for the average buyer to lose properties to realize I am not a used car salesman when I tell them (and show them comps) that they are going higher than list.
Renee - good info here. I find that CMAs in this market ARE very time consuming and complicated because of the different kinds of sales, and some of the oddities in the statistics and trends. We see a number of the REOs and other distress sales selling above asking. It also takes alot of time whe working with buyers to gather the data so an appropriate offer can be made. Some things that happen just do not make sense.
Jeff
Renee, I agree that there needs to be a thorough analysis, because here in Arizona, one neighborhood could be increasing in value, while another could have a 40% decrease. It is difficult to know unless you do the research. I have noticed that with REO's or short sales, they are typically listed at a much lower price than a non-distressed property. Those properties that are distressed sometimes do sell for higher than their list price, but are still not as high as non-distressed properties. The problem is that the homes are all competing for the same buyers, and in today's market, more distressed homes are selling than non-distressed homes. The reason is that they are listed at a much lower price. Foreclosure sales were up 310% in 2008 from 2007, and accounted for 43% of all homes sold.