As hard as it may be to believe this, I’ve had sellers initially ask me (certainly it has to be on a whim) “what’s my house worth?” Now, this has happened in shopping malls, restaurants and even a few sidewalks. Hmmmm….okay, let me grab my crystal ball, knock the dust off and I’ll have an answer for you….someday. When I tell them that I don’t believe in using the tried–and untrue method–such as the PFA method, otherwise known as the Plucked from Air method, you just wouldn’t believe the looks I get from folks. It’s everywhere from what! you can’t pull a number out of the sky, what kind of real estate agent are you? to total confusion that I don’t know the value of every property in every community in the Naples area. As unfortunate as it is, I personally know of other agents that haven’t a clue what a property would sell for but to show a seller how quick they are on their feet, they use the PFA method. This is such a disservice to any homeowner thinking of selling their property and I’m here to change that, one seller at a time. To provide a seller with a market price for their property, I have to thoroughly analyze it to arrive at an accurate listing price range and there’s many factors that go into conducting a Comparative Market Analysis. There’s data gathering, a tour of their home to actually, now hold on to your seat guys, physically see their property (yup, you heard me, see it) to many hours of work that go into compiling a complete analysis that will put them at price range that will give them a quick sale for the best possible price. Something to consider is adequate room for negotiating but not so much room that it’s overpriced for the market. As with anything in life, there’s a breakpoint and pricing strategy is no different. You don’t want it so over market value that you’re losing the very buyers you’re trying to attract. For instance, if you have a qualified buyer whose lender has told them they can’t go a penny over $500,000, then, if yours is listed at 30% higher than market value, the buyer you’re wanting to attract will move on to the next property because why would they be so foolish to believe your home would ever come down to their set price range. Yes, it’s generally a good idea to leave a bit of negotiating room, but, learn what the neighborhood’s list-to-sale-ratio is and tweek it a bit, it’s always a good indicator to follow. If it’s 6-7% stick close to the vest on it or maybe jump it up a percentage or two. Those properties that are priced at a realistic market value will attract more buyers and you may even get a sale of above list price if you receive multiple offers and go with the highest priced offer, if that is more important to you than terms. We offer a complete CMA as part of our service to sellers looking to sell their property in the Naples area. For further information or any questions on Naples real estate please contact Ruth Bethem at Ruth@RuthBethem.com or direct at 239-777-7007 or toll free 877-777-7545.
Okay, so we have the question and here’s the answer, YES, YES AND YES! Not only should you have one, it’s imperative you have one. As a service to every buyer we assist in purchasing any form of real estate in the Naples area, we conduct a thorough market analysis for our buyers before any ink makes it’s way to an offer. Buyers may have a general idea what a home in any given area may be worth, but it’s the job of a professional Realtor® to function as an advocate for their buyer in assisting them in understanding the current market value of recent sold properties in an area of which they are contemplating purchasing. This is a really important step for buyers, whether they be well-seasoned purchasers or first-time home buyers. Many times, a home or homes in an area may be well above the price point of an average like-kind home that has recently sold. Sellers sometimes simply insist on over-pricing their property to give them “room for negotiating” and that “cushion” can be upward of 30% plus! More on sellers in tomorrow’s blog post. So, when our buyer has selected their preferred property, we collect data specific to the community in which the property resides, comparing the square footage of the interior space, overall square footage, amount of bedrooms, baths, interior appointments, location within the community as well as desirability and accessibility of the community within the area, lot size and view, garage space as well as condition, which is a big factor. However, keep in mind that the old adage still stands regarding location, location, location. That has a big impact on the value of the property. Another important factor is the functionality of the floor plan as there are some homes that have larger square footage but have an obsolete floor plan that makes it terribly undesirable for future buyers without major reconstruction, therefore impacting the closed sale price. Of course, it holds true in the other direction. Those closed sales of homes that have sold for considerably more are generally due not only to square footage size and location, but the upgrades, appointments and finishes that are in place. In today’s market, buyers are not only looking for a great deal, which generally constitutes under market value at best or realistically, spot on to market value, but all the bells and whistles that would make their dream home a reality. My job is to gather the data, analyze it and relay it onto the buyer so they can get the best home for the best price and not overpay for a property. Several factors come into play in this and I believe having an educated buyer that understands just what the value of their dream home should be will give them the best advantage in negotiating a superb deal for them now and in the future when they’re ready to sell, whether it be for the end user or the investor. For more information on a Comparative Market Analysis and assistance in purchasing real estate in Southwest Florida please contact Ruth Bethem at Ruth@RuthBethem.com or direct at 239-777-7007 or toll free 877-777-7545.