Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out
Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

sell-buy seminar.APR 07.ppt - Lake Tahoe Real Estate Blog

VIEWS: 5 PAGES: 99

									     Gary Bolen & Richard Bolen




   How to   Sell a Home
  How to   Buy a Home

In today’s Real Estate Market
            How much did Tom lose?
• Seller Tom paid $200,000 for his house 10 years ago.
  He decides to sell.
•   Tom is sure his home value is $575,000.
•   Market facts reveal it’s closer to $475,000.
•   Tom lists for $599,000.
•   House sits on market for a year.
•   Tom changes agents. Lists again. House sells at $450,000.
•   House sells six months later at $450,000.
•   How much money did Tom lose?
•   How much did Tom lose in 1.5 years it took to sell?
                       Our Purpose:
                         To put you Information…
                         Fact-based in Front of
                             market…
                         theNot Hearsay
                       Information you can Trust
                       about Lake Tahoe and Us.
                            No not let
                         … andAgenda the market
                         put itself in front You.
                            Not to get You to Sell
Information is King!
                           Rumor Free
     The National Statistics

www.ofheo.gov

National Home Price Index

Issued quarterly
Your Market Statistics Resource

       Articles
       Statistics
      All of the Information…
       Charts
   www.laketahoerealestateblog.com
      All of the Time!
       Absorption Rates
       Constant Flow & Updates
       Fact-Based Information
               Market Reality
• A reasonably priced home always sells

•   PRICE is always barrier to successful transaction

• Disconnect between what most Seller’s want… and
  what Buyer’s are willing to pay.

• The successful Seller / Buyer narrows this disconnect...

• The successful Seller prices a home according to
    market facts… not for “what   I must have.”
            Market Reality
         So what does Tom do?
I know my house is worth $600,000…
         Successful Seller?
My Neighbor said it’s worth every bit of it!
         Professional Seller!
I don’t care about all your numbers…

I got an agent who tells me prices are 20% up.

I’ll get $600K or I won’t sell at all!
    Two forces that characterize a
             RE Market:
• Demand
• Supply (or inventory)
  What is a hot Market?
• Greater demand than supply
  What is a cool Market?
• Greater supply than demand
Every Real Estate Market is Cyclical

       • Up
       • Down
       • Flat
       • Up again
       • Repeat
The Lake Tahoe Real Estate Cycle
                                       Lake Tahoe Real Estate Cycle


  $550
                                                                                            $475
  $500    Average House:                                                                           $450
  $450          15% Interest Sustained
                 Longest
             3BD, 2BA 1988 uptick…
                   Increase…
         2-Car – 1,500 sq ft ever! com…
  $400
                                    Dot
  $350                                                                               $310
  $300                       Flat Cycle?
              Another Flat for
  $250
                 Flat for
  $200           7 Years 8 Years $150 $175 $190
  $150            $120                        $130 $130 $130

  $100                   $80     $80    $80

   $50    $22
    $0
         1970's   1979    1981    to   1988    1988   to   1996   1997   1998 2000   2003   2005 2006
   The source of real estate data
• MLS

• Members only

• SOLD data… County Recorder

• Best indicator market condition

• Best indicator market value
          Recent Article
• April 12, 2007
• Tahoe home price $1.4 million.
• 20% price hike.
        Mythbusters?
• Number sales dropped slightly.
• Median Tahoe home price up 6.2%.
• $873,800 median now v. $822,500.
        Statistics: CA & NV market
SLT: Total Number SFR Sales by Year

        SLT: Number Annual Sales - SFR                     Difference SLT Number Annual Sales
 1000
                   843                                                                    2006
                                                    40%
  800   697                  687
                                                               20.9%
  600                                               20%
                                         438
  400                                                0%

  200                                               -20%
                                                                            -18.5%
   0                                                -40%
        2003      2004       2005        2006                 2004          2005         -36.2%



                                                Off 54.7% Since 2004 Mkt. High
         Statistics: CA & NV market
Stateline: Total Number SFR Sales by Year

       Stateline: Number Annual Sales - SFR                     Difference Stateline No. Annual Sales
 200
                    173
                                                                     43.0%                        2006
                                                         50%
 150                           140
        121                                              30%
 100                                          89         10%
                                                         -10%
  50
                                                         -30%                     -19.1%
   0                                                     -50%                                   -36.4%
         2003       2004       2005           2006                  2004           2005




                                                     Off 55.5% Since 2004 Mkt. High
  S. Lake Tahoe, CA Median Prices

Year             With Keys W/out Keys 3.5% difference
2004               $375,000    $363,500
2005               $475,000    $455,000
                                          Flat!
2006               $475,000    $460,000
2007               $480,000    $462,000

                Based 1%             Enough for a trend?
$2K to $5K increase, or on only 80 Sales?
   S. Lake Tahoe, CA Median Prices

                With Keys W/out Keys      Flat?
                                       3.8% Up Skew

Last 365 Days    $474,750   $453,000
                                        Stable?
Last 180 Days    $480,000   $465,150
                                       Flat!
Last 90 Days     $482,500   $474,000    Not Up!
Last 30 Days     $425,000   $420,000

                Based
                                       20%?
$30K - $50K decrease on few Sales? What is the trend?
       Stateline, NV Median Prices
Year         With       Without    14% difference
2003        $595,000    $548,750
2004        $710,000    $645,000
2005        $844,500    $775,000
                                   7% increase
2006        $915,000    $835,000
2007       $1,125,000   $800,000

An increase (22%) Only 23 Sales!
Was 20% increase fact based information?
A decrease (4%)
        Stateline, NV Median Prices

                  With       Without    $2,000 UP Skew!
                                        17.5% increase &
Last 365 Days    $917,500    $800,000
                                          $6,000,000
                                        $35K decrease
                                        from all of 2006.
                                        3.5% to 5% decline
Last 180 Days    $884,500    $755,000     $9,000,000
                                        from all of 2006.
Last 90 Days    $1,225,737 $1,039,500   Prices have
                                        $12,500,000
Last 30 Days    $1,039,500   $760,000   Gone down…
But what about all
22 sales in 90 daysof this?
W/out Lakefront & Glenbrook support…
9 sales in 30 days
                      That article?
Re: Average single-family home at Tahoe $1.4 million
by Anonymous on Thursday, April 12 @ 06:59:51 PDT
That is bunk. The average of the homes "sold" may be $1.4



           20%?
million but we have a slow sales market in which the higher priced
homes are selling while the cheaper homes are stagnant.

Let's not get nuts or use bad   statistics that are "sales
skewed", due to a certain segment of the market
moving, to establish what the perceived home value is at Lake Tahoe.
         That article?

   • The
• Why?it affect? seem right…
      If doesn’t
   • The overall Market.
   • agenda…
• AnKeeps Seller’s prices up…
            Call us.
   • make Buyers away.
• To Keepsa high-end market.
   • Extends market down cycle.
• To motivate high-end Sellers.
              Blog.
   • Makes Tom really happy.
• Get more high-end listings.
   • Misleads the public.
 Statistics: CA & NV market
SLT: % Difference Original List v. Median Sold:

                  S. Lake Tahoe: % Difference List v. Sold Price
 20%


 15%                          13.6%

       10.0%                                       9.9%            9.2%
 10%


  5%


  0%
       365 Days               180 Days             90 Days         30 Days
       Statistics: CA & NV market
Stateline Percent Difference Original List v. Median Sold:
                   Stateline, NV - Avg. List v. Med. Sold Price

     25.0%

     20.0%                                         17.4%
                               16.6%
                                                                  14.5%
     15.0%
             11.7%
     10.0%

      5.0%

      0.0%
             365 Days         180 Days            90 Days         30 Days
 Statistics: CA & NV market
  Average Price Reduction: Last 365 Days

South Lake Tahoe             Stateline



-10.6% -15.1%
 1.3%
-11.9% -19.9%
         4.8%
$48,018 $120,800
  SLT: Diff Avg. List Price of what SOLD and what DIDN’T.
                    In the last 365 days!

             Difference in Average List Price                    Percent Difference in Average List Price

    $1,000                                        $929     50%
     $900                                                                                           38.9%
                                    $790                   40%
                         $774
     $800                                                             26.6%          28.1%
                                                           30%
     $700
              $568                                         20%
     $600
     $500                                                  10%
     $400    SOLD      ESCROW      ACTIVE       ACTIVE +   0%       ESCROW          ACTIVE        ACTIVE +




Many homes have more than a 10% reduction to sell!
SLT: Difference Time on Market of SOLD and what has not:
                   In the last 365 days!
          Difference in Time on Market                     Percent Difference Time on Market

   250                                     243       50%                                 43.0%
                                                     40%
   200                                               30%
                                                              19.7%
                   173                               20%
                                                     10%
   150   139
                              126                     0%
                                                    -10%
   100                                              -20%                    -9.9%
         SOLD    ESCROW     ACTIVE       ACTIVE +             ESCROW       ACTIVE       ACTIVE +




  It takes a lot longer to sell an overpriced house!
 SLT: Difference Median SOLD and Current Price

     Difference in Median Sold / Current Price           % Difference Median Sold /Current Price

  $800                                             25%                                    23.1%
                                                                            21.8%
  $700                                             20%

                                $579      $589     15%
  $600
                                                   10%
  $500    $453       $444                          5%
  $400                                             0%
  $300                                             -5%         -2.0%
          SOLD      ESCROW     ACTIVE   ACTIVE +             ESCROW         ACTIVE       ACTIVE +




Many reduced Homes need to be reduced more!
  NV: Diff Avg. List Price of what SOLD and what DIDN’T.
                   In the last 365 days!
             Difference in Average List Price                    Percent Difference in Average List Price

                                                           20%                       18.9%
    $1,900                                                                                          15.8%
                                   $1,441        $1,389    15%
    $1,400              $1,262
             $1,169
                                                           10%        7.4%
     $900
                                                           5%

     $400    SOLD      ESCROW      ACTIVE       ACTIVE +   0%       ESCROW          ACTIVE        ACTIVE +




Many homes have more than a 15% reduction to sell!
NV: Difference Time on Market of SOLD and what has not:
                  In the last 365 days!
          Difference in Time on Market                     Percent Difference Time on Market
                                           291
   300                                              50%
                                                                                         39.2%
                                                    40%
   250
                                                    30%
                   191                              20%
   200   177
                              167                              7.4%
                                                    10%
   150                                                                     ACTIVE
                                                     0%
   100   SOLD    ESCROW     ACTIVE       ACTIVE +   -10%      ESCROW        -6.3%       ACTIVE +




  It takes a lot longer to sell an overpriced house!
          NV: Difference Median SOLD and Current Price

    Difference in Median Sold / Current Price            % Difference Median Sold /Current Price

 $1,500                                            50%
 $1,300                                            40%
                              $1,080     $1,047
 $1,100
                     $912                          30%                      25.9%         23.6%
  $900     $800
                                                   20%
  $700                                                        12.3%
  $500                                             10%

  $300                                             0%        ESCROW         ACTIVE       ACTIVE +
           SOLD     ESCROW    ACTIVE    ACTIVE +




Many reduced Homes need to be reduced more!
Sidebar: Recent Sales Success Story
                  Owner paid: $145,000
                  Date: June 1999

                  Listed: $425,000
                  Date: May 2006

                  Sold: $410,000
                  Date: June 2006

                  24 Days on Mkt.
    Bijou - SLT

                     182% return
Owner made $265,000:
                     in 7 years
 Sidebar: 2006 Sales Success Story
Stateline, NV High End - $3,000,000 plus

                        2005         2006

# Sales                11           14         Increase


Highest Sale         $11.5M         $12M


Days on Mkt           404           375        Decrease

Prices have remained flat for last 3-4 years
           Statistics: CA & NV market
Difference Last 365 Days Sales v. Current Inventory
        Last 365 Days Sales v. Current Active      Percent Difference Sales v. Current Active
                                                160%
                                                                                  134.8%
  500     434
                 399                            120%
                                                             91.9%
  400
  300                                           80%

  200                                124        40%
                              92
  100
                                                 0%
    0    South Lake Tahoe       Stateline                South Lake Tahoe          Stateline




 More Supply than demand… and More Supply coming!
      Active Listings compared to current Escrow

           Difference List v. Escrow                      Percent Difference - List v. Escrow
500
         399
400
                                                  10.0%          9.8%
300
                                                   9.5%
200                            123
                                                                                        8.9%
100              39                    11
                                                   9.0%

  0
      South Lake Tahoe            Stateline        8.5%     South Lake Tahoe           Stateline




       13.3%
Nov 1, 7.9%                                           12.4%
                                              Feb 20, 8.9%
    Statistics: CA & NV market
Escrow Failure: (sales that fall apart)

         Normally it is about 3%

         We have a lot more escrow
         failure now!
        Listings that did not sell w/in list period: (Expireds)

        Number Expired Listings last 365 Days               Percent Difference Expireds
                                                               last 365 Days v. 2005
           South Lake Tahoe          Stateline
  800
                     622
                                                    1000%       852%
  600
                                                    800%
  400                                               600%
                                                    400%
  200
            73                               57                                      158%
                                  36                200%
    0                                                 0%
            2005     2006         2005       2006
                                                             South Lake Tahoe         Stateline




           633                     58
Increasingly, Over Priced Listings Do Not Sell at all!
 S. Lake Tahoe Mkt. Performance
                     (SFR – Last 365 Days)

  S. Lake Tahoe, CA Market Performance: Absorption Rates
LAKE TAHOE REAL ESTATE BLOG     365 days 180 days   90 days   30 days
Total Number Homes on Mkt:       1551     1012       662       512
Number Homes Sold:               434      203        80        22
Monthly Absorption Rate:         36.2     33.8       26.7      22.0
Current Homes Listed:            403      403        403       403
Current Months of Inventory:     11.1     11.9       15.1      18.3
Sell Odds in this time frame:   28.0%    20.1%      12.1%     4.3%
       Stateline Mkt. Performance
                     (SFR – Last 365 Days)
     Stateline, NV Market Performance: Absorption Rates
LAKE TAHOE REAL ESTATE BLOG     365 days 180 days   90 days   30 days
Total Number Homes on Mkt:       365       258       192       153
Number Homes Sold:                94       39         19        9
Monthly Absorption Rate:          7.8      6.5       6.3       9.0
Current Homes Listed:            121       121       121       121
Current Months of Inventory:     15.4     18.6       19.1      13.4
Sell Odds in this time frame:   25.8%    15.1%      9.9%      5.9%
      Carson City Mkt. Performance
                          (SFR – Last 365 Days)

    Carson City Market Performance: (SFR – 1yr, 6 mos, 90, 30 days)
                               365 days   180 days   90 days   30 days
Total Number Homes on Mkt:     1,498       881        612       473
Number Homes Sold:              474        192         92       34
Monthly Absorption Rate:        39.5       32.0       30.7     34.0
Current Homes Listed:           334        334        334       334
Current Inventory in Months:     8.5       10.4       10.9      9.8
Odds of a Home Selling:        31.6%      21.8%      15.0%     7.2%
Gardner/Minden Mkt. Performance
                          (SFR – Last 365 Days)

  Gardner/Minden Market Performance: (SFR – 1yr, 6 mos, 90, 30 days)
                               365 days   180 days   90 days   30 days
Total Number Homes on Mkt:     2,201      1,283      1,033      697
Number Homes Sold:              564        277        132       34
Monthly Absorption Rate:        47.0       46.2       44.0     34.0
Current Homes Listed:           630        630        630       630
Current Inventory in Months:    13.4       13.6       14.3     18.5
Odds of a Home Selling:        25.6%      21.6%      12.8%     4.9%
      Statistics: CA & NV market
Summary Market Conditions:

• Decline in demand
• Decline & flattening of Value
• Increase in Supply
• More Expireds
• Takes Longer to Sell (more DOM)
• More Escrows fail
Sidebar: Recent Sales Success Story
                  Owner paid: $116,000
                  Date: June 1987

                  Listed: $695,500
                  Date: Jun 29, 2006

                  Sold: $655,000
                  Date: Oct. 4, 2006

                  97 Days on Mkt.
    Al Tahoe

                     464% return
Owner made $539,000:
                     in 19 years
Sidebar: Recent Sales Success Story
                     Owner paid: $389,700
                     Date: Dec. 1993

                     Listed: $1,395,500
                     Date: Jul 14, 2006

                     Sold: $1,275,000
                     Date: Sep. 11, 2006

                     59 Days on Mkt.
   Upper Kingsbury
                     227% return
Owner made $885,300:
                     in 13 years
     Who actually Sells a House?
                            I’m the Best

I’m Agent of the Year!                         I Sell More




  I’m Number “1”
                              ME!                  My Numbers




        My Production                          I Sold more than Him

                         I Outsell Everybody

 The Agent-Centric business model.
  Where are YOU in this picture?
        The way it’s supposed to be:
                        You are Number “1”

    Your Instructions                        Your needs




  Your Expectations         YOU!                 Your time frame




         Your Service                        Your best interests

                           Your House
The “customer-centric” business model.
              YOU are the picture!
          What SOLD really means…
       SLT List Agent v Buyer Agent Sales                Stateline List v Buyer Agent Sales
                   2004 - 2006                                       2004 - 2006

100%          89%           88%             88%   100%       84%            85%               83%
                                                  80%

                                                  60%
50%
                                                                                      17%
                                                  40%
          11%          12%          12%                  16%           15%
                                                  20%

 0%                                                0%

           2004           2005          2006              2004            2005           2006


  Almost 9 out of every 10 Buyers comes from an Agent
               other than the Listing Agent.
What is The Role of the Listing Agent?
 If 90% of all Buyers have their own agent…

• Pricing Assistance – Seller sets price!
• Exposure:
   Protectors of Your Equity!
  - Marketing
  - Compelling package for other agents
 • Communication, feedback & updates

 • Negotiation: offer, repairs, all releases
  What it really takes to sell a House:



• Success comes from Agent and Seller working together as a team.
• Agent asks questions...   Seller indicates needs.
• Agent LISTENs carefully… gives Seller market Information.
• Seller gives instructions… Agent develops campaign.
• Agent gives frequent reports… and tells Seller everything.
• Team makes adjustments if needed… and House gets SOLD.
 What it takes for the Team to Work?

• Agent ability to listen
• Seller is motivated to Sell
• Seller / Buyer acceptance of market facts
• Constant communication
• Frequent Market review
• TRUST
           The Foundation of Trust
• INFORMATION

• All market facts are necessary:
  not just CMA

• Reported without agenda
                                    Information is King!
• Basis for all informed Selling
  and Buying decisions.
            The Best Agent for You?

• Is the best Agent one who recommends highest price?

• It is for Tom!

• The numbers are the numbers… there are no others.

• You should get the same data from every Agent.

• The market is the message… Agent is the messenger.
      What People look for in an Agent
1.    TRUST
2.    My Best Interests.
                                           All aspects of
3.    Agent who Listens.                   Trust.
4.    Honesty & Ethics.
5.    Effective Communication.
6.    Knowledge.
7.    Save Time.
8.    Reduce Stress.
9.    Delivery on Promises.
10.   Recovery – takes responsibility for mistakes.
 Source: Council Residential Specialists
         Important to Remember…

• Almost 90% of all Buyers have own Agent:
 - Buyers are informed
 - They have access to the market data too


• There are 2 different Successful Teams:
 - Seller & Agent
 - Buyer & Agent
   We are a Second Home Market

• About 65% of area Owners live elsewhere


• Most Buyers come from CA
 -- Sacramento, San Francisco, San Jose, Central Valley


• Florida, Texas, Mid-West
      Characteristics of 2nd Home Buyer
•   45 - 64 years old.
•   Income usually exceeds $200,000 a year
•   Married (82%)
•   Have no children under 18 living with them (71%)
•   Live in a suburb or subdivision (53%)
•   Buy to retire here, or for a family retreat (56%)
•   Buy for lake and outdoor recreation, rather than casinos (55% v. 4%)
•   Spend less than 3 months here a year (54%), not rent (86%)
•   Find investment and appreciation benefits important (92%)
•   Live within 200 miles (85%), and travel by automobile (88%)
* Source: 2006 National Association of REALTORS® Profile of Second-Home Buyers.
           Profile of 2nd Home Buyer
• Environment, Lifestyle, Image are the most important factors.
• Emotional decision maker - supported with logic.
• Buying decision takes 28 months (meet very late in buying cycle).
• Concerned about absentee owner issues.
• Want low maintenance & energy efficiency.
• Distance and transportation are a consideration.
• Influenced by family and friends.
• Over-qualified financially.
• Lack of urgency most of the time.
                 Where Buyers first learn about
                     the Home they BUY*
                                   1997        1999        2001        2003          2004   2005   2006
 Real Estate Agent                 50%         49%         48%         41%           38%    36%    36%
 Internet                          2%          4%          8%          11%           15%    24%    24%

 Yard Sign                         17%         15%         15%         16%           16%    15%    15%
 Friend or Relative                9%          8%          8%          7%            7%     7%     8%

 Home builder                      3%          4%          3%          7%            7%     7%     8%

 Print Newspaper ad                8%          8%          7%          7%            5%     5%     5%

 Home Book/Magazine                3%          3%          2%          1%            2%     1%     1%

* Source: 2006 National Association of REALTORS Profile of Home Buyers and Sellers
Buyers who find home they Buy on Internet:




• 1,200% increase from 1997 to 2005 • No increase last year.
* Source: 2006 National Association of REALTORS Profile of Home Buyers and Sellers
        Internet use to Search for Homes:




• Increasing every year in use… and frequency!
* Source: 2006 National Association of REALTORS Profile of Home Buyers and Sellers
                             Lets Say it Again…
• 80% of U.S. Buyers look first for a home
  on the internet.

• The internet is becoming the most
  important resource to expose a home.

• Buyer’s Agent is still most important
  information resource to a Buyer.
* Source: 2006 National Association of REALTORS Profile of Home Buyers and Sellers
           What Buyers Want in 2nd Home*
        Close to ocean / river / lake                                           67%

        Close to recreation / sporting activities                               39%

        Close to vacation / resort areas                                        38%

        Close to mountains / other natural attractions                          31%

        Close to family members                                                 19%

        Close to primary residence                                              13%

        Close to job or school                                                  6%

        Safer than where they live                                              4%
* Source: 2006 National Association of REALTORS Profile of Second Home Buyers
What 2nd Home Buyers Most Like to Do*
  Beach Lake Water Sports                                                             57%
                         Boating                                                38%
            Hunting / Fishing                                                   32%
     Biking / Hiking / Horse                                      20%
                              Golf                                21%
 Skiing / Winter recreation                                    17%
                           Tennis                               9%
                  Theme Parks                       6%
                       Gambling                    4%
* Source: 2006 National Association of REALTORS Profile of Second Home Buyers
       What Buyers are Buying
      What is Selling in Today’s Market?

• Good Value
• New or Newer Homes
• Homes that are particularly Unique
• Excellent Location
• Exceptional Condition / Remodeled
Most sales are a combination of these factors.
        Buying a house is an
         Emotional Decision

• “Good Value” is based on
  -- Perception
  -- Personal Need
  -- Market logic (the numbers)
    What most concerns Sellers?


• Price
• Time
• More recently: will my home sell at all?
    What most concerns Buyers?


• Did I pay too much?


• Did I miss anything?
    House Sales & Marketing Fact

• The Best Marketing in the world…

• The Best Agent in the world…

• Can not sell an unreasonably priced
  house!
         How to Sell a Home Fast

•   Price it reasonably
•   Get it pre-appraised
•   Get it pre-inspected
•   Make all repairs                     !
•   Int. & Ext. in excellent condition
•   Create inviting curb appeal
•   Agent marketing
  Why Get a Home Pre-Appraised?

• Certified, bankable document

• Check & Balance of market value

• Help better position house for sale

• Lenders will not lend above appraisal
• Emotionally involved in Selling… not
  an attachment to price.
  Why Get a Home Pre-Inspected?

• Eliminate surprises

• No need for second / repair negotiation

• Reduce incidence of Buyer remorse

• Reduce incidence of Escrow failure
How to Sell for the Highest Price
•   Set price at top of “reasonable” range
•   Preview all homes w/in price range
•   Understand current market absorption
•   Get best market information possible
•   Remodel & Update if cost effective
•   Pre-inspection
•   Make all repairs
   How to Buy for the Best Price
• Get all market information
• Preview all relevant homes in price range
• Understand current absorption rates
• Know difference of “list” and “Sold” prices
• Offer at bottom of “reasonable” range
• Be willing to “lose” house if price not
  accepted
Two Reasons why a House
      Fails to Sell:

  • Under Exposed

  • Over PRICED
      To best Price a House…
• Have an open mind

• Be unemotional

• Be analytical

• Look at price as buyer… and as seller

• When I bought my home, was I willing to
  pay more than market value for it?
Comparable Market Analysis (CMA)

• The Industry Standard – what most do.


• Most Agents present “your” comparables

• You must be part of comparable selection
  process.
What you need to best understand Price.
 • All Sales – last 365 days
 • All Escrow
 • All Active Listings

 •   Start “wide” with everything
 •   The neighborhood know it all
 •   Then “narrow”
Information Funnel!
 What goes into your information Funnel
• A Sales, all Escrow & all Listings:

• Spreadsheet workbook:

  •   Size (200 sq ft or less)
  •   Year built
  •   Garage (SLT)
  •   View and / or location
  •   Condition
    •    Your Neighborhood
        •   Size (200 sq ft or less)
        •   Year built
        •   Garage (SLT)
        •   View and / or location
        •   Condition

•       From this, relevant homes “emerge”…

•       And YOU participate in the process!
What Else You need to understand Price:

 • National Home Price Index

 • Absorption Rates

 • Value Graph
            Absorption Rates
• How many homes the market absorbs
  over time:
• 24 sales in 1 year is monthly absorption rate of 2.
• 6 sales in 3 months is monthly absorption rate of 2.

• 12 homes on market w/ monthly absorption rate of
  2 is inventory of 6 months.

• 24 homes on market w/ monthly absorption rate of
  2 is inventory of 12 months.
         Absorption Rates
• 6 months inventory is “neutral” market


• More than 6 months inventory is
  Buyer’s Market.


• Less than 6 months inventory is
  Seller’s Market.
          Absorption Rates

• Usually “best” home in a price range
  sells first

• Look at all homes in price range...


• Which one would you buy first?
          Absorption Rates
• To sell FAST, you want to have the
  most desirable home in it’s price
  range.
• Often it’s necessary to position a home
  in the next price range below…

• Especially in a Buyer’s market with
  more supply than demand.
           The Value Graph
A unique look at market value
 • Cluster chart done in excel

 • Intersection of price vs. size

 • Cluster represents most activity, or market
   acceptance

 • Where would You most want to be?
                                       The Value Graph
     • SLT Sales – 1,300 -1,450 sq ft – Jul 1 to present
                                                  SLT 2006 Sales - 1,300 - 1,450 Sq. Ft.

                           1500



                           1450



                           1400
   Size:                                                                                                                      Price:
              SQ FT Size




1,372 Sq Ft                1350                                                                                             $529,000
                           1300



                           1250
                            $300,000   $350,000   $400,000     $450,000    $500,000        $550,000   $600,000   $650,000

                                                                   Sales Price
                                  The Value Graph
     • SLT Active Listings – 1,300 -1,450 sq ft – a/o Oct 25
                                     SLT Active Listings - 1,300 - 1,450 Sq. Ft.

                     1500



                     1450


   Size:                                                                                                   Price:
              Size




                     1400
1,372 Sq Ft                                                                                              $529,000
                     1350



                     1300
                       $300,000   $350,000    $400,000   $450,000     $500,000     $550,000   $600,000
                                                         List Price
What if Value is less than you expect?

  The Change Process:
  • Denial
  • Anger
  • Sadness
  • Acceptance
  • Renewal & Action
What if Seller will not accept current
            Market Value?

• Don’t list it
• Does not increase inventory
• Wait for market to change upward
• If Seller wants to wait
What if Buyer will not accept current
           Market Value?
• Don’t offer on it

• Keeps inventory up

• Wait for prices to drop – or lose house

• What we are beginning to see now in SLT…

• Prices have come down slightly…

• Buyers eventually respond… and cycle starts anew
What if my house is priced right and it
          still doesn’t sell?

• Review all recent data frequently

• Wait
   My house is listed for $699,000…
But I can’t even get an offer for $550,000.

• Buyers do not normally feel comfortable making
  what they consider an offer that is too low…


• An Agent can not tell a Buyer to offer such a low price
  without your permission.


• Keeping the price up above the “reasonable” range
  drives Buyers to your competition.
What caused the Market to change?

• Poor Buyer Perception
• Resistance to High Prices
• Rise in Interest Rates (Fear Perception!)
• Lack of Consumer Confidence - Fear
• Discouraging National News
 What will cause Market to go up?

• Better Buyer Perception
• Better Prices
• Stable Interest Rates – Change in Fed
• Rise in Consumer Confidence
• Less local reports w/ agenda
• A lot better National News
 What to Look for when it starts to
             change?

• Increase in number Sales
• Increase in % of Escrow
• Increase in monthly absorption rate
• Decline in Escrow failure
• Decrease in inventory
 How long will it take for Market to
      return to where it was?
• Nobody Knows…

• If you meet someone who
  claims they know for sure…

• Run…

• Or start partnership…and market him!
  Because he can predict the future.
How will I know when The Market is
        starting to change?

• Ask an Agent you Trust…

• And Get all the Information!
                      Review:
•   House greatest asset.
•   Cadillac effort & responsibility…
•   From a professional… w/ credentials.
•   Hard work and truth.
•   Equity Preservation Experts
•   Credentials:
    • CRS         •    QSC           •   Design
    • ABR         •    $1M Guild     •   Copy
    • CLHMS       •    e-Pro         •   Web / Blog
    • SRES        •    Sr. VP Mktg   •   Photography
If you are thinking of Selling or Buying

                Call us:
             800.923.9022
             530.544.9022
             775.588.9022

     gary@thelistingcompany.com
   richard@thelistingcompany.com
            Questions?

Anything new?

Anything helpful?

Anything we missed?

								
To top