Just off the top of your head, Ms. Realtor what do you tell me what my house is worth? This is a question that so many people ask. Here is the answer. How can I know what a house is worth off the top of my head? An asset that is worth several hundreds of thousands of dollars or more can just be evaluated in an instant?
The fact that an appraiser comes out and measures your house takes photos inside and out. Then often a lengthy evaluation report of data is completed and a narrative study about the market. The appraiser uses the subject property and interprets data with comparable sales, upgrades and improvements. Other factors can be deferred maintenance and neighborhood factors. If an appraiser is doing 6 appraisals a week, then an appraisal can take 8 hours to complete.
Over improvement in a home can also be a negative factor. A seller looks at how much money they have invested. The problem is this if in an area the highest sale is $ 499,000. The 2500 square footage is the highest and the subject is larger with many upgrades. Then the owner feels the extra square footage should be priced at the overall square foot price.
The upgrades and improvements should conform to the area. The extra footage is not generally calculated that way. The extra footage may be about $75 per foot; this is what I have seen in the last 3 appraisals. This $75 is an estimate only as it could be lower or higher. If the most expensive property in an area is 3000 square foot and the subject is 4000 square foot that extra 1000 feet may be priced lower than the 3000 per square foot price example.
The idea here is to be concerned of anyone tells you they can give you an instant evaluation value. Some online services give an instant analysis however that evaluation is often off by quite a bit. Always ask to see the actual evaluation worksheets. Just off the top of your head, what do you think my house is worth? Ok, I can’t give you an accurate professional answer.
- – JaCi Wallace
CMA’s – Comparative Market Analysis for Sellers. This is an article written by Elizabeth previously, for another website. She breaks this term down beautifully for a reader. I notice lots of agents say “CMA” when talking with clients. This sounds as though everyone understands our slang terminology. You will understand what a CMA is about after you read this article,
Enjoy, — JaCi
“I don’t always prepare a full-blown CMA package for listing presentations. Sometimes, the seller already has a handle on the market and knows what is for sale and which homes have sold. Besides, for sophisticated sellers, they really don’t need to read all that miscellaneous data that often accompanies CMAs. For them, I print out a portrait CMA that shows the last six months of activity, including current inventory, days on market and median prices. Print and go.
Because that’s what lots of sellers want to know, coupled with how much extra value they believe that new roof should bring. For sellers who want a clear a picture of the trends in their market, it is the pending sales that predict which way the market is moving.
Sometimes the comparable sales are too old because the market is moving too quickly. And active listings are important only to the extent that they present competition. Not to mention, those prices can be all over the board and meaningless, regardless of how often a seller may point to the neighbor’s McMansion and want to list at a higher price for their 1,000 square-foot bungalow.
What Is a Comparative Market Analysis?
Although reports can vary, from a two-page list of comparable home sales to a 50-page comprehensive guide, the length and complexity of the report depends on the agent’s business practice. However, standard comparative market analysis reports tend to contain the following data:
Off-Market / Withdrawn / Canceled: “
— Elizabeth Weintraub
Sacramento Realtors like me can make a strong argument for anything, including why the missionary position might be preferred by more doctors 5 to 1. I’m certain to offend somebody somewhere on the internet today, by talking about positioning. It’s incredible what people find to get riled up about. Some of them send me mean, snippy little emails, when I write a completely tongue-in-cheek blog. They don’t get it.
Like last week I wrote a blog about hearing aids and where the microphone is located on your cellphone. It was a light-hearted blog, mostly poking fun at myself and how I stuffed soda straws into my ear as a kid. Some old fart like me — I presume he was an old fart because I talked about how 80% of 80-year-olds can’t hear a thing — blasted me. He was pretty ticked off. He told me to stop using hearing aids to sell houses. But if I could actually use hearing aids to sell houses, you betcha I’d do it. Sorry, old fart.
The missionary position I’d like to discuss today has nothing to do with what you might be imagining. I consider myself a missionary of Sacramento real estate. It is my religion. I am pretty much consumed by it. Even while on vacation to see the butterflies in Mexico last week, I pondered how to get my sellers another two weeks in escrow because the construction of their new home was delayed. Constantly thinking, analyzing. I created a solution.
One thing I do all of the time is relentlessly study the comparable sales for my listings. I don’t always remember to share the results of the analysis with my sellers, my bad, but I got into a discussion about it recently. The seller wanted to reduce the price, and I cautioned against it. She was positioned beautifully.
I could see why she considered a price reduction. She was in a hurry to sell, and owned a somewhat unique home. Agent after agent sent buyer feedback that mentioned their buyers had made an offer on another property. That’s excellent news to me! You know why? Because it’s one less competing home in inventory. When every home within a mile goes pending, and you’ve got the only home left on the market, your home will sell.
Which is not difficult in our present Sacramento real estate market. Comps are one thing but you’d be a fool not to consider the missionary position. Look at the value, the price per square foot, and how many homes are selling for less. If there is none, you’re in like flint. Sure enough, my seller’s home popped into escrow at list price. Happens time and time again.
Home sellers in Sacramento often ask me how much is my home worth when that’s not really what they want to know. They want to know how much will their home sell for, and that could be two very different numbers. On the other hand, they might want to know if they can do a short sale, in which case the answer is always, without fail: the price will be market value, based on comparable sales, providing the seller qualifies.
It’s not the sellers’ fault. Sacramento real estate can be a big confusing can o’ worms. I imagine sellers hear all kinds of crap from neighbors, coworkers, relatives and others whom, even though they might have actually sold a home or two, haven’t worked with an agent who works the way the one in front of you does.
People think it’s OK to hit up an agent for a sales price. Why do they think it? Because real estate agents have encouraged them to behave in that manner. Why else, we think, would anybody ever want to talk to us unless it’s to find out how much their home is worth — its market value? We’ll give them a free Comparative Market Analysis. Free, because it’s not worth anything.
Before I was licensed, I dismissed agents from the possibility of listing my home because they lowballed me on market value. At least that’s what I thought. Because I didn’t really understand how market value is determined. You can’t just give an agent your address and expect that person to name an accurate number. Maybe a range. Not a precise sales price.
I wouldn’t even give my next-door neighbor a sales price without completing an in-depth analysis of his features and studying the past 3 months of sales as they pertain to his home, and I live next door to him. I also sell hundreds of homes. I should know, right? Because I am a Sacramento real estate agent, I keep pretty close tabs on what my own home is worth, but I couldn’t give you an exact number on my house — even if you stuck burning toothpicks under my fingernails and sang horrible 1980’s songs out loud — without an analysis.
Agents who do might short change. I’m not one of those.