HOW TO READ HOUSING MARKET STATISTICS
MEDIAN PRICE
An oft-cited indicator of the strength and direction of a housing market, a median price is the midpoint of all the prices of properties sold in a given area during a specified period.
SEASONALLY ADJUSTED
Housing markets are naturally more active in the spring and summer months because people prefer to move during the longer warmer days and between school years. Although in our Southern California marketplace, any time of the year is a good time to buy or sell real estate.
PRICE DISCOUNT
The "price discount" is the percentage difference between the seller's initial asking price and the actual purchase price of the property.
UNSOLD INVENTORY INDEX
This index, which indicates the pace of the market, is calculated by measuring how long it would take for all the properties currently on the market to be sold at the current rate of sales.
AFFORDABILITY INDEX
An affordability index measures whether a typical family can qualify for a standard mortgage to purchase a typical home. A "typical" family is defined as one that earns the median income in a given area, and a "typical" home is defined as a median-priced, single-family house in the same area.
SET YOUR SALES PRICE
PRICING CONSIDERATIONS
In setting the list price for your home, you should be aware of a buyer’s frame of mind. Consider the following pricing factors: If you set the price too high, your house won’t be picked for viewing, even though it may be much nicer than other homes on the street. If you price too low, you might have many more offers than you expect. Often, some of these offers will be for much higher than the asking price. Our current Southern California marketplace is a very efficient one: a property will only sell for the perceived value of a buyer and the realistic viewpoint of the seller.
USING COMPARABLE SALES
No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market. Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood like yours.
As your realtor I will prepare a Comparative Market Analysis of your property using current available data on similar properties listed, in escrow and sold. And, together, we will determine a realistic offering price on your property.
CONSIDER MARKET CONDITIONS
A Comparative Market Analysis (CMA) often includes Days on the Market (DOM) for each comparable property sold. As your realtor I will advise you on the type of Selling Environment you are in--i.e., a Seller's or Buyer's Market.
FACTS ABOUT APPRAISALS
An appraisal provides valuable information for the buyer and the seller, but the appraiser's primary mission is to protect the lender. Lenders don't enjoy owning overpriced property any more than they relish lending money to irresponsible borrowers--that's why the appraisal takes place before the lender grants final approval of the buyer's loan.
Appraisers weigh the location of the home, its proximity to desirable schools and other public facilities, the size of the lot, the size and condition of the home itself and recent sales prices of comparable properties, among other factors.
Appraisers aren't interested in dirty dishes or dusty dressers, but they do notice such signs of neglect as leaking roofs, cracked walls, chipped paint, broken windows, torn carpets, damage flooring and inoperable appliances.
Federal law requires states to establish minimum standards and licensing practices for real estate appraisers. In California, for example, trainees must take several courses, pass an examination and complete 2000 hours of supervised experience.
A transaction can sometimes survive a "low" appraisal, if the seller reduces the purchase price, the buyer makes a hefty down payment or a separate escrow account is set up to fund repairs that will increase the value of the home. On rare occasions, an appraiser will reconsider his or her opinion if new evidence supports a higher valuation.
BUYER'S OFFERS
WHAT IS AN ACCEPTABLE OFFER?
The goal of every seller is to have a line of buyers outside the front door, each clutching higher and higher offers. While this has been known to happen, in most markets there is some balance between the number of buyers and sellers. A number of factors determine whether a buyer's offer is acceptable. They include:
-Is the offer at or near the asking price? Is the offer above the asking price?
-Has the buyer accepted the asking price or something close? Has the buyer buried thousands of dollars in discounts and seller costs within tiny clauses and contract additions?
-What is the alternative to the buyer's offer? If a home has not attracted an offer in months, then sellers need to determine if a better deal is possible -- recognizing that each month that a property remains on the market, costs are being incurred for mortgage payments, taxes, insurance and upkeep.
-Does the owner have enough time to wait for other offers?
-What if no other offers are received?
-What if several offers are received? Do you choose the high offer from the purchaser with questionable finances who may not be able to close, or a somewhat lesser offer from a buyer with preapproved financing?
WHAT IS A COUNTEROFFER?
When a home is made available for sale, the owner is essentially making an offer to buyers: for a given number of dollars and other terms you can acquire this home. Buyers, in turn, can respond with several options:
-Not interested.
-Yes, we'll buy on the owner's terms.
-We're interested and here's our counteroffer.
In turn, the Seller can Counter the Buyer's Counter, and so it goes, until a deal is reached or both parties move on to other buyers or properties.
NEGOTIATION AND CLOSING THE DEAL
I will be there for you every step of the process. The business of real estate, "the art of negotiations," is often likened to a dance that occurs between an agent and principals. I will weave my years of real estate experience, business acumen, marketing and promotional capabilities into the rhythm of the deal and embrace your sale or purchase with my people and social skills.
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Realistically pricing your property will determine the length of time it will be on the market. The most activity and interest in your home occurs when it is initially offered to the market.
