November 7th, 2005
In the last few weeks I’ve been dealing with quite a few situations in which I’ve been called upon to recommend a listing price for a home. This is not shocking; it is, of course, a large part of my job. However, because I entered the real estate biz at such an unusually high activity point in the market, I am now still really getting a handle on the ins and outs of pricing a house in a more ‘normal’ market. Let me tell you, it’s not a simple thing.
As a home owner thinking about selling your home, I think it’s important to understand that pricing your home is more of an art than a science. First you have to think about what is most important to you in the situation. Are you in a position where you need as much money as you can get from the house, but have flexibility with your moving schedule? Do you need to get out of the house as quickly as possible and can afford to get a little bit less? Most likely you are somewhere in between. You have some time constraints and would like to get as much out of the house as is comfortably possible. This is where a sliding scale starts to come into play.
When someone wants to talk to me about maybe selling their home, I put together what’s called a CMA (comparative market analysis). Basically, I start by running a search on the subdivision the house is in on the MLS (multiple listing system). I look for houses that have sold or are pending sale in the last six months that are similar to the house I’m trying to price. If I’m lucky I will find four or five properties within the subdivision that have sold recently and are very similar on paper to the house I’m trying to price. If I’m unlucky, I will have to go outside of the subdivision, but within a mile of the subject property to find comparable properties. Either way, ultimately I will end up with an approximate range of where to sell the house. This process is usually done before I’ve actually seen the house, so the actual condition of the house is something that will be used to figure the listing price. We then will take into consideration the things I mentioned earlier, time and financial needs. All of these things will go into determining a price for a house. And as you can tell, most of them are quite subjective.
A last hurdle is, of course, the appraisal. The appraisal may happen after the house is already under contract, but it’s important to keep it in mind through the entire process. Your leeway in pricing only extends as far as the house will appraise. If you can’t get it to appraise for what you’ve sold it for, you have a big problem. This is why we always need to stick to the comps and stay within the range, unless the buyer is willing to waive the appraisal. But, that is a different story for another time.
It’s not vital that the seller understand every detail of pricing their home, but it’s good to have a general picture of the process. Sometimes I wish it WAS a science.
November 4th, 2005
Well, the good news is that the Newlin family has officially survived the flu. Jason and I did end up getting it and boy oh boy was it not fun. We all did live through it, however, and right now, that’s about the most positive thing I can come up with about the experience.
On the real estate side of life, everything is going very well. My good friend’s house sale is moving along very smoothly as is the purchase of her new house. I really think they are going to like living there. She and her husband love to entertain and it really has much better space for entertaining.
I’m also currently working on a CMA (comparative market analysis) for a townhouse in West Mesa and looking for a condo in Scottsdale for a new client. Maybe I’m crazy, but I LOVE being busy.
Because of the flu, I did not attend my weekly sales meeting yesterday, but I’ve been meaning to share this bit of info from last week’s meeting: The current FHA loan amount limit is at $237,500 with a minimum of 3% down that can be gifted. FHA is an excellent loan program for first time buyers with not much cash. At that loan limit, you can definitely find a nice starter home in the Phoenix Metro area. If this sounds like something you’d be interested in, contact me or ask your mortgage broker for more info on FHA loans.
Lastly, I’m getting closer to finishing a pretty scarf my backtacker partner sent me the yarn and pattern for. I’m LOVING it so far. It’s my first project that I’m keeping for myself.
I hope you all have happy weekends!
November 1st, 2005
We’ve got the flu here at my house (you thought this was finally going to be real estate related, didn’t you? Well you were wrong). Boy oh boy is the flu my least favorite of the afflictions my kids have picked up. It started with Gray (my little guy) waking up yesterday throwing up. He continued to throw up every 15 minutes or so, even when there was nothing left in his little tummy. It subsided about 5 hours and 10 outfits (among Jason, Gray and me) later. Ben seemed fine, and even made it through trick or treating last night, but a call from the nurse’s office this morning wasn’t totally shocking. I feel bad for the custodian who had to clean up his Fruit Loop puke from the table in his classroom. I also felt bad for my poor guy when I walked in to find him looking quite gray in the face seated on the nurse’s bench.
Fortunately for us all, this seems to be a short lived virus, just a day or so. Not, of course, short enough for me. After Ben got up from his nap and said he was feeling much better, I was hoping I’d seen the backside of the throwing up. When he said, “I feel weird,” I answered a bit flippantly, “Not like, ‘I’m going to throw up weird’ right?” and with my back to him, only to turn and see him doing just that all over the couch and carpet. Sigh. Note to self: Non sequiturs in sick children are often precursors to puke. (There’s a notorious story in my family of when I was three and came into my parents’ bedroom early in the morning to say, “Mommy, my feet are hot,” and then puke all over their water-bed.)
Here’s hoping there’s no flu at your house.
