Post-License Ch.4 Summary Notes
Highest and Best Use – a property’s value is directly affected by how it’s being used.
· Physically possible
- Legally allowable
- Marketplace demand
- Creates the highest possible property value
Conformity – In a neighborhood, homes that are similar in size and style will be of higher value.
Increasing and Diminishing Returns – When an improvement increases property value, it’s an increasing return. If an improvement adds no value, it’s a diminishing return.
Supply and Demand – The law of supply and demand is as applicable to the housing market as to any other commercial market.
Competition – This is similar to supply and demand, but gets more specific.
Future Value Expectations – If a house can generally be expected to increase in value, it can be listed at a higher price than if its value is expected to diminish or even remain the same.
When you set a listing appointment, get some general information about the house so that you can determine an accurate fair market value.
- Getting basic information will help you find comparable homes already on the mark
- Drive by the home and view its exterior condition, the neighborhood it’s in, and how many other homes in the area are currently on the mark
- Upgrades and improvements could significantly affect the way you price a home
Comparative Market Analysis
Introduction – page one should give a brief overview of the CMA’s components. The second page should give a brief overview of you and your company.
Technically, you can make adjustments for any difference, but the more similar homes are, the more reliable your suggested list price.
- For Sales – Show your client who and what he’ll be competing against
- Solds – Show your client what buyers think is a fair price for similar homes
- Expireds – Show your client that homes don’t sell if there isn’t perceived valu
Summaries by Type and Summary of List Price vs. Sale Price are two of the most beneficial summaries. The Seller’s Net Sheet is a one-page breakdown of the estimated monies a seller will walk away with once the
home is sold and all commissions and fees have been paid.
- It’s based your suggested listing price and includes things like title insurance, closing and recording fees, payoff of the current mortgage, and your commission.
- You’ll need some information, like the mortgage payoff, from the sellers.
Benefits of Hiring a Real Estate Agent
- Security is one of the best benefits you offer your client
- You can also get better exposure for the home
- You should point out that legal issues surrounding real estate are complex, as is the paperwork.
- Tell clients how often you intend to hold open houses, on what days, and during what times.
- If your company conducts office tours, include that in your marketing plan.
- Dedicate a section Internet marketing – company web site, your personal web site and e-newsletter
Ways to Increase the Sale-ability of the Home
- Clean the home thoroughly, both inside and out
- Pay close attention to the windows, especially if the sellers have children
- Fix broken shutters, clean spots off the driveway; keep the lawn and bushes trimmed.
Creative Problem Solving
- You might need to narrow your search
- You will experience seasons during which houses won’t move very quickly.
- Sometimes pricing a property to sell and pricing it to make the seller happy are two different things.