price

Make Or Break. Home Price

Mario AvalosLeave a comment

the falls single family homeHome price. Like the concept of “truth”, its mainly in eye of the beholder.

So a gentleman from Amaretto, a Kendall community composed of single family homes, phoned me a few days ago asking for the value of his house. And I gave it to him…and it caught him off guard. What a surprise 😛

I told him that homes in Amaretto (as of 10/30/13) are more less going for in the low to mid $200,000(s) depending on the interior condition of the property and several other factors.

Then he asked, “how come other homes like in Westchester or Calusa are going for well over $300,000?”. I replied, “it’s mainly due to three factors:

  1. the garage
  2. lot size
  3. HOA or association

Believe it or not, in the area of Kendall as of 10/30/13, what makes or breaks the $250,000 (approximate) price mark for single family homes are these three factors.

In other words, if you home is located in a community that has an association. In a community where lot sizes are relatively small at less than 6,000 square feet. And such homes do not have a garage…then expect prices to be under $250,000.

Now…say you start adding a garage…that one item alone can put you in the mid $200,00s.  Add a larger lot…automatically you’re in the high $200,000s. No association? Starting ballpark price? $300,000. Off-course…adding these factors do not have to be in that order…but you get the point.

Who’s the lesser of the three evils…I would say the lot size. Most buyers I work with prefer to give up a larger lot size in order to find a home with at least a 1-car garage and preferably with no home owner’s association. What’s your preference?

Disclaimer. Disclaimer. Disclaimer. The above is a rule of thumb or a good approximation of how prices are looking in today’s Kendall market. Am not an attorney so I won’t complicate this. Want to know the precise value of your home?

Contact me.

Want to have a ballpark idea of your home’s value…re-read this post or you can also Contact me.

Submitting Offers Without Success?

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Despite the media hype about the overflow of real estate homes, buying a foreclosure in today’s market can be complicated. Without the right advice and guidance, buyers often become de-motivated, fed up and tired of submitting offers to countless foreclosures. Here is my simple tip for increasing your chances of scoring a good foreclosed home…submit an offer above asking price….higher….higher!

Why? REO sellers price their properties below market value. This is a tactic utilized to lure in as many buyers as possible offers, house, successfull, bid, bidding, closedinto a deal at the same. The lower the price, the more people find out about the property.

The more people find out about the property, emotions run wilder. And the more wild emotions get…the higher offer amounts people submit relative to the asking price. Off course…there is no need to submit offers above fair market value, but definitely above asking price. It is very usual to see 4, 5, 8, or even 10 offers on a particular property.

In addition, knowing what terms (non- price related) should accompany an offer is key to a successful bid. Say you are financing a deal, yet we know we are competing against cash offers. Well, cash offers mainly have two contingencies that protect them (which is why sellers prefer cash as opposed to financing where you may have at least 5 or 6 contingencies that protect the buyer)…the inspection period and clean title.

For a buyer that is financing a deal, your inspection, appraisal, title, letter of commitment and so on…must be super aggressive in order to entice the seller to choose your offer over the cash deal. It’s tough, but doable.

Home Pricing 101

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custom made mailboxBuyers determine value by what’s called comparison shopping. In essence, buyers look at two prime elements when shopping  for a property:

  1. Value…or particulars a home offers a buyer such as a having or not having a pool, tiled roof, hurricane shutters, etc…and
  2. Price

Then, a buyers compares these two elements against other similar properties in the immediate neighborhood to make a decision what gives them the most value for the price.  Hiring the right agent to assess the value of  a property is pivotal, perhaps even more than advertising and client service.  Not having the right price on a home can mean the difference between a property selling in 30 to 60 days as opposed to not selling at all.

Keep in mind that pricing a home is an art. There is no formula. So…during a listing presentation, ask your agent…”how do you calculate the price”. If it makes sense, hire them. if it does not, move on. If the logic makes sense, great. If it does not…ask questions. An agent that knows what they are doing will answer all your questions with confidence and ease regardless of how much you may or may not like what you are listening too.

Yes…look out for confidence and ease. Why? The price of your home is created by market forces, not an agent. If we had that kind of power, we would be sipping margaritas in Tahiti on our private island. Since we have no control over price, we are merely the messengers of this data.

And because of this notion, there is no reason why a real estate should not be confident and at ease when delivering the price.  Any lack of the latter means two things: the agent is not telling the truth in order to get the listing OR they are not sure how they derived your home price.

Prices Up. Show Me The Money!

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budildings in kendall

A combination of almost no available inventory due to sellers holding on to the fence and foreclosed homes not hitting the market at expected rates is creating a nice upward price-ride for home sellers. Price a property 5% to 10% above fair market value based on sold comparable during last 6 months and it will sell. Obviously, choosing the comps are key to determining the correct floor to set the price. So…if there no inventory, buyers are getting loans and have the cash to close them…where’s the bump in the road?  Appraisals.

Appraisals continue to be the itch in a healing wound. If they was only a science to calculating price across the board, life would rock. But it’s not a science. Unfortunately its an art. Yes…Zillow is good at getting close to giving an idea of what is a house is worth, but not great. Mind you…I am a fan of them. But this is not about Zillow or the appraisers. This is about an industry that is picking up at a pace no one ever saw coming.

Critics. Say what you want. This is a phase. This is temporary. Who cares. Even if it is. Its a step int the right direction. Its positive news. And we will take it any day of the week. Based on numbers, I don’t think this is temporary. At least not in Miami Dade County considering that at this point in time there is only a 4-month supply of inventory across single family homes, townhouses and condos. Yes. Condos. I know. I can’t believe it either. Don’t believe me? Put you property for sale at the right price (just for cracks and giggles), and you will see offers (plural) lining out the door. And that goes for ugly homes too.