1-Losing the property
3-Paying too much
If you are the buyer and you see a property that seems to fit everything you’re looking for, your first thought may be, “I hope I can get this property before someone else does.” This is usually followed by the thought that maybe you have not seen everything on the market, and you could potentially miss something that could be even better. Your next thought may be am I paying too much for this property?
The best way to get clear about these questions is to go through a buyer interview. Your agent will explain to you how to select properties to see. There will be a series of questions that will have a funnel affect for all the homes for sale. With each criteria you state that is important to you, homes will be eliminated. For example; if a certain school district is important to you, all homes outside that district will be eliminated.
Your agent will give you peace of mind about the price you pay for the property by showing you all the homes that have sold in that area over the past twelve months.
Once you can see that you started with the total market and eliminated properties based on your needs and price range, and that your agent will show you the sold properties in the area you like, peace of mind should follow.
When it is clear to you that you have not missed anything, and you’re not paying too much, the next step will be a move to the home that best meets the needs of your family.
Aldridge & Southerland agents are trained to ask you questions that will help you see the process clearly.
Curious about market activity in The Greenville NC – Pitt County market? Closed sales are an indicator of market activity 30-60 days earlier in terms of contracts written.
We are seeing the first signs of market revival. Here are the sales through the Greenville-Pitt multiple listing services.
Jan – Feb closed sales are up over the previous four years. These show that market activity increased in November and December of 2012. These are the first signs of a market improving and housing prices starting to rebound.
Let’s look at the stats.
Jan & Feb closed sales by year.
2013 – 36.7 Million
2012 – 23.5 Million
2011 – 28.5 Million
2010 – 30.7 Million
2009 – 24.9 Million
There is a 36% increase in closed sales over the average of the past 4 years. The market in changing and prices will finally start to increase as demand rises. Great news for sellers! For buyers, this could be the perfect time to get into the market.
When you put your home on the market for sale, your realtor may discuss absorption rates with you. Here is a simple explanation of the absorption rate.
Currently in The Greenville Pitt County real estate market there are 101 properties for sale in the $160,000 – $180,000 price range. In the past 12 months in this price range 133 homes have sold. This tells us that there are 101 for sale, and 11 sales a month (133/12=11)
What does this absorption rate information tell you as a seller in this market? Let’s assume you have a home on the market priced at $175,000. In this price range you are competing with 101 properties, with 11 of these selling each month, and of course, with other homes constantly coming on the market.
What will you need to do to win? Be in the top 11 out of 101 in terms of price, location, and condition. How do you achieve this? Ask your realtor to show you the homes on the market you are competing with. Agents in our office would sit down with you in a conference area and show you exterior and interior pictures of the competing homes on a flat screen TV. You just need to be open to seeing your home as a commodity that competes with other homes instead of a home with family memories. Take it from me, that is not always the easiest thing to do.
What questions should you ask your real estate agent before putting your house on the market with them? The following questions could help you get started.
Can you give me references?
What are market trends in my area?
What will be the steps involved in putting my house on the market?
Do you use a home stager?
Do you recommend a home inspection before marketing?
How will the agents in your office see my house?
What is the market share through MLS for your office?
Can you show me the volume of buyers closed in your office last year?
Describe your marketing plan?
How many hits a month do you receive on your website?
Describe your advertising program.
Explain how your fee will be split with the selling agency.
With these answers, you should have an idea of the activity associated with that real estate office. For a comparison of how Aldridge & Southerland is doing, go to http://www.aldridgeandsoutherland.com/seller-advantage on our site.
Should I use the tax value of my property to determine market value?
The short answer is no. The tax office will use formulas based on age, size of property, and location to determine the tax value. The formulas cannot be specific to a particular property, so often tax value are higher or lower than true market value. The formula can miss on several important factors that actually determine market value. Some of these are the following.
- Location – How active in terms of homes sold is this subdivision? How many houses are for sale in this area? How many have sold there in the past six months.
- Condition – If an older house, 20+ years have updates been made to the interior? Kitchen or baths? Is the roof original? Has heating and air conditioning been replaced? A small older property with a totally remodeled interior will have a higher market value than tax value.
- Floor plan – Does the floor plan compete with new houses? Often a term appraiser’s call functional obsolescence will come into play. A property may have more size than a newer home, but the floor plan does not appeal to today’s buyers. Example: living room and family room. Often the extra space, although important in a “tax appraisal”, does not increase value in the market.
The only way to clearly see your value is to compare your property to current sales, and competing homes to see where your house should be placed in the market. This can easily be accomplished in our office. You will be able to see on a large screen TV in comfort the interiors and exteriors of houses sold and for sale. This will show you where your home should be priced. After all, it is your home, and your decision.
The average interest rate for a home mortgage over the past 30 years is 8.44%. The rate today is 3.6%. How do these compare? Let’s look at the monthly payment for $200,000 today at 3.6%. The principle and interest payment for a 30 year loan is $909.29 monthly. With the average rate over the past 30 years, 8.44% a home buyer making a payment of $909.29 could only borrow $118,900. The low rates have given home buyers today so much more in terms of buying power.
Trust Your Source
There are many pieces of information at the disposal of today’s real estate consumer including tools designed to estimate the value of residential properties.
The most widely used and perhaps the most misunderstood valuation tool is Zillow’s Zestimate. Real Estate owners often use this tool to both estimate the value of their property and to set the listing price when it is time to sell. Prospective buyers use the Zestimate when making offers on properties that are for sale.
But how accurate is the Zestimate? Zillow measures the Zestimate against the actual sales price in their top 30 markets. In these top 30 markets, the Zestimate is within 1o percent of the actual sales prices roughly 55 percent of the time, meaning 45 percent of the time it is more than 10 percent off. For example, a home with an actual market value of $300,0000 has a 45 percent chance of having a Zestimate over $330,000 or under $270,000.
Zillow’s Zestimate is fun and interesting. It is perhaps useful to track trends in the market. It should NOT be used as the sole method of valuing a property.
Question: Does my tax value reflect true market value?
Answer: In most cases NO! In fact over the past year homes that sold for an average of $350,000 had an average tax value of $400,000
When do homes go on the market in Greenville, NC & Pitt County?
In the past 12 months through the Greenville Pitt MLS system, homes go on the market more often in the first 6 months of the year.
This chart shows the percentage of homes placed on the market in the past 12 months through Greenville Pitt MLS.
1st Quarter Jan – Mar 29%
2nd Quarter Apr – June 30%
3rd Quarter July – Sept 23%
4th Quarter Oct – Dec 18%
59% of homes go on the market in the first 6 months of the year, with 41% going on the market the last 6 months.
What does this mean to buyers?
Chances are the selection will be large in the Spring, but as we approach Thanksgiving and Christmas the seller may be more willing to negotiate.
When do homes go under contract in the Greenville NC Pitt County MLS?
In the past 12 months, the majority of homes go under contract during the first 6 months of the year.
This chart shows the percentage of homes that went under contract in the past 12 months through the Greenville NC Pitt County MLS.
1st Quarter Jan – March 26%
2nd Quarter Apr – June 33%
3rd Quarter July – Sept 26%
4th Quarter Oct – Dec 18%
59% of the homes went under contract in the first 6 months. There is more to choose from, and the flowers are blooming.
41% went under contract in the past 6 months.
Notice that only 18% of the sales happened Oct-Dec. This may be the time of year to get your best price.
Greenville NC Pitt County MLS sales for the past three years, 2009, 2010 and 2011, reveal a trend. The highest percentage of homes closed in the 2nd quarter of the year. (April, May, June) For these homes to close during this time, the contract was written 30-45 days before the closing. This reveals that the majority of contracts to purchase are written in the Greenville NC Pitt County MLS during the months of March, April, and May.
Average percentage of closed sales by quarter for the past three years reveals the following.
% Closed sales by quarter – Greenville NC Pitt County MLS
1st – 18.6% – Jan, Feb, March
2nd – 32% – April, May, June
3rd – 26% – July, Aug, September
4th – 23% – Oct, Nov, Dec
For a home seller, this would mean the best chance of selling your home for the highest price would be to put it on the market in February or March of the year.
For a buyer, the best time to get a better price would be to purchase November – January.