Lies, Damned Lies and Comparative Market Analyses

Part of the process in preparing a home for sale is to determine the price, of course. To help do this, I research the recent closed sales and active competitive listings. This is called a Competitive Market Analysis aka CMA.

When working on CMAs, I am always reminded of the old saying, "There are lies, damned lies and statistics." Sure, CMAs help guide us to find the right range when working with the seller to set a competitive price, but a lot of emotions play into the decision, too.

We want to see value in what we own and love--especially those things we are trying to sell. Our emotions are not always in sync with the market forces. We can easily assume more value based on our own experience with a home. We assume a higher perceived value from the improvements we have made. And, we all want a good story to tell...that our house got so many offers and broke the neighborhood sales record. And, sometimes we just need to net a higher amount than the market will bear.

It is in times likes these that I find it helps to drill down into those statistics in the MLS database. Often there are other defining features that guide prices which are not always easily apparent in the MLS.

One client I worked with could not abide the fact that their fabulous home was just half of one block into a less desirable school boundary. That particular dividing line meant a price difference of at least $50,000. (That other old saying--"Location, location location!")

In many neighborhoods, proximity to certain locations adds a lot of value. Here in Portland, many buyers want to be walking distance to New Seasons Market. There is no "New Seasons" field in our MLS, so we look at other homes close to a New Seasons location and see how much that affects price.

Also, here in Portland, an old oil tank for the heater can decrease value because they are so difficult and expensive to decommission, but it is not often easy to determine if there is one or not. Time to call out the folks with metal detectors to find out for sure.

A lot of research and statistics and little "going with your gut," and hopefully we land at a competitive price that makes the seller--and the market--happy.

Welcome to Beyond the Post

Well, as you can see from the text above and the text over there to the right (you know, by the big picture of me looking all Realtor-y), this is a blog about real estate. And it is a blog about Portland. So, Venn those two concepts together and most of the time it will be a blog about Portland real estate. And, sometimes it might be about a something I cooked up after the farmer's market, or a great movie I saw at the NW Film Center. We'll see. Check in once in awhile and see what is up. I will try hard not to post anything about the cats.

First things first. Preparing a new listing. I've been thinking a lot lately about how much goes in to getting a house ready for sale. Scratch that. I've been thinking about how much goes in to getting a home seller to actually choose you to be their Realtor. Believe me, a good agent will do a lot more than just tell you how much the commission is.

Some of the tasks I take on when preparing a listing include:
•Review and prepare comparable sales analysis
•Review and prepare comparable listings active in the market
•Research the average days on the market
•Obtain tax record and plat map information
•Research land use codes and deed restrictions
•Research current use and zoning
•Prepare marketing proposal
•Prepare a professional presentation with all of this information

Whew! Each of those could be its own posting. Any guesses on what I will write about next?

This is the detective work that I love about real estate. Are these topics you might like more information about regarding your own home? Let me know. I'd be happy to help.