Atlanta Housing Source

Paraphrased From a report by Lawrence Yun, Chief Economist, National Association of REALTORS®.

Good news in housing. Existing home sales rose 2.4 percent in May. Compared to the same month one year ago, existing home sales were down by 3.6 percent.

The national median existing home price in May was $173,000, which is a decline of 16.8 percent from one year ago. Lower prices are good news for potential buyer. Housing affordability is at the highest since 1970. A middle-income family now has more than sufficient income to buy a middle-priced home at current mortgage rates and stay well within family budget. From one year ago, inventory is lower by 15.3 percent.

The first-time buyers will be the key to help drive up sales. First-time home buyers accounted for 29 percent of all buyers based on a survey of REALTORS about their recent clients. It is a decline from the 40 to 50 percent range in recent prior months. With all the homebuyer tax credits in place on national and state levels, this is troubling.

On the bad side, eleventh hour fallout is occurring on contracts because appraisals are coming in with unrealistically low values. I have a buyer and a seller that made a deal at a mutually acceptable price, but the appraisal killed the deal. We challenged the appraiser as to the correctness of some of the data he used on one of his comparable property. We supplied our data, and his response was that the property we supplied data on didn’t qualify as a comparable. Alarming thing, he chose it as his first comparable, we only questioned the home square footage. I don’t even think he read his own report since he rejected his first comparable property.

More properties are being appraised by non-local specialists, being based on non-comparables. Appraisers are comparing normal homes against distressed homes that typically are in disrepair and many have significant damage. Lowball appraisals are opening up additional negotiations which is delaying the closing or leading to the cancellation of the contract. Lower appraisals also force the buyers to come up with extra cash to make up the difference between price and appraisal, which some buyers are unwilling to do, and again lead to a fallout. This issue is suddenly escalating.

As a homeowner or investor, when you are preparing a home for sale, you will naturally want to get the best price possible for your home. However, you will also need to price your home competitively, so it won’t languish on the market for months while other homes in the neighborhood sell quickly. How do you price your home to sell, while still making a profit on the sale?

The first thing you should do is look at the recent sales of comparable homes. This means not only homes in the same neighborhood, but also homes with similar characteristics – square footage, number of bedrooms and bathrooms, overall condition, and features such as decks, swimming pools, and finished basements.

Looking at sales of comparable homes will give you a good idea of what the market will bear. It will also help keep you from pricing your home too high or too low, which can make the sale of your home difficult. If it is priced too high, buyers will show little interest in the property; if it is priced too low, buyers may suspect that there is undisclosed damage or neglected repair.

Another way to price your home to sell is to look at homes that are currently for sale in your neighborhood. Again, you will want to compare the features of your home with those of similar homes, to make sure that you are getting an accurate price comparison.

If possible, it is a good idea to tour competing homes to get a true sense of what they can offer to a buyer. Are similar homes in your neighborhood in “move in” condition, or are they in need of repairs? Have there been recent updates to the homes, such as the replacement of cabinets, flooring, plumbing fixtures, or mechanicals? All of these items will affect the selling price of a home. If your home has features or updates that comparable homes don’t have, you may be able to justify a higher selling price.

We also recommend consulting a REALTOR or real estate agent to help you. They have a lot of information and tips for selling your home. A good real estate agent can provide your house with marketing and a wider exposure than you can do on your own. Find out more about what a REALTOR® can do for you.

When you are selling a home, determining your listing price is often as difficult as getting the home ready to put on the market. If you price your home too high, it will take a long time to sell; if you price it too low, you will be missing out on profit. So how do you find the correct price for your home, so you can make the most money in the shortest amount of time?

The key to determining your home’s selling price is looking at comparables. This involves researching homes that have recently sold in your area, and properties that have sold in similar neighborhoods.

First, you’ll need to find recently sold homes with characteristics similar to yours. The square footage of the home is important, and is one of the first things most buyers look at when considering a purchase. Search for homes that are as close as possible to the size of your home – ideally within 100 square feet.

You will also need to compare the number of bedrooms and bathrooms in your home with those of recently sold properties. The size of these rooms is as important as the number; a home with a large master bedroom will naturally sell for more than a similar home with average sized bedrooms.

There are also less obvious characteristics that you should compare. Decks, fireplaces, garden tubs, and other features affect the selling price, so if your home contains these features, it will bring a higher price than an otherwise comparable home.

Another characteristic that is often overlooked is the exterior of your home. The property’s value will be partially determined by whether the exterior is stucco, brick, aluminum, or vinyl. Also, consider the condition of the roof. If your home’s roof has been recently replaced, you can justify a price higher than a comparable home with a ten year old roof.

 Finally, consider the area around your home. Is the property near a park, school, or playground? All of these nearby features will place your home above other comparable homes in the area. Just make sure you highlight your home’s proximity to them when marketing your home for sale to prospective buyers.