First off, what is a Market Analysis?
A Market Analysis is a tool used to help guide you when deciding on a price to list your home. Your List Price. A Market Analysis will use similar homes in your neighborhood that are currently on the market, pending (have a contract on them but have yet to close) and recent Sales. In the past, recent Sales could go back 6-12 months to justify a price. Today? Not so. Lenders are now requiring (in most cases) Sold homes used in a Market Analysis to be no more than 90 days. What if there are no sales in your neighborhood in the past 90 days? Should that be the case, several other factors come into play.
- A comparison of recent activity for List Price to Sales Price ratios must be looked at. What was the List Price of the home and what was the ultimate Sales Price of the home? Were there any concessions offered to the buyer such as Closing Costs, etc?
- A more in-depth look at current homes on the market in your neighborhood will be looked at. DOM (Days on Market) will be analyzed. Have the homes been listed for less than 90 days? 180 days? Over a year? This is considered a "time on market" adjustment.
Years ago if there was a Foreclosure in your neighborhood mixed in with Fair Market sales you could somewhat discount that foreclosure in your equation. Unfortunately, today's market has many more foreclosures and, more than likely, they will need to be factored in when doing a Market Analysis. While that may be quite disheartening to you as a seller it is what is happening. You must keep in mind that if a buyer is faced with 5 homes for sale in a neighborhood and 3 of those 5 are foreclosures, chances are they are priced much lower than the Fair Market homes. That is your competition.
A Market Analysis has become a much more complex method in deriving a house value than in years past. If you are thinking of placing your home on the market in this soft environment it is in your best interest to hire a professional that will prepare a solid Market Analysis and continually update that Market Analysis while your home is on the market. Remember, if you receive an offer that is below your asking price and you have a professional, thoroughly prepared, and concise Market Analysis you will be in a better position to defend your asking price and more educated to negotiate.
There are many Wake Forest NC Homes for Sale so education is key when it comes to pricing your home!
Should you have any questions about your neighborhood activity or if you are considering putting your home on the market and would be interested in a FREE CMA (Comparative Market Analysis) I would be happy to help you navigate the process. Please feel free to call me at 919.649.6128 or simply send me an email!