Whenever a person sells anything, they hope to get the highest price possible for the item. This obviously applies when a homeowner sells their house. In many cases their home is the largest investment they have ever made and hope to get the highest possible return on that investment. For that reason, they will want to see that you can give them the right advice in order for them to get them ‘the best price possible’.
A COMPETITIVE MARKET ANALYSIS (CMA)
Be prepared to share with the seller the completed sales of houses similar to theirs that have taken place in the last 90 days. Also share with them their current competition: homes similar to theirs that are now on the market and will be attracting the same purchasers.
AN UNDERSTANDING OF THE SUPPLY & DEMAND THEORY
The price of anything is determined by the supply of that item in relationship to the demand for that item. The direction the value of houses in a marketplace is headed can be determined by this principle. Here is a good guideline:
1-4 months available inventory identifies a sellers’ market with prices probably appreciating
5-6 months available inventory depicts a normal market with stable prices
7+ months available inventory identifies a buyers’ market with prices probably depreciating
INSIGHTS INTO WHAT MAY IMPACT PRICES IN THE NEXT 6 MONTHS
The volatility of a market can often be foreseen by examining the underlying data points that may influence prices in the future.
(For example, if an area has a large percentage of homeowners 90 days behind in their mortgage payment, there is a good possibility that foreclosures will begin to increase in the region. An increase in distressed properties usually results in a decrease in home values.) Insights like this should be shared with the homeowner.
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