When I determining your Real Estate Home Value I use 4 tools. I start with the Market Intelligence Report and Market Price Report for your review. The next step we need to check what homes sold for in the Multiple Listing Service and factor in the Market Analysis using the Price Driven Approach. Lastly we look at a comprehensive real estate market data and analytics through RPR (Realtor Property Resource). This report relies on the data from homes sold in your neighborhood and surrounding area. Next, we look at the Value Driven Approach and Appraisal Rules. Appraiser will change the formula on pricing based on condition and improvements. Keep in mind, most Real Estate Agents don’t use this approach. I’ve been to seminars as agents didn’t know there was a condition rating system or a 2nd underwriting system to verify the information is true. Most agent will just use the Multiple Listing Service to check prices, that’s it. All the homes to them are alike and there is nothing special about your’s….really? Keep in mind, pricing is NOT the most important piece to the puzzle. The most import piece is doing right Marketing and Advertising on several different platforms, so you don’t leave money on the table.
Price Driven Approach
I was watching a documentary on Warren Buffett and his approach to business. Seeing he is in the Real Estate Brokerage business, I was curious and watched. Throughout the documentary, he had the same message…” Price is what you pay, Value is what you get”
Have you ever wondered why your house must sell for what your neighbor’s house down the street sold for? You see, this is what I call Price Driven Approach. This approach where agents base what you can sell or profit from your home on a fixed priced based on “other” homes. To me this is an inferior and outdated approach. Most Realtor use this approach when they discuss the price, what they would list the property for. Yes, there has been a lot of changes with appraisal rules. An appraiser can use the following to name a few improvements to add VALUE; Roof, Windows, Kitchen, Bath(s), mechanical, finished Basements, lot size, garage size and location. (Link to Appraisal changes)
No two homes are EXACTLY the same. There are two parts to Value.
Part one – Looking at the property through the eyes of an appraiser. What information will they need to decide the condition rating of the property. (You can download the report from above) What does your home have the other homes didn’t that can add value. Is the basement finished, basement full bath vs half bath or no bath at all, has the following been updated; kitchen, baths, windows, roof, and mechanical.
Part Two – What value does the buyers see.
Does the home has everything they are looking and is it move in condition for them? Each buyer is different , and that’s why I strategically place my client’s property to stand out over the competition. I do this based on the highest level of marketing on multiple platforms and by hitting emotional triggers with perspective buyers. What I’ve noticed….when buyers decided to buy based on emotion, they are more likely to make a better offer. This isn’t done just by visual alone when they walk through the home for the first time. It starts when they first see the property and read its story. Once buyers can visualize themselves they start working on their own story, and how it will work for their family. I need to get them to FEEL the house while viewing the property online. Your storyboard is crucial, this is when a buyer can openly see your house as their home. Staging at this point is important, we don’t want them to see the your property as a guest in your house. The buyer needs to start the emotional process, not a logical one. “ Logic makes them think and Emotion makes them act” This is the 1st showing of your property to prospective buyers…shouldn’t it be the best? When they schedule an appointment this is their 2nd showing. The buyers are visiting the property to confirm their feelings about making an offer.
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