Category Archives: MARKET ANALYSIS

Pricing is More than a Number! Think!

Go Straley Group explain that market stats are not able to be discerned at a moment’s notice.  Not by a consumer or a real estate agent.  It takes study.  It is intentional.  It is unique and personal to your property, your marketplace and your location.

There is no other way.   This is why a professional agent in the market daily, for years or decades, will be your valuable resource.

It’s priceless – for the peace of mind alone.  Knowing everything has been considered.

Go Straley has visited thousands of properties over decades!  Through inspections, strategies and negotiations the experience internalizes and the results are tracked.

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Pricing a home for a buyer, as well as a seller is critical.  There are money leaks riddling the process and most of the time you don’t even know what you lost.

 

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It’s not a game of asking more and settling for less.  It is a target.  It is precision.   Most often you only get one time to hit the target.  Don’t waste opportunity!

Go Straley Group gets it right the first time – every time. 

Ask about YOUR CUSTOMIZED BUYING STRATEGY!

Finding Nemo? Tell Me What My House is Worth.

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A very simple question, how does the appraiser measure the contribution of an element such as a fireplace?

Is this a subjective process?

Can I have a simple answer??!!

Eureka, we have arrived!  This is what every REALTOR® simply wants to know, the $64,000 question.  The REALTORS® want this to be some easy methodology like: fireplace = $2,000, this one has it, this one doesn’t add $2,000 and done.  Same for granite, same for finished basement, same for hardwoods, same for garage, same for an acre, give me the numbers, plug them in, done!  The gap in understanding between the REALTOR® and the appraiser is the frustrating non-specific specific TRUTH of “IT DEPENDS!

Back up the truck and realize REALTORS® and the public understand that an appraisal is an “… opinion of value” (The Appraisal Institute, 2008) performed by a licensed appraiser.  The misunderstanding starts here in the “…”, and I will go tangential to illustrate and then circle back on topic.

I was involved in a volunteer job help program in the mid 2000’s and the client I was assisting reacted to something I said and he showed me a tattoo on his arm that said, “Money, the root of all Evil.”  Being that I am a huge fan of money as an efficient means of transferring manifested energy and investment, I paused for a moment and commented that I think a few words are missing from the phrase skewing the interpretation and possibly your actions in life.  Depending on the Bible translation you use, I found it to be, “For the love of money is a root of all kinds of evil.” (The Bible, 2017).  I realized that maybe he shortened it for impact and it would otherwise take up too much room, but that is inconsequential to the result. The truth is, when you leave off a few words, or even one, then the whole meaning changes and when the meaning changes, your thoughts change, and when your thoughts change, your actions change and when your actions change, your results change and when your results change, your whole world changes. 

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Returning to real property valuation, the complete definition of an appraisal is, “The act or process of developing an opinion of value” (The Appraisal Institute, 2008).  The “It depends” is due the truth that “It depends”, because the appraiser has to go through the act or process to determine the amount of adjustments, they just can’t count 12 fireplaces in a 3000 GLA area home and make an adjustment of 12 x $2,000 = $24,000 adjustment.  The act or process will determine, by repeatable methods, that the collective actions of the market may only value fireplaces in 3000 GLA homes up to 2 fireplaces and after that, additional ones may even detract from value.  This is where the Sales Comparison Approach is valuable over the Cost Approach. 

By shortening the definition of an appraisal to “an opinion of value”, market participants believe that the appraiser is using a subjective process based on feeling, rather than an objective process based on a processing of data and facts.  Many people and REALTORS® use the subjective processing and thereby make mistakes in market valuation estimates. If the REALTOR® uses the accumulation of intuitive knowledge/data collected from 100’s of transactions, then they become a human computer that is going through a complimentary act or process to the appraisers’ work, as long as it is not subjective or based on inaccurately on feeling.  This is a noteworthy time for a repeat of my earlier post that “REALTORS® are Market Makers and Appraisers are the Referees!” (Straley, 2017).

As for the technical appraisal answer to this simple question, the appraiser will utilize the act or process called “paired set analysis” to find homes that are exactly the same except that one has a fireplace and one doesn’t.  This objective process, based on facts and data, will enable the appraiser to distinguish the appropriate adjustment for the property characteristic.  If a paired set is lacking in sales history of the market, the appraiser can also use a sampling process of closely related/similar sales data using a set with fireplaces and a set without fireplaces and averaging the two sets and finding the difference in the averages.  The larger the sampling and the larger the differences wash out (Martin, 2013).  The smaller the characteristic difference, the harder it is to identify the market value of that characteristic.  I find it much easier to explain on larger elements like a 2 car garage vs. a 3 car garage because the collective market valuation is much more evident.  

bigstock_121114772The cold hard truth is that Nemo is not easy to find and there is no fast track to some quick opinion of value. Finding the objective facts is much more difficult than it looks and agreed, it would be much easier, but less accurate, to just have a subjective opinion. To support that view, simply watch the vetting from a Dragnet scene and you will agree, “Just the Facts, Ma’am” is the best method (Dragnet, 1970’s).  Sure, you can log into 400 websites to “Find What My Home is Worth” and come up with 400 different values and average them all, but you are much better off if you hire an experienced Appraiser and a well educated REALTOR® to help make sense of this complicated process. 

In the REALTOR® category, I suggest you look for a candidate with a degree from REALTOR® University and a certification from the National Association of REALTORS® Pricing Strategy Advisor (PSA) course (National Association of REALTORS® PSA, 2017), there is your Nemo! 

Michael Straley | Go Straley Group of eXp Realty | Stafford, VA. | Lic. in VA | 540-834-6263

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References:

The Appraisal Institute, (2008).  The Appraisal of Real Estate (Thirteenth Edition). 

The Bible, (2017). 1 Timothy 6:10. Retrieved from https://www.biblegateway.com/quicksearch/?quicksearch=root+of+all+evil&qs_version=NIV

Dragnet, 1970’s. Retrieved from https://www.youtube.com/watch?v=zlGWzAaR03Q

Dragnet, 1970’s. Retrieved from https://www.youtube.com/watch?v=AMIZGrgWOO4

Martin, S. P. (2013) Advanced residential applications and case studies (2nd Ed). Laguna Hills, CA: Ashley Crown Systems, Inc.

National Association of REALTORS®, (2017). Pricing Strategy Advisor Certification (PSA). Retrieved fromhttp://pricingstrategyadvisor.org/about/

What’s My Home Worth?

It’s Important to begin with the end in mind!  Knowing what your home is worth is always important.  Understanding your Net Worth is Essential for Financial Planning.   Pricing may change based on selling activity in the past six months.  We can keep you posted or advise you of ways you can track your home values without ever having to make a phone call.

What’s your home worth?

Go Straley Group Website – GO STRALEY GROUP OF EXP REALTY – Lic. in VA.

IS YOUR HOME ON THIS LIST?

540-834-6263 Fathom@GoStraley.com Fathom Realty Licensed in Virginia Stafford, Va.
540-834-6263
Fathom@GoStraley.com
Fathom Realty
Licensed in Virginia
Stafford, Va.

Michael and I are seeing a boom in Virginia!  REALTORS® are moving over to the 2015 FASTEST GROWING REAL ESTATE COMPANY FATHOM REALTY,

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not only because they GET MORE – KEEP MORE and can choose to advertise and build brand awareness locally – but also because as we move towards greater efficiency we have the ability to provide excellence in service!

Some of the great homes sold in Fredericksburg, Stafford and Spotsylvania are by Michael and Rebecca Straley, Fathom Realty,  and are listed below. The list goes on and on because if you want something done – ASK A BUSY PERSON!

The best news is we build trusted relationships!  After all we don’t live to work – WE WORK TO LIVE!  CONGRATULATIONS!  to the many Fathom friends and family that have dreams coming true!  A GREAT BIG THANK YOU – and please remember we are never too busy to answer your questions (even phone trivia)  we want to work for people like you!

Is your home on the list?

  1. 6462 ROCKSHIRE ST ALEXANDRIA VA 22315 9/26/2014 345000 Buyer
  2. 413 ALDER DR STAFFORD VA 22554 2/20/2015 507000 Buyer
  3. 1118 POSEY LN FREDERICKSBURG VA 22401 10/30/2014 235000 Buyer
  4. 704 KNOLLWOOD CT STAFFORD VA 22554 12/23/2014 190023 Buyer
  5. 141 LAKE FOREST DR FREDERICKSBURG VA 22406 8/18/2015 520000 Buyer
  6. 6292 AUTUMN LEAF DR #0 FREDERICKSBURG VA 22407 9/3/2014 230000 Buyer
  7. 104 VALDOSTA DR STAFFORD VA 22554 12/15/2014 233000 Buyer
  8. 1308 SAUNDERS DR FREDERICKSBURG VA 22401 11/6/2014 237000 Buyer
  9. 139 COOL BREEZE WAY FREDERICKSBURG VA 22406 3/24/2015 399000 Buyer
  10. 1303 WILCOX AVE FREDERICKSBURG VA 22401 2/10/2015 225000 Buyer
  11. 6802 LAKERIDGE DR FREDERICKSBURG VA 22407 7/10/2015 297500 Buyer
  12. 46 SUMMERFIELD FREDERICKSBURG VA 22405 3/26/2015 357309 Seller
  13. 2319 DRAKE LN FREDERICKSBURG VA 22408 1/31/2015 226308 Seller
  14. 1 BELLS RIDGE DR STAFFORD VA 22554 11/6/2014 360000 Seller
  15. 3204 COURTNEY SCHOOL RD MIDLAND VA 22728 11/24/2014 470000 Seller
  16. 2345 DRAKE LN FREDERICKSBURG VA 22408 10/30/2014 273628 Seller
  17. 719 LEE AVE FREDERICKSBURG VA 22401 11/24/2014 204000 Seller
  18. 51 SETTLERS WAY STAFFORD VA 22554 10/29/2014 332500 Seller
  19. 101 DUKE AVE FREDERICKSBURG VA 22405 1/15/2015 430000 Seller
  20. 17268 CAMELLIA DR RUTHER GLEN VA 22546 11/21/2014 345000 Seller
  21. 1108 SPAIN DR STAFFORD VA 22554 9/19/2014 222000 Seller
  22. 2331 DRAKE LN FREDERICKSBURG VA 22408 5/15/2015 259453 Seller
  23. 10912 BUCKSKIN LN FREDERICKSBURG VA 22407 5/29/2015 207000 Seller
  24. WALKER’S BRANCH RD UNIONVILLE VA 22567 6/5/2015 285950 Seller
  25. WALKER’S BRANCH RD UNIONVILLE VA 22567 4/24/2015 284950 Seller
  26. 7129 DURRETTE RD RUTHER GLEN VA 22546 5/29/2015 210000 Seller
  27. 5413 E RICH MOUNTAIN WAY FREDERICKSBURG VA 22407 3/13/2015 415000 Seller
  28. 8600 LAROQUE RUN DR FREDERICKSBURG VA 22407 1/30/2015 556000 Seller
  29. 2333 DRAKE LN FREDERICKSBURG VA 22408 6/1/2015 233662 Seller
  30. 12 SEAY CT FREDERICKSBURG VA 22405 4/21/2015 328000 Seller
  31. 109 HOPE DR RUTHER GLEN VA 22546 5/11/2015 179900 Seller
  32. 19 PALLADIO DR STAFFORD VA 22554 6/24/2015 464900 Seller
  33. 2344 DRAKE LN FREDERICKSBURG VA 22408 7/21/2015 269306 Seller
  34. 9 SKYVIEW CT STAFFORD VA 22554 8/25/2015 388000 Seller
  35. 85 WILLOW RIDGE CT FREDERICKSBURG VA 22406 7/15/2015 555000 Seller
  36. 1301 ROWE ST FREDERICKSBURG VA 22401 12/5/2014 194743 Buyerears to hear WAITING FOR YOUR CALL/TEXT 540-834-6263 MICHAEL

NEGOTIATION NUDGE – 10 MONEY TIPS TO GET THE DEAL DONE!

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TEN WAYS TO WIN THE NEGOTIATIONS!

Negotiations are about inquiring about the individual parties – what are their needs? What is the value of the property? What is the feeling? Are both parties equally paired in negotiation techniques and feelings?

1. The monthly difference of $3000 per month is about 15 dollars at 4.5% over years – does your buyer qualify for this? Is it worth a couple of Starbucks a month to own this house? If not, move on????  CLICK HERE TO AMORTIZE

What is the additional down payment? $0 or $300 or $600 – does the buyer have this?

2. The buyer may have requested some items from the seller that may be removed or purchased by others – such as home warranty? Home warranty can be purchased by other parties or perhaps after closing (30 days I think, please confirm.)

3. Is there another type of financing that may save buyer monies? If he is a hometown hero, you might wish to contribute 20% and Parkmont would contribute $750. Fathom Partners to SAVE MONEY FOR HEROES!

4. Do you have a thoughtful and specific estimate of closing costs. Ask your lender and title company to crunch the numbers – the difference in a negotiation may be won or lost based on the difference of a ballpark estimate and specific estimate.

5. Does the seller have a Title Policy – does the title policy qualify for a 20% discount to the buyer at the title company purchase of title insurance. Depending on type of policy, when it was purchased, and who is issuing new policy sometimes there may be a credit or reduction in cost to the buyer title insurance.

Are we really present?  Are we using time well? or are we just a shadow of our real selves?
Are we really present? Are we using time well?
or are we just a shadow of our real selves?

6. Take the $3,000 off our commission if you feel the benefits out weigh the consequences.

7. Discuss this with your client – strategize negotiations with your client – 1500/1500 750/750/750/750 –   Who can participate??

8. Looking forward, you need to have an understanding of your clients home inspection expectations, as negotiations continue throughout the process. Do buyer and seller have like minds on upcoming issues. Do you expect appraisal difficulties? You need to inquire, if your buyer still wants much more or if seller has no room to budge further – setting expectations forward may be a part of the discussion now with your client and the coop agent.

9. Does the seller have the money available? Perhaps the seller is bringing money to the table – and has no more? Perhaps the seller has plenty of money on the table and just “feels” he wants more. Confirm this is not a potential short sale.

10. Bottomline, what is the property worth? Is the buyer getting a deal, a fair price, or over paying – this is always the starting point. What is fair market value?? Learn more about the GOLDILOCKS THEORY

Always follow your ethics with Cooperating Agent When Negotiating…

Standard of Practice 16-16
REALTORS®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation. (Amended 1/04)