Leslie Sargent Eskildsen is an Orange County Realtor. She blogs about what she thinks Orange County homebuyers and sellers need to hear. Find her blog at whatagentsfeartellingyou.com.
We are all on the same page that it is a seller’s market today in Orange County real estate. Not enough listings to feed the appetite of well qualified buyers aching to take advantage of historic low interest rates. You’re with me, right?
If you are a buyer or a seller in today’s market, you’ll be having discussions with your Realtor to look at the comparable sales (same neighborhood, floor plan, size, number of bedrooms, condition, and location.) Your Realtor will call them “the comps.” So you’ll know what your home will sell for if you are selling, and you’ll know what you’re going to have to pay if you’re buying.
With that in mind, here are the top four things you need to know to gauge the current market value today.
1. Pay close attention ONLY to the comps that have actually closed in the last six to eight weeks. Prices are trending up right now and you want the most recently closed sale you can get your hands on. The ones that opened escrow six to eight weeks ago and have already closed would be an even better indicator of current market value. You’ll see why in a minute.
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2. Make sure you know the whole story. Was there a short sale negotiator that the buyer had to pay that isn’t reflected in the closed price? Were there back due taxes or HOA dues that the buyer had to pay? Did the seller pay some of the buyers’ closing costs? Your Realtor can dig under the surface to help you see the whole picture. You’ll see how in a minute.
3. More about those Short Sales. Make sure you know when they opened escrow. If it was eight months ago, the buyer got a smoking hot deal and that price cannot be compared to the homes that just opened escrow six to eight weeks ago. It is not a valid comp. Don’t get emotionally attached to it – it just might lead you far, far astray.
4. Check into the current comps that are in back-up and pending status. You’d be amazed how helpful Realtors can be – and still be within the boundaries of their fiduciary responsibility to their clients. I love checking into these – you’ll likely find out how many offers they received, if they do have any back-up offers (not a bad strategy in today’s market,) if they received any cash offers and how much over the list price the offers were. Meaning, of course, your Realtor will find out as much as she possible can to help you be successful.
2. Make sure you know the whole story. Was there a short sale negotiator that the buyer had to pay that isn’t reflected in the closed price? Were there back due taxes or HOA dues that the buyer had to pay? Did the seller pay some of the buyers’ closing costs? Your Realtor can dig under the surface to help you see the whole picture. You’ll see how in a minute.What’s the big secret to digging deeper to really understand the current market value today? Two things – that your Realtor reads the secret, for-agents-eyes-only remarks on the comps – because that’s where a ton of information can be found. And you won’t see it on Realtor.com, Trulia.com or Zillow.com. And secondly, having the gumption to call and ask what the story is. Haven’t had anyone hang up on me yet.
4 ways to gauge current market value is a post from: Lansner on Real Estate
