There are many aspects to buying Encinitas real estate or selling an existing home, but price is at the top of everyone’s minds. If you’re buying how will you know you’re getting a good deal? If you’re selling, what price is high enough to get the most money and low enough to be competitive? It’s the comps, or comparable values, that set the market trends. It’s a sales history of sorts that buyers and sellers use to price or make offers on homes. If you understand how comps work for you or against you, you’ll have more confidence about your home purchase or sale.
Everything that sells in your neighborhood is a comp. Whether it sells low or high, the next buyer or seller is going to be using that statistic to determine value. If your neighbor gets foreclosed upon and his home sells low at auction it affects everyone’s values in the neighborhood. If you use an agent unfamiliar with the neighborhood to sell you home and he doesn’t know about the history of each sale, he may recommend your home be priced to low or to high. If it’s priced to low it hurts everyone in the neighborhood because buyers will use those comps against the next seller. It hurts you because you made less money. That’s why it pays to at least talk to and consider using the agent that farms (mails to) you and your neighbors. It’s more likely that person can turn vulture like buyers into a buyer who understands neighborhood value because a foreclosure situation can be explained.
Comps are also used by appraisers. I get calls from them all the time asking about concessions or credits that were issued by the sellers or received by the buyers. They want to know how the deal really stacked up. Comps show up in the MLS or tax records as a single sale price. What does that price mean though if a home sold for $650,000 with a $30,000 roof credit? It means that the house really sold for $620,000 and the records don’t reflect that. This is why it’s so important to have a professional advocate working in your corner who is local and knowledgeable of an area’s sales history. At the very least, you need someone who is interested enough in doing the research to find out what the data really means.
Lastly, comps mean a lot to buyers because that’s what tells them how things are selling. It’s a gauge that let’s them know if buying a fixer is really a good deal. If a fixer house sells for $550,000 and the buyer needs to put $75,000 into it to bring it up to livable condition, how would he know he was doing the right thing by doing those improvements? That’s right, it’s the comps. If the same house down the street recently sold for $675,000 and it was all fixed up with similar improvements, the buyer of the fixer would now be $50,000 ahead. Make sense?
It never hurts to keep track of sales prices in your area or to visit a few open houses. Best bet is to talk to a real estate professional who studies comps in your neighborhood every day. In the long run you’ll feel more confident about your home purchase or sale decisions by having someone who can help you understand how comps affect a home’s value.
In the past few years I've been researching who are the successful agents, tried to figure out why top agents are top agents.
Do they have a common educational background? No. Good ones have high school diplomas, masters and doctorates. No correlation.
Similar previous careers? No. One of the best agents I know used to teach baton twirling. I doubt if I could find a lot of those if I tried! I've had waiters, teachers, high powered executives and stay-at-home Moms who were all very successful.
Common interests? No. Other than eating, (which we Realtor-types seem to do exceptional well) the interests are widely diverse.
After 13 years in real estate sales and management, I've only found a few constants.
1. Successful agents treat the real estate business as a business. They actually have a business plan and a budget. They understand that you have to spend money to make money. They know how many sales they need to make the income they require and then they figure how they'll get from here to there. They plan in advance and execute the plan.
2. They actually work when they work and play when they play and take a day or two off every week. (Just like a "real job!")
3. They have fun and enjoy selling real estate but know that it won't be forever.
4. They buy a lot of real estate for investment when they see good deals because they know that no one gets rich selling the stuff. You get rich owning it! Financial independence gives one a lot of freedom, autonomy and a certain air of confidence that smells like success.
. . . And people like to do business with successful people so they do more business!
That’s why I choose this realtor http://www.realtydirectorymakers.com/ for my future
Posted by: Successful Agents | September 18, 2007 at 03:31 AM