What is a Market Analysis?

Setting the right price is probably the most important step in the process of selling a home, and this is especially true in an over-supplied (buyer’s) market, where price and condition sometimes are as important as location in the eyes of the buyers.

So, how do you arrive at the “right” price for your home? Is it necessary to spend $300 to $400 for a professional appraisal of your property before placing your home on the market?

Please note that a professional appraiser's opinion of a property's market value is based on the recent comparable sales (comps) of similar homes in the neighborhood, adjusted by the square footage, condition and features of the property. Different appraisers may come up with different figures. Even if all of them agreed on a value, there is no guarantee that you would receive that amount for your property.

An alternative to a professional appraisal is to ask an experienced, professional REALTOR for a written market analysis of your home. This market analysis may include:

· general market area and neighborhood trends and statistics;

· information about recent home sales in your neighborhood (the facts of what has actually happened);

· information about current “active” homes listed for sale on the MLS, similar to yours in location and size (the competition); and

· information about “withdrawn” and “expired” homes in your neighborhood (what has not sold)

A REALTOR like myself may provide this service free of charge or obligation. If you are still unsure of the value of your home, you may wish to pay for a formal appraisal.

Please keep in mind that while appraisals and market analyses give you reasonable guidelines, the actual value of your home is determined by the market, and not by what you, the appraiser or the REALTOR^Ò think the home is worth.

Strategic pricing is one of the very important services that your REALTOR should offer to be able to achieve your selling objectives.

Should you Buy Now, or Should You Wait?
I read this interesting article on MSN about when to buy now and when to wait. Here is the summary:

BUY NOW IF:

Prices in the neighborhood you are interested in are relatively stable. Either they are holding their own or increasing, or the pace of decline is slowing significantly. If you have to move and don't like apartments, the small penalty you pay for missing the bottom may not mean much.
You plan to stay in the home for more than five years. If you can stick it out that long before selling, economists say you’ll probably ride out any downturn and come out ahead on price.
Your rent rivals a mortgage payment. If you can afford to buy, it can give you one bonus that renting can't: the mortgage-interest deduction on your taxes.
You've found the right house in the right area for you. The schools are great. You love the area and know it would be hard to find another house like the one you have your eye on. In a better market, you would most likely have much more competition for that home.
You've built equity in your house and are moving to a place where homes are cheaper. In your new market, your money will go a lot further.

WAIT TO BUY IF:

You've lived in your house less than two years. Chances are you haven't had enough time to accumulate equity in your home. Indeed, you may have negative equity, if you live in many areas such as California, Florida, Arizona or Nevada.

Your job security is uncertain. If your company or business is in distress, it's probably better to stay put until the smoke clears.

You don't plan to stay in your next house at least five years. While it's not important to buy at the exact bottom of the market, it is important to stay long enough to ride it out completely.

You don't have good credit or a decent down payment. Do you have a job and income you can document? As a result of the subprime lending crisis, lenders are much more careful about whom they're giving their money to.

You have an existing home to sell in a neighborhood where prices are dropping precipitously or where the number of foreclosures is spiking. In this climate, you're probably better off waiting out the storm.

Click HERE to read the full article.

Homeowners in Distress

These days everyone is talking about foreclosures and buying distressed properties, the fallout from the sub-prime mortgage debacle.

What many people don't know:

• The process a property goes through before and after the lender takes control of it
• The issues, players, risks and opportunities involved in purchasing a property in distress

This tends to be a common path for an owner in distress:

1. The owner defaults on the loan (stops paying mortage payments)
2. The lender sends several letters warning owners they are in default and telling them they will foreclose if not brought up to date.
3. The lender places a "lis pendens" on the title of the property. This is a clear indication that the lender plans to get control of the property.
4. The lender forecloses on the property and takes control.
5. The property is auctioned to the highest bidder at the courthouse steps. If no bids match or exceed what the first mortgagee wants to net, the first mortgagee usually "buys back" the property and evicts the former owner.
6. The property becomes a "Real Estate Owned" (REO) property and is offered for sale by the lender.