Monday, January 28, 2008

How A CMA Can Help You

A comparative market analysis, or CMA, is a real estate agent's evaluation based on local listing and sales data used to determine the probable sale price of a property in the current market. For a seller, a CMA can help you determine a listing price. If you are a buyer, the CMA will help you decide on what to offer for a listing.

Although reports can vary from a two-page list of comparable home sales to a 50-page comprehensive guide, the length and complexity of the CMA depends on the real estate agent's business practice. However, standard comparative market analysis reports contain the following data:

1. Active Listings - Active listings are homes currently for sale. Such listings are not completely indicative of market value because sellers can ask whatever they want for their home, but they will give you an idea of averages.

2. Pending Listings - Pending listings are formerly active listings that were under contract. These homes have not yet closed, so they are not yet a comparable sale. Unless the listing agent is willing to share information about the pending sale -- and many are not -- you will not know the actual sold price until the transaction closes. However, pending sales do indicate the direction the market is moving.

3. Sold Listings - Homes that have closed within the past six months are your comparable sales. These are the sales an appraiser will use when appraising your home for the buyer, along with the pending sales (which will likely have closed by the time your home is sold). Look long and hard at the comparable sales because those are your market value.


When examining comparable sales remember to choose homes that most closely resemble your home. It is difficult to compare a tri-level home to a single-story home. Select the homes from this list that are mostly identical to your home in size, shape and condition, such as: similar square footage, similar age of construction, similar amenities, upgrades and condition and similar location.

4. Off-Market / Withdrawn / Canceled - These are properties that were taken off the market for a variety of reasons. This number can be used as a high water mark. The reason these homes are removed from the market may be due to prices being too high. The median prices of this group will almost always be higher than the median prices of comparable sales. However, listings cancel for other reasons such seller's remorse, the DOM was too long, repair requests, or the seller fired the agent.

5. Expired Listing - This group will reflect the highest median sales price because they did not sell and were probably unreasonably priced. Some of the expired listings could also show up as an active listing, listed by a new agent at a new price. Listings also expire because they were not aggressively marketed or because the home was in need of repairs.

A real estate agent's knowledge of the local market can affect the accuracy of a CMA, particularly in a neighborhood with a lot of variability in the housing stock. Unless the agent has actually seen the comparable listings, he or she may not draw the correct conclusions. So pick your agent carefully and you too can benefit from the value of a CMA.

Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal service. For more information, please visit www.electronicappraiser.com.

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Thursday, January 24, 2008

The appraisal industry has changed…..forever!

AVM’s have forever changed the way Wall Street, Lenders and Banking industry use appraisal. You may be asking yourself, what is an AVM and how does it affect the appraisal industry?

AVM is short for "Automated Valuation Model". Appraisers, Wall Street and Lending Institutions all use AVM technology in their analysis of residential property. An AVM is a residential Valuation Report that can be obtained in a matter of seconds. It is a technology driven report. The product of an automated valuation technology analysis, public record data, and computer decision logic combined to provide a logical calculated estimate of a probable selling price of a residential property. An AVM generally uses a combination of two types of evaluation, the running of a hedonic model and a repeat sales index. The results of each are weighed, analyzed and then reported as a final estimate of value based on a requested reasoning date. http://www.electronicappraiser.com/why.cfm

AVM’s have been around since the late 1990’s. For decades, mortgages have been constantly bought and sold in large groups of loans, (pools) by banks, institutional investors and Wall Street. As technology caught up with the demand, there arose a need to rapidly evaluate large groups of residential loans without appraising each property associated with the corresponding loan. This has always been an expensive process that could take several weeks to complete. AVM technology allowed the addresses associated with each loan to be fed into a computer, AVM reasoning would be applied to each property and result in a report of the then current “market” value for each property in a loan pool. The AVM would assist the institutional investor in determining their risk for that pool.

As AVM technology improved, many uses for them evolved. Not only were they being used for large pools, but also for individual loans. Fifteen years ago, a no closing-cost loan was virtually unheard of, with AVM’s they became commonplace. Loans were just too expensive to process, one of the largest costs being that of a traditional appraisal. AVMs allowed lenders to quickly evaluate a property and in many cases determine if a full appraisal were necessary to fund a loan, and could be done inexpensively. This was especially true in “portfolio” loans, loans in which a lender did not intend to sell.

AVM’s give a non-partial analysis, appraisers are constantly being persuaded by real estate brokers and loan agents to hit a certain value. There is no bargaining with an AVM, the computer determines a non-biased value, thus greatly reducing the risk of fraud.

AVM’s are attractive in price, significantly lower than a traditional appraisal. From $25-$50 for individual reports, to a few dollars each if bought in bulk.

AVM’s have not evolved to the point where they are able to replace the appraiser, nor are they suited for every use. For example, they are relatively new to the market in originating first mortgage loans and in a rapidly changing real estate market (up or down), local knowledge is a must. The acceptance and uses of AVMs is constantly expanding, and as it expands the need for a traditional appraisals will continue to diminish.

About the Author: Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal service. For more information, please visit www.electronicappraiser.com.

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Tuesday, January 15, 2008

Why Should You Use A Realtor®

We all want to save a few bucks when we can. But there are times when scrimping is not worth it and in the end, it could cost your more than you can save.

Hiring a Realtor® is one of those times when it isn’t wise to scrimp. When the stakes are high, as with the investment of purchasing or selling your home, your want a professional on your side.

So what can a licensed Realtor® offer you?

1. Help you determine how much house you can afford. Sometimes lenders have limited options when it comes to purchasing a home. A Realtor® can help you get more creative and possibly even connect you with a lender who can be more flexible with your funding options.

w2. When looking for that ideal home, you either need to have the time to peruse the listings or leave it to a realtor, whose job it is to know all of the listings. By giving your Realtor® an idea of what you are looking for, they can keep their eye open on your behalf while watching the price range.

3. If you are moving to a new city or town, you want to know the ins and outs of the community. A Realtor® can give your local information such as what the zoning rules are, where the local schools are and what the environment is like. All of this can be of great help to you before making your big investment in a town you are unfamiliar with.

4. If negotiating price is your weakness, whether in selling or buying, a Realtor® can help do this for you. The Realtor® can also help you with date of possession, inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. During the evaluation of your property, your Realtor® will follow up with due diligence. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. The Realtor® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property.

6. When selling your home, the Realtor® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.

7. When it comes to promoting your home for sale, the Realtor®, who sees people day in and day out looking for property as well as other realtors, can be your perfect marketing strategy. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer.

8. Your Realtor® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your Realtor® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

9. Last, the Realtor® can answer questions and tie up loose ends before the closing of the house. They complete the paperwork and resolve issues, which can save you many headaches.


About the Author: Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant information about house values. For more information, please visit www.electronicappraiser.com.

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Friday, January 11, 2008

Question: Why use a Realtor®?

Answer: …..The Multiple Listing Service (MLS)

Access to real estate information: Realtors® have many resources to turn to in assisting you in your home search that public web sites lack. The web has changed the way we all search for information. Many publications are now quoting that up to 80% of home shoppers initiate their search on the web. This is up from 0% about 10 years ago.

Real estate is one of the most commonly search subjects on the net. Every web portal from Google to Yahoo, to Earthlink, to MSN has a real estate tab or sub-site to simplify real estate search. The amount of real estate data on the web will blow your mind. To make things more complicated, every week new real estate sites come online. Realtors® have these public options available along with their local Multiple Listing Service (MLS). MLS as defined by Wikipedia as:

Multiple Listing Service (MLS) (also Multiple Listing System or Multiple Listings Service) is a group of private databases which allows real estate brokers representing sellers under a listing contract to widely share information about properties with real estate brokers who may represent potential buyers or wish to cooperate with a seller's broker in finding a buyer for the property. There is no single authoritative "MLS", and no universal data format. The many local and private databases--some of which are controlled by single associations of realtors or groupings of associations (which represent all brokers within a given community or geographical area) or by real estate brokers--are collectively referred to as the MLS because of their reciprocal access agreements. http://en.wikipedia.org/wiki/Multiple_Listing_Service .

Full use of an MLS system is generally only available to its members, Realtors®. MLS information is very time sensitive. Once a new listing is obtained from an broker and placed into their MLS system, it is immediately available to its members. A resourceful Realtor® can find a “hot property”, a price reduction or brand new listing by searching their MLS and immediately calling you to set up an appointment. These can be homes that may not be anywhere else on the net. It can take several days for property to go from an MLS system to Realtor.com where it will be viewed by the rest of the world. Don’t get me wrong Realtor.com can be a great place to start, but it gets its information from the local boards of Realtors® and the MLS.

A Realtor® armed with the knowledge of how to efficiently search the MLS system will be able to narrow your search with ease. How many times have you gone to a web site looking for a home and your results were in the hundreds or even thousands? It’s time consuming going through that many properties. MLS searches get very granular, giving your Realtor® the ability to input your criteria, save the search, and have it email them anytime a property match is found. A search could be as complicated as: Condominiums (in your favorite building) with only east facing exposure, between $300,000 and $339,900, that allow pets, come with owner financing, and include the window treatments. Try doing this search on Realtor.com.

Once you employ the help of a REALTOR®, he or she will have access to the MLS. If you are a seller your home will be immediately exposed to the community of agents who also belong to the same MLS. If a buyer, your agent will have up to date information of available homes that meet your discriminating taste; even if your dream home is a concrete home, only two stories, in your favorite zip code, built between 2000-2004, includes a finished basement, 4 bedrooms, 3 bath rooms, at least 2500 square feet on a ½ acre lot and a new roof. Try this one on Realtor.com…..

About the Author: Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant information about house values. For more information, please visit www.electronicappraiser.com.

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Monday, January 7, 2008

Improving Your Home’s Resale Value

Are you getting ready to sell your home and want to get the most for the value? If so, there are a few simple things you can do that won’t necessarily cost you a fortune.

First of all, when potential buyers drive up to your house, the first thing they see is the front of your house. Knowing that the exterior of the house usually is a good indicator of the inside of the house, you want your home to have curb appeal and make buyers want to see the rest of the house. So here are some quick things you can do.

1. Mow the lawn regularly while your home is on the market. If you have patches in your yard where grass doesn’t grow, you can either sow some grass seeds or sod the areas. If the bare area is at the base of a tree, you could turn the spot into a flowerbed.

2. While we’re on the subject of flowerbeds, be sure to keep these areas weeded when trying to sell your home. Adding pine straw or mulch can freshen up your yard and make your yard look well cared for.

3. Add some color to your yard by planting flowers. You can use them in beds, hanging baskets, or flowerpots. Planting flowers can help to liven up a house, especially if the home is older or more traditional. And, be sure to pick vibrant colors over pastels or white in order to give the full effect.

4. Clean your windows. People always look out of the windows when they’re viewing a home. So, cleaning the windows will help the view from the interior and the exterior!

5. Use a pressure washer to clean sidewalks and driveways. Pressure washing cement, especially, can make it look as though it was freshly poured.

6. Make your front door inviting. Since most potential buyers enter your home through the front door, you want to pay attention to this part of your home. If there are any shoe marks at the base (or hand marks near the handle), be sure to clean those. Depending on the type of door you have, you can also give it a fresh coat of paint.

7. Examine your home’s exterior. If your home has siding, check to see how clean it is. If you see collected dirt or pollen, you can clean these surfaces fairly easily with a pressure washer. If your home is painted, check to make sure the paint is not chipping away. If your home was painted recently, you may just want to hose off (or gently pressure wash) any visible dirt. If your home is in need of new paint, be sure to choose neutral colors.

8. While your pet may be your pride and joy, even a friendly dog’s barking may frighten a buyer. If you can’t remove your dog, try to confine it to the garage or dog run. Many buyers are allergic to cats, so be sure litter boxes are clean.

9. Remove the clutter from inside your home. If your home has too much furniture, overflowing closets, junk sitting in corners, and crowded kitchen and bath countertops, potential buyers cannot see your home. Removing clutter will make your home appear bigger and brighter

10. Clean your house. Buyers want to move into a clean home. They feel more assured of that prospect if the home is spotless at it’s showing. Clean walls, baseboard trim, window sills, light switches, doors, and light fixtures. Steam clean carpets and dust window blinds. Dust/wash off lint from the washer and dryer, even wash off the furnace and hot water heater. A sparkling clean home is sure to impress!

11. Do everything you can to brighten the interior of your home. Pull back your curtains and drapes so prospects can see how bright and cheery your home is. Let the sun shine in! For an evening showing, turn on all the lights - both inside and outside. Light adds color and warmth, and makes prospects feel welcome. During the winter, maintain a comfortable temperature even if you are away for an extended time.

About the Author: Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal services. For more information, please visit www.electronicappraiser.com.

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Inexpensive Ways To Give Your Home A Facelift

If you are looking to sell your home or even have it appraised, you want to get the most value you can for your money.

Those of you who have taken up home improvement projects know that there is a monetary return for every improvement investment. Although the actual cost and payback for each project can vary, depending on both your home's condition and overall real estate market values in your region of the country, here a few things you can do that will most likely improve your home’s worth.

1. Make your kitchen really cook. The kitchen is still considered the heart of the home. Potential homebuyers make a beeline for this room when they first view a home for sale, so make sure your kitchen looks clean and reasonably updated.

For a few hundred dollars, you can replace the kitchen faucet set, add new cabinet door handles and update old lighting fixtures with brighter, more energy-efficient ones.

If you've got a slightly larger budget, you can give the cabinets themselves a makeover. You don’t need to replace your cabinets, hiring a company to reface them can give you the same results for less money. If you're handy, you can order your own replacement cabinet doors and door fronts from retailers like Lowe's Home Improvement or The Home Depot and install them yourself.

2. Give appliances a facelift. If your kitchen appliances don't match, order new doors or face panels for them. Many dishwasher panels are white on one side and black on the other, so if you are trying to match everything up, slide out the panel and flip it around.

A more cohesive-looking kitchen makes a big difference in the buyer's mind -- and in the home's resale price.

3. Buff up the bath. Next to the kitchen, bathrooms are often the most important rooms to update. They, too, can be improved without a lot of cash. Simple things like adding a new toilet seat and a pedestal sink are pretty easy for homeowners to install, and they make a big difference in the look of the bath.

If your bathroom floor is old and discolored, try replacing tiles with easy-to-apply vinyl tiles or a small piece of sheet vinyl. You may not even need to take up the old floor. You can install the new floor right over the old one.

If your tub and shower are looking dingy, consider re-grouting the tile and replacing any chipped tiles. A more complete cover-up is a prefabricated tub and shower surround. These one-piece units may require professional installation but can still be cheaper than paying to re-tile walls and refinish a worn tub.

4. Step up your storage. Old houses, particularly, are notorious for their lack of closet space. If you have cramped storage areas, try adding do-it-yourself wire and laminate closet systems to bedrooms, pantries and entry closets.

5. Add a room in a week or less. "If you have a three-bedroom house with a den, the only reason the den can't be considered a bedroom may be because it doesn't have a closet. If you add a closet to that room, you've now got a four-bedroom house. That adds a lot of value."

6. Mind the mechanics. Spending a few bucks on nitty-gritty stuff such as repairing leaks, wrapping or fixing loose wires, and fixing any faulty outlets.

7. Look underfoot. Carpeting is another detail that can quickly update a home and make it look cleaner. A professional carpet cleaning is an inexpensive investment, especially if your rugs are in good shape and are neutral colors.

If your carpet is showing serious wear, cover it with inexpensive, strategically placed area rugs. Unless it is truly hideous, most Realtors don't suggest replacing wall-to-wall carpeting right before you sell your house. The new homeowners may want to choose their own carpeting after they move in.

8. Let there be light. If you have boring recessed lights in your dining and living rooms, consider replacing one of the room's lights with an eye-catching chandelier. Home stores offer a wide range of inexpensive, but nice-looking, ceiling fixtures these days. If you have a ceiling fan and light, you can also buy replacement fan blades (leaving the fan body in place) to update the fixture's look.

9. Reframe your entry. Do you have a flimsy little knob on your main entry door? If so, spring for a substantial-looking handle-and-lock set. A nice, big piece of hardware on the front door signals to newcomers that this is a solid home.


About the Author: Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal services. For more information, please visit www.electronicappraiser.com.

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