How does a homeowner calculate the "magic number" that will have buyers falling over themselves to be the first to make an offer, and make it easy for them to secure a home loan?
Market value
Unlike used cars, used homes don't have a predetermined “trade” price, and the magic number, or market value of a property, also has nothing to do with the municipal value, the insured value or how much money the seller needs to put towards his next purchase. In addition, the market value – or what a willing and able buyer will pay for the property at any given time - depends on several interactive factors that are continually in flux, such as:
- Home loan interest rates
- General economic conditions
- The condition of the property
- The housing supply situation
- The buyer's financial situation.
Comparative Market Analysis (CMA)
However, there is a way to get pretty close to the magic number and that is the Comparative Market Analysis (CMA), which should be available from any reputable and knowledgeable agent who wants a mandate to market the property.
Compiling a CMA involves comparing the property in question with recently sold similar properties in the same area, and the most reliable CMAs are those which use the actual selling prices recorded in the Deeds Office when properties are transferred.
However, to be really effective, the CMA should also list initial asking prices, as well as the length of time each of the sold properties were on the market.The seller will then be able to see the price level at which there is a significant market resistance, which is indicated by a lengthy time between a property first being listed for sale and actually being sold or being taken off the market again.
On the other hand, by scanning for the homes with the shortest listing times and their actual selling prices as a guide, sellers should quickly be able to determine a “winning” list price for their properties.
A great agent at your side
With the help of a good agent who is able to pre-qualify prospective buyers and put them in touch with an effective mortgage originator such as BetterLife Home Loans, you should be able to look forward to a successful sale within just a few weeks.