How to price a home in the Grand Rapids Real Estate Market
When an agent arrives at a price to list your Grand Rapids home at, he or she should share with you how he arrived at the figure. What facts from the West Michigan Real Estate market did he share with you to help you make an educated decision? An agent who comes in and gives you a figure without data and expects you to just believe him because he knows the market, is not giving you an active part in deciding the listing price of your Grand Rapids Home.
Pricing a home is like a puzzle. No one piece by itself creates the picture. It is only when you view all the pieces together that the picture makes sense. Sometimes, you can tell what the picture of a puzzle will look like if it is a missing a small piece. But if the big piece is missing, it may be impossible to decipher the image. One piece ff the puzzle may be more important than others to decipher the image. It is the same way in pricing a home in the Grand Rapids Real Estate market.
One of the first pieces of information your prospective agent should share with you are what the prices of the homes in your West Michigan neighborhood have sold for in the 30 days prior. It is important to try and stay within 30 days but there are situations where you may need to lengthen that time frame. These homes should be like yours in size, amenities, and location. Some things that should also be considered are the age, the architectural style of the home, and the type of basement (full, daylight, walkout, slab). There are so many things to consider and this is where your prospective agents expertise will come in. This will give you an average sold price for your type of home.
Please realize, this list of comparables will almost certainly contain Grand Rapids Foreclosures and Grand Rapids Short Sale Homes. You must consider these foreclosed homes in your comparables because when your home is listed you will be competing with those foreclosed homes. When the comparables have been chosen, a large piece of the puzzle is able to be deciphered but it will take the other pieces to make it clear and easy to see.
When the comparables are chosen, there will be an average price per square foot. This price can be skewed for several different reasons. Your perspective agent should be able to explain to you why and what would cause these figures to be skewed. There are many different factors that could cause this. One cause is the difference between TFLA (total finished living area) and the ANSI (stands for American National Standard Institute but means square footage above ground on all sides). A finished or finishable basement will skew the figures and should be taken into consideration. Once you know the average price per square foot, you should be able to arrive at a price that will add to puzzle helping you to decide what the list price should be. Remember one piece in and of itself does not determine the price you need to look at all the pieces.Another piece of the puzzle here in the West Michigan Real Estate market, is to look at the assessed value. The comparables that were chosen and were like your home will have a percentage that they sold over the assessed value. This percentage can then be applied to your assessed value to come up with another price that will help you determine the price of your house. Remember, you can not look at only one piece because naturally, you would go for the higher price.
For example, lets say that you purchased your West Michigan home in January 2003 for $100,000. The appreciation values for the next 5 years were as follows:
+3%, +4%, +2%, -1%, -6%.
$100,000 x 3% = $3000 At the end of 2003 your West Michigan Home was worth $103,000
$103,000 x 4% = $4120 At the end of 2004 your West Michigan Home was worth $107,120
$107,120 x 2% = $2142 At the end of 2005 your West Michigan Home was worth $109,262
$109,262 x -1% = $-1,093 At the end of 2006 your West Michigan Home was worth $108,169
$108,169 x -6% = $-6,490 At the end of 2007 your West Michigan Home was worth $101,679
Average Sale Price $96,000
Average Price by Square Footage $110,000
You can tell that the price o f your Grand Rapids Home should be set somewhere between $96,000 and $108,000.
All rights reserved - Tami Vroma - Five Star Real Estate - Grand Rapids Real Estate & Grand Rapids Homes for sale.
Tami- Great post about the Grand Rapids Real Estate Market! Sellers in your area need to know that you are the agent for them:)
Great post, Tami! It's very informative and very well written! :)
Tami,
Good post for consumers in the Grand Rapids area!!! Thanks, Fran
Tami, Excellent explanation of what a seller should expect from an agent with regard to list price. Clearly they should choose you as their agent!
Hands down one of the best that I have read about this subject. Awesome job Tami and I know your local Grand Rapids consumers will appreciate it!
Katerina - Thank you!! Am glad you approve! I'd loved to hear what you think I should have done different! LOL
Debi - Thanks so much Debi.
Fran - Thank you - I aim to please!
Barb - Thank you - it was actually inspired by someone saying, "he just walked in and told me this is what we are listing the house for and couldn't even tell us how he arrived at it:.
Kris - Thank you - I think partnering with out sellers is the best way to go!