Monthly Archives: November 2009

How to Select a Comp

Posted on November 30, 2009 by | 1 Comment

How does a Realtor figure out the best price when selling a home? How does a seller know if a home purchase is a good deal? Comps.

Comps, or comparable homes, are used by Realtors, sellers, buyers, lenders and appraisers to determine a home’s value. Comps are pulled for both homes currently on the market and recently sold homes.

But what data is included when considering comps? How do you know if you’re comparing “apples to apples,” as they say? These are the factors you should consider:

Price – When determining a home’s value, it’s important to look at the final sales prices of similar homes that sold in the past three months (not just the prices that homes are currently listed for). The final sales prices show what such a home could actually sell for in the current market.

Age of house – The age of a home is important, as the potential need to fix major items such as a roof or plumbing should be taken into consideration.

Features – Also look for the presence or absence of similar characteristics, such as chimneys, decks, walk-in closets and oversized bathtubs. And don’t forget about upgrades. Even though a house may be 20 years old, the insides may not be. Did the previous owners renovate a kitchen to include today’s hottest features? Were new energy-efficient features installed throughout the house (such as appliances and insulation)?

Size – This includes the number of bedrooms and baths, additional rooms such as a study or playroom, number of garages, and lot size.

Square footage – Cost per square foot is an important measure in determining a home’s value. For example, if your home’s value per square foot is $250 and the average per square foot of nearby similar recently sold homes is $275, it shows that your home is valued less per square foot than nearby similar homes.

Elevation features – This includes brick, siding, gables, and more. Brick homes are typically worth more than others.

Foundation – Is the home built on a basement or slab? Homes on a basement are typically valued higher because there is more room for expansion.

By analyzing the comps – including the current competition and actual sales prices – sellers can appropriately price their homes to make them an attractive option, and buyers can know that they’re getting a fair deal on a purchase. A Realtor can help buyers identify home sales that are truly comparable and interpret the information about them.

“How to select a comp” is part of NRT’s podcast series.  To hear this podcast or another podcast focused on home buying, please click here.

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Posted in Bank Owned, First-time homebuyer, Real Estate

3Q2009 Quarterly Review of Metro Atlanta just released!

Posted on November 20, 2009 by | Leave a comment

By: Brad Horner

The Coldwell Banker NRT Development Advisors’ 3Q 2009 edition of The Development Advisor, the company’s quarterly review of the metropolitan Atlanta residential market, has just been released. This report utilizes data based on transactions that closed in 3Q09 and compares it to that of 3Q08 as well as 1Q09 and 2Q09. We have compiled much of our information from our proprietary Universal Data Base, a system that pulls data for the entire metropolitan Atlanta market from both FMLS and GAMLS, deleting any duplication.

 Overall,  3Q09 performance demonstrated a continuance of the trends we witnessed during 2Q09, demonstrating  significant improvement over 4Q08 and 1Q09. During the third quarter, several key indicators suggested the beginnings of a possible stabilization in the market, while other data revealed a market still very much under pronounced stress. Absorption levels increased for condo/townhome product, but decreased for single family homes. Resale price increased slightly, while price for new construction showed a continued decline. The pressures of high unemployment, difficulty in obtaining a mortgage, foreclosures, and short sales continued to play a significant role in sustained market volatility.

On the positive side, the $8,000 first time home buyer tax credit, historically low interest rates, and the second highest affordability index on record have combined to encourage homebuyers to move from the sidelines and take advantage of home ownership. The extension of the tax credit and the introduction of a credit for current homeowners should bolster sales volume through the winter months and into 2010, though sustained levels of foreclosure activity will likely keep a lid on any significant increases in average sales price.

 For the 15-county metro area, 3Q09 total absorption was down 10% compared to 3Q08. However, quarter over quarter results showed a general continuation of 2Q09 market performance. Compared to 3Q08, resale absorption was down by 6% while new construction declines exceeded 26%.

 When compared to 3Q08, the fall in average sales price continued to be more pronounced in resale transactions versus new construction, primarily due to short sale and foreclosure transactions.  However, new construction will likely close the gap in the months ahead, as aggressive pricing strategies implemented by developers and banks during the second and third quarter begin to show up in closing data.

 With building permit issuance at continued historic lows, 3Q09 combined multi and single-family inventory levels remained well below 2008 levels.  Reported new construction inventory levels were 43% below 3Q08 figures, and ended 8% below 2Q09 levels. While 3Q09 resale inventory decreased 15% since 3Q08, levels increased by approximately 4% over 2Q09.   Sustained high levels of unemployment will necessitate close monitoring of foreclosure activity throughout the balance of 2009 and into 2010, as this presents the greatest challenge to normalizing supply levels.

We hope you will find this  edition of The Development Advisor informative and useful.   The challenges of the current market are complex and require a multi-disciplinary approach, making it even more important to work with a sales and marketing partner that  possesses the ability to assess the current environment and anticipate future conditions. We welcome any questions that you may have regarding this report and the Atlanta residential real estate market.

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Posted in Real Estate, Sales and Marketing, Uncategorized

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Who Needs a Map?

Posted on November 11, 2009 by | Leave a comment

By: Leslie Williamson

As metro Atlanta continues to grow, so do our means for getting around the town – which certainly changes the home search process a bit for both Realtors and buyers. Funny to think back and realize that it wasn’t that long ago that to prepare to show listings, I would actually purchase a local map to determine the location of the listing and the easiest routes to drive to the listing. In desperate times I would even call to get directions.

Now we no longer need the tried and true map or phone call, as we can rely on the following:

 1) Google Maps will actually illustrate a map of listings

2) One flick of a button and Mapquest gives us easy to use driving instructions

3) GPS provides a voice that actually gives us instructions as we drive to the listing; in fact, certain GPS systems will even show you nearby Coldwell Banker listings

But as so many things are continually changing within the home buying purchase process – from the way we physically get to homes to the way we finance them – it’s nice to know that good customer service will always drive the sale. Oh, and my map is now framed and I have a GPS that I have affectionately named “Herb.”

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Posted in Real Estate, Sales and Marketing

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Good News! Home Buyer Tax Credit Extended!

Posted on November 6, 2009 by | Leave a comment

By: Christine Macrenaris

The ongoing discussion whether or not the government will provide an extension for the homebuyer Tax Credit is finally put to rest! The President signed the bill into law today that extends homebuyers and unemployment benefits.  While the first Tax Credit program of 2009 focused on first time buyers, the addition of the repeat buyers will free up the middle market by allowing homeowners to sell to first time buyers and allow these buyers to “move-up”.  Finally there is an answer for buyers who continue to ask “what’s in it for me?” Below are highlights of how the homebuyer tax credit will work:

  • Tax credit: Ten percent of the purchase price of a primary residence, up to a maximum of $8,000 for first-time homebuyers and $6,500 for repeat buyers who purchase between December 1, 2009 and May 1, 2010. First-time homebuyers are defined as people who have not owned a home in the previous three years. Repeat buyers must have owned their current home at least five years. The credit cannot be used for houses costing more than $800,000.
  • Deadline for qualifying: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.
  • Military deadline: The deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009, to May 1, 2010.
  • Income limits: Individuals with annual incomes up to $125,000 and joint filers with incomes up to $225,000 qualify for the full credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.
  • How to apply: Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.
  • New anti-fraud limitations imposed.
  • Cost: $10.8 billion.

Source: Bloomberg Press and Associated Press and confirmed information with the content of the Senate bill

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Posted in First-time homebuyer, Sales and Marketing

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