FIRST Scenario of HOUSE FOR SALE!

*hey i got my Wings!*

Ok, alot of houses in my area are Ranches, or Ranches with additions on them, or a Raised Ranch.

I Have: a 32year old, a quad level, Raised Ranch, 4 bedroom, 2 bath, a kitchen, family room, full basement, a 2 car garage.

Granite kitchen top, new pantry cabinets, new appliances (stove and refrig, microwave, dishwasher).
New Hardwood flooring in kitchen.
Family room w fireplace,
New high efficiency furnace and central air.
Bathrooms are redone.
Furnished Basement half carpet and half concrete w Bar..

Lot size is 30x125

There are several houses in the area with the same size lot but come with either less ammenities or about the same.
Other Prices in area are: $315,000, $324,500
$345,000, $479,000.

I bought the house for $240,000 brand new, with a 30year fixed mortgage in which i recieved a 106% Loan (cause i have SUCH GOOOOOD Credit..lol). I Feel that a Starting Price of $400,000 would be sufficient to all the effort i put into this house.

Im looking to Move to California. Im sick of chicago politics.

Now, Rina, go through this and tell me if i made any mistakes, and you have to list what your next few steps are..

ps. Please be sure to Explain all Abbreviations for terms.

Are the prices you list, sale prices or list prices? We would need to know what the sq footages are on the comps. Rina will need this information to advise on list price. Anita will need to know how many days on market for the comps. Are we to assume that all the comps are 4br/2ba? What is the sq footage of the sale home? Because we will not be able to view the home ourselves, what upgrades and repairs would be necessary to bring home up to top market condition? How long has the home been on the market? There may be more questions. This is all I can come up with now.

Al

so this sceanrio is just a example for right us right?

well, i think all the prices are list prices,
alchristman i think around 2,750sqft for all the houses including mine, would seem about right.
Im not sure what "Comps" are. please explain.
My house is new to the market, and all the others have been listed for about a month.
This house is Market Condition, everything is all brand new and installed and ready togo. No repairs needed. (unless you bring someone in and they say that the roof and windows need to be done.) does market condition mean something else? please explain.

Yes This is Just An Example based off of phamplets ive collected around my area.

Here is an informational link to what a CMA is: http://homebuying.about.com/od/sellingahouse/qt/062107CMA.htm

Comparisons...well see if that average sq can do anything.

Comps are comparible sales. They are actual sales of simular properties that are close to each other. Prefered to be within a mile. Square footages should be within =/- 200sf with simular number of beds and baths and simular lot sizes. Part of the training would be determining ARV (After Repair Value) by taking the comps and averaging the price/sq ft, then multiplying by sq footage of subject property.

It's 8pm here. I just got home from painting at the farmhouse. I probably won't be able to get on here to really participate 'til later. AND I will have to give this some thought. (Don't want to mis-advise my client. )
Remember, I am NOT a realtor. I normally let my realtor do her job while I do my investing job, so this might be a little stretch.
Can I let someone fill in for me 'til I can get back on? I don't want to hold up the show. But I shall return.

Rina

ithinkdiff, that's a good link. Thank you for putting that in.
Al, thanks for all the important questions. (I might be coming to you for some realtor advice, off the record. )

Peter, here is the most important paragraph from the link ithinkdiff gave us concerning your comps (comparable sales).

"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."

And even though it says 6 months, right now a property could have dropped significantly in value within that amount of time, even so much as having lost half of it's equity. So we should go with 3 months.

Peter,
Are you saying you bought the house new 32 years ago for $240,000? (I think you got ripped off) jk (just kidding) Do you want to change one of those numbers?

So the square footage is 2750 sq ft (btw, the lot seems awful tiny for the size of the house)

If all 4 of your comps (comparables) are the same size and have SOLD for $315,000, $324,500, $345,000, $479,000 (quite a range) your house's value would be $365,875 or $133 per sq ft.
(Take the average of the 4 prices ($365,875) and then divide by the average sq ft (2750))

OK, here's where I'll need help. I have no idea what the BPO (Broker's Price Opinion) or CMA (Comparative Market Analysis) formula is. Al, is there a formula?

As far as the rest of my job: marketing, paperwork, dealing with buyers agent (she's a friend of mine, so should be a piece of cake. LOL!! go easy on me.), etc. I guess that is coming up.

Peter, there's a lot of info a person can look up on their own in a real-life scenario. The hard part about this feaux one is that SOMEONE has to make everything up and have it make sense. Let us know if you want help with popping in any info, OK?

Rina

next?

well i didnt want to change the age of the house just in case i might have made a mistake with how the loan might have worked considering that im tyring to create a perfect scenario where the loan is paid off and the house is ready to sell...Rina- your not holding up the show, i preferably want to take this slowly just so i learn the basic process in a traditional sale is..

but a faux deal is a faux deal, im hoping we can finish this with what we got.

Ill Accept the New Price based off the Comps of: $365,875

Maybe we can continue the same house for a second scenario with either a Foreclosure circumstace, or a short-sale circumstance for the next one, that way we dont have to start from scratch.

Off The Record: There is a "Real" house that has been built in 2007 in my neighborhood with 3200sqft, thats being offered at $575,000.

A CMA to me, lists homes in multiple catigories. Those catigories are: Active-for sale now, Pending-under contract, but hve not closed, Sold-property has transfered ownership, Expired-listing contract ran out without a sale, and Cancelled-listing contract was cancelled. The CMA report will list all the homes in each of these catigories, with addresses, SQ FT, Lot size, year built, list price, days on market, sold price(sold listings) COE date(sold listings). My cma reports will also show averages for sq footage, list price, sale price, and calculate price per sq ft. This number will be simular to a drive by appraisal. There is no consideration for condition or type of home.

In a BPO, the agent looks at sold properties and calculates a value. But the agent will also go insude the home and make adjustments to the value based on improvements and/or repairs needed.

Hope this helps, Al

Peter, sorry I won't have a lot of time to post this next week. My daughter is getting married next Sat., Oct 4th, and my investor just closed (or at least I THINK it's final) on a property today that we need to start rehab on. I'm now totally swamped.
I'll do what I can, or you can choose someone else to fill the role (Awesome real-life realtor Al would be perfect). Thanks.

OK, I believe we have determined the value. $365,875. I think I would round that up to $392,500. Why, I don't know. lol Al?
First I would get you to sign an agreement saying I will represent you as the seller for such an such amount of time.
Next I would advertise it everywhere I can. MLS, Craigslist, newspaper, sign in the yard (hopefully I have a good buyers list started so I can on the good deal.)

ill see if Al wants to represent both the sellers agent and the buyers agent, then he can get an imaginary 6% commission..lol

Al, would you like to do the honor?

Rina, I seem to remember a post where you said, once involved, always involved. Would we need a restart? Anita has working hard at her role as an Agent, and we don't have a buyer.

(you know I was kidding when i wrote that about not getting out.lol)

Anita hasn't posted yet as agent (she was seller in the first one). And I'm obviously experienced as buyer, not agent. But if you insist, I'll give it a shot. So, do I still start?

Peter, I'm guessing you are both the seller and the mediator?

I'd like to work for you and get your house sold as soon as possible(or is the relationshipalready established?). Do you have any objection to me being your rep exclusively? I've just got a couple of things for you to sign.

thrilled to be your representative,

Rina

P.S. Al, I'm really gonna count on you for things I don't have a clue on, so we don't confuse people, OK? I don't have time to actually take a crash course this week and literally get my license!

I would like to get started right away on advertising your home. The details you gave are a great start, but since I cannot come to see it myself, I'll need to get some more info from you. Can you tell me which part of Chicago you're in? (If you can give me a nearby real street address, I can do some research. PM me if you want.) If you are not able to send pictures, could you describe the surrounding area. And are you quite sure on the lot size?

How are things going for you today? I'm sure you and the family are anxious to get this show on the road. Have you been looking at places in California? Pretty different than there in the windy city, isn't it? Well, I promise to do my best to get you out to that warm weather before you have to go through another freezing winter in IIlinois. LOL
(By the way, where am I? Chicago? Or am I doing this from WI?)

Hope to hear from you soon.

Lorina
"We'll Take You There" Realty

P.S. (Anything in parenthesis is me as ME.)

i guess ill pm you if you really want to get detailed info on my surrounding area, but its good that ill tell you because there is ALOT of Real homes for sale here.. i mean ALOT..theres at least one per block.

just make sure you add me to your network of friends so maybe i can learn something if you every wanna do buisness down here and i can learn something.

You want to see something interesting? Check out your PM. The real house address you PMed me in the neighborhood you're talking about? It has gone up in value by $153,803 in a month!! Do you see how the graph had gone down, down, down for the prior 24 months, right until the middle of July and now it's going straight up? I would take that as a DEFINITE UPSWING in your area! I imagine that you have a great opportunity for flipping some properties. (That www.cyberhomes.com is a great site. I wish I could zoom into that house like I can here, but isn't that cool looking down on the actual neighborhood?)

Anyway, in the fake world, I think we're about to do well on selling your scenario house if we go by those statistics. (And, no guys, I didn't make it up. He's really in a good spot.) I think we should go with your first suggestion for price, just a tad under $400,000. Let's make it $398,500. I think we can get that price. We've just got to get the word out to the right buyers.
Here's the ad I will place in the MLS, your local paper, on Craigslist, and in the Chicago "Parade of Homes" Newsletter. If you would like any changes made, let me know:

****************************************************
Move right into a gorgeous 4bdrm/2bath quad-level ranch. This home is new on the market and will not last long! Many updates have just been completed, and seller is asking UNDER market value! Prices in this up-and-coming neighborhood are starting to climb, so now is the time to buy!

This home features a stunning kitchen with granite countertops, new pantry cabinets, new hardwood floor, and brand new appliances (range, refrigerator, dishwasher and microwave). You will also find an inviting family room with fireplace, 2 completely remodeled baths, and a full finished basement with bar and furnishings! 4 large bedrooms round out this family home. A new high-efficiency furnace and central air have recently been installed, as well. With a large 2-car garage and manicured backyard, this is a property to be sought after! A steal at $398,500.

Call Lorina at 555-555-5555 for a viewing today.
Take a virtual tour at www.hometours.com

We’ll Take You There Realty
"Love where you Live"
**********************************************

Happy to be of service,

Lorina

I was unable to check out that website as of right now, the computer im using isnt the fastest. but yea there are alot of for sale signs up around the neighborhood.

Rina- That is a Very Appealing explaination of the house you have! I like it alot!

I Belive its Al's turn now.

I would personally like to jump ahead and see what the steps are when a buyer is alligned and ready to close. Like- what kind of deal does the buyer make with the seller, or do you get immediate cash from the buyer upon finalizing the deal?

As an investor, I see nothing in that ad that would lead me to believe that the seller is motivated. It is new to the market, and apparently is not in need of repairs. But I think that area might be good for rental properties. I would like my agent to see what the rental market is like in that area and contact the listing agent to get some additional info.

Anita, would you please contact the listing agent and see what you can find out. Also what do you believe I could rent this property for, how much competition is there, and how long are rentals listed before getting leased? Is this property listed below value and if so, how much?... Thanks, Anita, I look forward to your reply.