December 2020

FMV but is your price actually realistic FMV

Most people are reasonable and unreasonable at the same time. They are willing to sell for fair market value, the real problem comes with agreeing on what that amount actually is. It's not that they fully expect their agent to sell it for tens of thousands of dollars above fair market value. However, both sides tend to agree on this (agent and seller) – The other side is wrong on what they think the fair market value is. Both sides, want to see the highest sale price possible. One side has been in the property for a long time, knows it inside out and appreciates all the little things about it. They also know a little bit about the market and what is happening out there. The other side (the agent) has

List High – Sell Low

The natural tendency in order to get the highest sale price for most sellers is to ask for the highest list price that the realtor will list for and not have to fight too much. There are 2 issues with this, 1. The agent will list for a much higher price than a buyer will purchase for. We have less to lose, and our immediate goal is to get the listing, not to sell it. The term for an agent giving an inflated FMV is "buying the listing" because they are giving a high initial price to get the paperwork signed then following it with a systematic approach of price reductions to get the listing sold. It's a true bait and switch.  2. The highest price is almost invariably a byproduct of demand, and the best way to increase demand is to

Methods of Assessment

Out of thin air, gut feel

This is frankly by far the most common method that people use to assess their home value at first, They have heard whisperings of home sale prices in the past. Their friends or family have recently sold, and they know prices in their community are a bit higher or lower. The place down the block was listed at $X and the signs gone, so it is worth $X. On paper, all of these sound reasonable, but unfortunately, they throw things off from the beginning and people tend to LOOK FOR FACTS that will validate these things and disregard other facts that contradict it. Getting the Fair market value range right off the bat is critically important to netting the highest price. So, don’t disregard the facts to

Sellers tend to think this equates to fair market value and sale price (wrong)

First off, let's talk about the first critical error sellers (and even their agents) commonly make. It boils down to people associating the Fair Market Value, Ask Price and Sale Price all being directly tied together. They affect each other but are not tied, and they affect each other stronger in the reverse way of what people tend to think. You see people tend to believe that to get more for their home, they should simply ask for more. They tend to think that the way to increase the fair market value, is to ask for more. The fair market value range is the first determiner of what the home will reasonably fetch, but that amount is directly affected in an often INVERSE

THE MARKET, nothing has an effect on your home sale and sale price like everything going on around you that is OUT OF YOUR CONTROL.

Real estate pricing is a function of supply and demand. And supply is a function of how many people are interested in, and capable of, buying a home. This, in turn, is a function of employment rate (and within which category i.e. full-time, part-time, minimum wage, higher wages), population migration (population increasing, stagnant or decreasing), mortgage rates and ease of securing financing, and government incentives. In short, growth vs decline.

Biggest home on the block (regression/progression)

When it's your home, it's great to have the biggest, nicest home on the block, but not when your selling. The smaller

OK, so how do you get more money for your home? How do you increase the actual value of the perceived value if the fair market value range is the fair market value range?

Well, for one thing, talk to your agent well in advance about smart renovations. For example, 1 seller might be best to update their kitchen vs reno’ing it, by changing the countertop to a nice (but neutral) stone countertop with a current tile backsplash that melds the oak cabinets into a more modern style. Maybe the walls just need a refresh coat of paint in a more modern and warmer palette? Maybe the flooring needs to be professionally replaced so the wear and tear of the house are much less apparent. None of these items are necessarily that huge of an expense, but maybe they are

Myths of Getting More

• Improvements ROI
• Example NEW Kitchen….. OLD kitchen, NO kitchen
• $20k for 100ft well, $40k for deeper well

The way many people think real estate sales works is not really very accurate, I have had many people say to me things like - "Our agent had someone on the hooks but they let them slip by" or, "that realtor is known for underpricing homes" and even 'that realtor is my area specialist".

First off let's look at the truths.

1. You don’t need an “area specialist” to sell your home, although knowledge of the area is good, it is much more important when selling to have a “Listing/Marketing specialist” You see an “Area specialist” is more important for purchase than for sale.
2. The Listing agent is highly

The Objective of most Realtors ...

The objective of a GOOD agent is to get a listing agreement in place so the agent can get the home prepped and the marketing completed properly to get the home sold for the most money. And by the way, this is the objective of most realtors. They genuinely want to see you succeed in the best way possible. They will risk your disapproval by telling you what you NEED TO HEAR, regardless of what you WANT to hear.

But this is difficult to do for many, most realtors want to be people pleasers. There is a difference between a genuine people pleaser that wants to see great things for their clients and the deliberate chameleon agent who tells the client what they want to hear, painting a pretty good, but still believable

FMV — 7 Factors of Fair Market Value Range

1. Location
2. Size, Amenities
3. Condition
4. Market Supply
5. Market Demand
6. Ask Price
7. Marketing

Location. Location. Location

The old adage rings true when it comes to real estate. The largest contributor to the value of your homes is dependant on “WHERE THE DIRT IS”. A small, modest home in a high-value neighbourhood is likely worth more than a large overdeveloped home in a low-value neighbourhood. A home on a ravine, is worth more than the same home across the street with no ravine (and no views).

Size and Amenities

Generally speaking, if 2 homes sit next door to each other, of the same fit and finish but different square footage, the larger home will be worth a bit more in total, but

Do you take the blue pill or the red one (How does he word it?)

In the last article, we discussed critical mistakes sellers make that cost them money on their home sale.

In this issue, we're going to discuss the pricing matrix.

The pricing matrix is the relationship and the cause and effect that the 4 different pricing points have on each other.

First, we’ll define these points then look at how each interacts with the other.

• FAIR MARKET VALUE (FMV) (range) — a price that appeals to many buyers and causes a sale within a reasonable time.
• ASK/LIST — the initial and ongoing pricing that the seller sets to attract potential buyers
• OFFER/VALUE — what it is worth to a specific buyer, and where the negotiation starts
• SALE PRICE — the