When calculating the price of a home either when you buy or sell in Metro Detroit MI…know the difference between Home Prices vs. Home Value-Driven Approach
Home Price Driven Approach
When we start the process for your Price Driven Approach we start with the Multiple Listing Service (MLS). This is a vague report based on other homes in the area, and your neighborhood based on square footage, finished basement, and garage size.
This report will include ~ Sold, Pending, and Active.
Scroll and find your City Sold Data Here. Modify Search and add pending and active to the status: Closed search. Also, compare apples to apples and work through the pull-down windows and add the criteria for your home’s features. You can also request a report from RPR (Realtor Property Resource) which includes homes sold in the MLS and homes sold privately. This report relies on the data from your neighborhood and surrounding area. It will use algorithm analytics to determine the Price Range. To request your RPR Report Here.
Lastly, we look at the Value-Driven Approach
Next, we need to filter what an appraiser’s opinion could be about value. Part of their mathematical modeling is a condition rating system. Depending on the condition and improvements will move the value up or down. The appraiser will review updates, features, and quality of materials used to determine Fair Market Value. Make sure you select a Realtor that knows how to use this approach.
Terms to understand for Price Driven Approach
Public Record Data: AVM- Automated valuation model (AVM). A service that can provide real estate property valuations using mathematical modeling combined with a database. Most AVMs calculate a property’s value at a specific point in time by analyzing the values of comparable properties. (Example: October of 2016 to October 2017 for 2018 Values). Your City or township uses this algorithm calculations modeling in their public data only to determine value ranges and averages.
Realtors Property Resource RVM (RPR)
RPR uses public data and multiple listing service data in their algorithm calculations. It will also give an AVM and RVM confidence score in the report.
With eh housing market shifting, pricing your home right will also determine how long it will take to sell.
Prepare a Pricing Strategy
Have you ever wondered why agents give you comps in your neighborhood based on price alone? They show you a bunch of houses that sold and they are comparing an apple to an orange when it comes to pricing. That’s because they are using Price Driven Approach only.
Why do Prices Differ in the Same Neighborhood?
This approach is where agents base what you can sell on a fixed price based on “other” homes. To me, this is an inferior and outdated approach. Most realtors use this approach when they discuss the price, and what they would list the property for. Yes, there have been a lot of changes with appraisal rules. An appraiser can use the following to name a few improvements to add VALUE; Roof, Windows, Kitchen, Bath(s), mechanical, finished Basement, lot size, garage size, location, and more.
Home Value Driven Approach
Price is what you pay, Value is what you get”
No two homes are EXACTLY the same. That’s why it is so important to review Price Driven Approach to get a range. Then take it to the next steps regarding Value by adding or subtracting features and conditions. There are two parts to Value.
Part One ~ Prepping Value
Looking at the property through the eyes of an appraiser. What information will they need to decide the condition rating of the property? What does your home have that other homes didn’t that can add value. Is the basement finished, does the basement have a full bath vs half bath or no bath at all, has the following been updated/renovated; kitchen, baths, windows, roof, paint, flooring, carpet, and mechanicals?
In the past few years, part of the value the appraiser can add is the type of materials used. Did you upgrade your materials or use builder grade. It takes a lot more than just using the price driven approach work to determine a range of what you could sell your home. You don’t want to miss out on Value. You can request your Home Value Report Here.
Part Two – Marketing Your Home so Buyers See Value not Price
What value do the buyers see? Is your home in move-in condition for them? Each buyer is different, and that’s why I strategically place my client’s property to stand out from the competition. I do this based on the highest level of marketing on multiple platforms and by hitting emotional triggers with prospective buyers. What I’ve noticed…. buyers decided to buy based on emotion, they are more likely to make a better offer. This isn’t done just by visuals alone when they walk through the home for the first time. It starts when they first visit your home online and read the home’s story. I’ve prepared ways to market your home to stand out so you make more when you sell. How to Make More 💰 When You Sell
Buyer’s Need for an Emotional Attachment
Once buyers can visualize themselves they start working to FEEL the house while viewing the property online. Your storyboard is crucial, this is when a buyer can openly see your house as their home. Staging at this point is important, we don’t want them to see your property as a guest in your house. The buyer needs to start the emotional process, not a logical one. “ Logic makes them think and Emotion makes them act” This is the 1st showing of your property to prospective buyers…shouldn’t it be the best? When they schedule an appointment this is their 2nd showing. The buyers are visiting the property to confirm their feelings about making an offer. To learn more about MORE Influence = MORE 💰n their own story, and how it will work for them and their family. I need to get them t
Step #1 ~ Metro Detroit Real Estate Home Prices and Trends by City
💥 Important 💥 This is Where You Track Home Prices and Housing Inventory Levels (Supply and Demand) updated monthly by the 15th.
It has everything you need to determine the Market You’re In and review your city’s 3-year live trends regarding home prices. Better yet, you can even review Sold properties and not rely on the online estimates. I’ve provided additional videos regarding the housing market and how you can benefit from all the tools on this page. Whether you’re selling or buying real estate now or later. I recommend keeping up to date and protecting your real estate investment. It’s essential to follow the Housing Market Trends for Metro Detroit and know The Market You’re In, and it’s the only way you’ll know your true Negotiation Power.
Impact of Price
We are going through some crazy times and I’ve added some valuable insight from CoreLogic’s latest U.S. Home Prices Insighs July 2022
Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price their house so that demand for the home is maximized. By doing so, the seller will not be negotiating with a buyer over the price, but will instead have multiple buyers competing with each other over the house.
Bottom Line Home Prices vs Home Value Driven Approach
It’s important to take the time to review all the data to determine the price range you choose to list your home for sale. Once you determine the range, the next step is to test the Market Your In. Who has the better negotiation power you the Seller or the Buyer? We’re here to help you look at all the puzzle pieces, so you succeed in selling your home for MORE 💰.
Step #2 ~ Your 🔑 To Home Selling and Buying Success ~ Safe e-Guides
💥 Important 💥 Your Guides also have educational videos and links regarding where home prices are heading, mortgage rates, Housing Market Trends and more.
Watch Video for Sneak Peak
Don’t muddle through the Home Buying and Selling Process. Buying a new home is a dream for all of us, and it’s an emotional and stressful process.
It also involves the most significant financial transaction you probably will make in your lifetime. Your Buying Guide…will walk you through tips, strategies, and how to understand the numbers to strengthen your negotiation power.
Your Selling Guide…It will help you work through the selling process using the latest in high-tech market tools, so you make MORE Money. Our goal is to separate your home from the competition, and keep Buyers focused on your house. The Selling Guide is very detailed and works step-by-step, so you’re guaranteed Top Dollar for your home.