prelisting brief for an atlanta home for sale

8/8/2019 PreListing Brief for an Atlanta Home for Sale

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This report contains the important information that is

provided to every potential listing client:

How much to expect?

How long might it take?What happens if it languishes?

All supporting data is not included in this example, it is

when presented.

Note that in this case, the owners elected to list higher

than suggested, you will see two follow up briefs

addressing that issue.



After review of both active and closed sales and with consideration given to the current and anticipated real

estate market through late ’10, this is what I expect and how I propose to sell your home.

The major challenges are obvious (in no order): • Lackluster economy.

• Diminished pool of qualified buyers.

• Buyers expect

major

bargains

in

this

market,

even

though

this

isn’t

always

happening.

• Market continues to correct; short sales and bank properties are present.

• Increased lender scrutiny of submitted contracts and buyers.

• Reduced pool of reliable comparables for agents/appraisers/buyers/sellers to accurately and

confidently ascertain value.

• This home will be in the upper value tier for the Grant Park area. While it has reason to be there, we

should anticipate an increase in marketing time of 120‐180 days.

Actions required to mitigate the challenges (in no order): • Accurate

initial

price

and

adjust

if/as

needed.

• Demonstrate the value in this property – condition, location, amenities, etc.

• Market to the most likely buyer and enforce the things they want – location near the park, dining, in

town conveniences, historical character and charm of home and area.

• Have evidence prepared to support price – comps for appraisers, agents, buyers.

• Prepare and maintain home as best as possible.

• Market heavy; expose it where buyers/agents will see it, strong narrative to illicit interest.

Major cautions (in no order): • Initial list price has to be reasonable and one that will attract legitimate buyers.

• The Fed has stopped buying mortgage backed securities. While rates have been held in check, they are

moving slowly higher and this is expected to continue.

• Fed buyer incentives end 4/30; properties must be contract by then and closed by 6/30. Reduced buyer

activity is expected after 4/30.

• Price reductions may be required if the market fails to support the price with physical visits, serious

buyers and offers. We will know after the first 21‐28 days if adjustment is needed.

Suggested course of action: • I would suggest a list price of $425.000. This is a competitive price that will fall within the “reasonable”

group when all active listings are considered. You do not want agents running listings and removing the

home right off the desk top due to price. This is a price that I believe will attract buyers that are

interested in getting inside of the home. The goal is to make your home the one others are compared

to – the “go to house”.

• A competitive price is critical:

o This is not a market to “test” pricing – especially with the incentives ending in 32 days.



o The number of qualified buyers has been significantly reduced over the last few years – with an

increase in listings. Price is the main thing buyers are looking at.

o Most interest is when the home is new, an adjustment after is likely to be lost in the mix as the

home remains on the market.

o Appraisals coming in below sale price are more common these days. If that happens the best

case scenario moving the price down; worst case can be loss of buyer confidence and loss of

the deal.

• The price must generate physical visits. Emotion sells homes and this is especially true here as the

locational desirability and charm of the home are the major strong points and those can only be

exploited by getting buyers inside. Photos, narratives and discussions are good, but nothing compares

to buyers personally connecting – and that is wholly price driven in this market.

• Once the initial price is determined, activity will be reviewed after 21‐28 days. At that time we will

review buyer feedback, agent comments and current data and trends. If adjustment is needed, this will

be discussed.

• Given the 4/30 expiration of the federal incentives, “spring” in the Grant Park area and the typical

increased buyer activity at this time of year (albeit diminished compared to past years) I think it is very

important to get the initial list price as accurate as possible.

What to expect: • Priced at 425,000 I would expect a good amount of genuine traffic – not just lookers.

• You will have “opportunity” buyers that make perceived low offers; this is the nature of the market and

the mindset of buyers at this time. We don’t take this personally and treat every offer as one that can

be successfully worked.

• Most activity will be in the first two to three weeks; obviously it will attract most attention when new.

• Buyers will

ask

for

closing

costs

and

are

likely

to

ask

for

items

such

as

warranties,

termite

bond,

survey

or other things. They will also ask for remediation of issues noted during the inspection – I keep those

limited to code and safety issues. I’ll walk you through all of this and keep agents from overreaching.

• Given that the federal incentives mandate homes be contracted by 4/30 and closed by 6/30, you can

expect that date to broadly set a rough time frame. If we fail to contract by 4/30, then the incentives

won’t apply.

Next steps: • Verify your desire to list and sign appropriate paperwork. Total commission will be X%; listing period

will be

150

days.

• Establish initial list price.

• Discuss positives and negatives of the home so we can prep the narratives, order photographer and

prepare all marketing materials.

• Once all is ready, list home in the FMLS/MLS and employ the standard marketing procedures.

• With the 4/30 deadline in mind, I strongly suggest getting the home up on the market ASAP. Typically,

the photographer works on a 2‐3 day lead time.



Data Reviewed: The current market has to be viewed from both the historic side (closed sales) and the present side (active

listings); an added variable is the economy and current real estate environment (underwriting, loan approval

process, consumer confidence, appraisal changes). The objective remains the same, to place the home in the

best possible position to be recognized and purchased by a motivated buyer.

In

this

case,

the

attached

data

shows

the

group

of

homes

that

I

gave

most

consideration

to,

all

are

in

close

proximity to the park. As the market is best indicated by actions of buyers, sold comps are strongly

considered. Key points on the sold comps:

• All selected are 4 bedroom described as renovated with a price bracket between 375K‐475K

• 4 of the 6 have 3 full baths, 1 has 4 full baths and 1 has 2 full baths

• All have closed since 07/09 with 1 closed in 1/10, none since

• Your home is noted at approximately 2300 square feet (SF). 3 of these homes approach or exceed

3000SF, the 3 others are between 2400SF‐2650SF. Measuring a home continues to be a source of

controversy in the real estate world but it is logical to say that these comps are at least as large or

larger than

your

home.

• All have off street parking, at least 1 has a two car garage.

• 2 are describe as having basements (subjective here).

• Sale to list price ratios run between 87.9% and 94.5% with an average sale price for the group of

$412,300

• Average days on market is noted as 123 but that does not include relisted homes. Note 3 of the homes

had marketing times well over a year and a half.

• Competing data for the Grant Park area (sold homes 375K‐500K) shows a two year YTD decline of

4.25%+‐. This is a narrow focus of just this price range.

Key points for the active comps:

• 3 to 4 bedroom homes between 375K‐475K and in the same competing setting were reviewed.

• Of the 6 between 400K‐475K, 4 have 3 full baths with 2 having 2 full baths

• Overall square footages are closer to your home, the 2 highest priced homes are larger

• All have off street parking, 3 are noted as having garages.

• 2 of the homes are noted as having basements, 2 others as having “high crawlspaces”.

• All are noted as being “renovated or updated”, 3 have been built since 2000

• One 1 home

has

been

recently

listed

(2/10),

3 have

been

listed

within

the

last

4 months

and

the

others

have been listed for longer.

I selected the price point of 425,000 because:

• Average sale price for the sold group is 412K, 2 comparables have closed above 435K. Both of those

closed in ’09.

• Only 1 closed comp had 2 bathrooms.



• If you apply the 4.25 decline to your purchase price the resulting number is 423K. While nothing more

than a simple application of data, buyers and agents will do this.

• I see several of the active homes as overpriced given the sold data. I think your home best competes

against 429 Oakland, 740 Confederate and 499 Atlanta. The last two are 5+‐ years old with similar

construction. 499 has a large 2 car garage plus above area plumbed for an in‐law or office, 3.5

bathrooms, double porches, gated entry and 2300SF+‐. 740 has a 2 car garage, 3.5 bathrooms, finished

basement, gated entry and 2100SF+‐ (excluding basement).

• From an appraisal standpoint (using paired sales analysis) we can broadly assign a minimum value to

the garages of $6,000 and a full bathroom $5,000. The basement will also of course require

adjustment.

• The other variable is that we’re dealing off list prices for those two – that is just an opinion and not

market validated, it is a certainty that those will not be the final sale prices. A glance at the closed data

demonstrates the expected reduction.

• Using the ratios and list prices, 499 Atlanta has an expected sale price of 425,250 and 740 Confederate

has an expected sale price of 415,705. That is before adjusting for differences noted above.

That is

the

data

side

of

the

work

up.

As

real

estate

is

also

heavily

influenced

by

emotion,

the

objective

here

is

to get people inside. I touched on that above but at the end of the day, if it’s not priced to get the door

opening, it is not going to sell. If they don’t get out and see the setting, the home and the immediate area, we

will be lost in the mix. I feel that given the characteristics (bath count, size, parking) that it will compete best at

the 425,000 price, I don’t see it competing effectively at a higher price.

Understand as well that if the doors blow off with traffic and offers that you are not compelled to give things

away. We will negotiate close, but we first need to have something to negotiate – and that comes when

bodies come through the door.



5/5/10 Update Well the house has been on the market approaching 30 days and the results have obviously not been good.

I’ve chatted with a few agents that I know and have done business with that work in and around the area; I’ve

asked them for opinions. The consensus is that while it presents very well, it’s priced too high for the current

market. We have given the idea of overlisting an opportunity; it is my strong advice to reduce it immediately.

As

you

recall

when

we

initially

met

and

during

subsequent

chats;

the

three

keys

to

selling

in

this

market

are

price, exposure and appeal. I know from the phone/email inquiries that exposure and appeal are good – the

comments are very favorable and the home is out where buyers and agents are finding it. When I get inquiries

I always chat them up and encourage a visit, therein lies the breakdown. Agents see the same data that you

are, that data doesn’t support the current list price. Obviously the best indicator of value is the market, and to

this point we’ve had no folks through the door.

I’m recommending that we move the price to at least where I suggested that we originally start – 425,000.

This gives us a bit of separation from the 450K+‐ crowd and makes us a bit stronger in the 425K+‐ arena. My

concern is the home getting stagnant and lost in the inventory; the homes currently selling in this market tend

to go

in

the

first

4‐5 weeks.

Please review the attached data; it’s not significantly different than that originally presented. The bottom line

is that three comparable homes in Grant Park have sold between 400‐450K since Oct and one since Jan, we

need to be cognizant of the data to compete effectively for those few buyers out there. Price is the issue and

while I know it’s a hard call, if the home is to properly compete the market is telling us that it needs to move

down.

Please review and give me your thoughts –



6/29/10 Update I reviewed the initial assessment and marketing plan completed when we listed on 4/12, at that time I

suggested a price of 425,000. Since listing we’ve been above that and the result has been minimal activity.

That was a pretty thorough work up, much of it remains appropriate. Things have slowed since listing and the

price that you set is going to determine if the home sells.

Attached is a look at the current data (since 1/10+) for 4‐5 BR 300K‐500K homes, you’ll note just two sales

since 01/10. Note as well that the number of listings has increased dramatically since spring. The expiration of

the fed incentive has further subdued things, we’ve seen a demonstrated slow down in buyer activity.

The limited feedback we’ve heard on your home centers on the lack of a dining room, one bath upstairs and

lack of a room that can be a den/office. Some have commented about the availability of new homes in the

area as well. The feedback is consistent with trying to compete at the higher price point with homes that will

tend to offer more; you cannot effectively compete. The home has to be priced where it will stand out and be

competitive; the buyers need to get in to see the features.

While I know you don’t want to hear this, if the home languishes into the late summer it is likely to sit through

the winter.

If

the

objective

is

to

sell

it,

then

it

needs

to

be

well

priced

now

while

rates

remain

low

and

there

is

a modicum of buyer interest due to those rates. When they increase, I think we’ll see it quiet into mid ’12

when the election will bring out all of the yapping about the economy again. The challenge here is that the

home has been out there a while so buyers/agents will need to “find” it again. Vacant homes breed trouble

and the prospect of a home sitting empty in a market that isn’t going to have a substantive rebound any time

soon has no upside.

I would suggest moving the price to $414,900. That will put you against similar homes and should increase the

looks. Note that there are homes at the 390‐400 range that appear to compete well and that buyer’s are not

just focused on Grant Park – you’re competing with other areas as well. You can hold close to that price, you

don’t

have

to

give

away

everything

in

negotiation,

but

you

have

to

have

something

to

negotiate.

I

heard

the

groan, but at the end of the day you can see the data and you know what the market has done since you

purchased the home. There are few pending and two sold comps since January, of those under contract we’re

seeing about 20% fall apart for various issues. This almost certainly means bringing money to the table but

given that no one expects any type of turnaround it might be best to close this chapter if given the

opportunity.

Have a look at the data, consider my suggestions and let me know your thoughts – thanks

Hank

prelisting brief for an atlanta home for sale

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