What is a Market analysis, otherwise known as a Broker price opinion?
There is never any obligation in your receiving a market analysis from me. I provide this service frequently to curious homeowners, customers, and clients because it is a such critical part of determining if you even want to sell. Everything I do is low-pressure and is driven by professionalism.
One of the main responsibilities of a full service Realtor is helping homeowners get a very good idea of where their home stands, and what price they might anticipate when selling. Interestingly, the report that we provide to accomplish this is often referred to by different names, depending on what market you are in. Denver tends to refer to it as a Broker Price Opinion. In Colorado Springs you are more likely to hear the phrase Market Analysis. The reason for this relates to something that is very important. Brokers have to be extremely careful when relating what your home is “worth.” Therefore, whatever name is used to describe the report, the most important thing to remember is what we hope to accomplish in this exercise. The bottom line is the utilization of a process in which we fairly compare your home to others that have recently sold, and provide a range of pricing for you to consider.
(Just like most articles on this site, you can get the basic points in the first few paragraphs, and then fill out the form below, or please keep reading for deeper insight on this important subject.)
In my opinion, it is a good idea to think like a realtor, in order to best understand a possible price range for your Colorado Springs, Castle Rock, or Denver home.
An agent’s first questions are: when do you need the information and, without sounding nosy, why? Sometimes homeowners simply want to see where they stand for the purposes of long-range planning. On the other end of the scale is a scenario in which a homeowner has just been notified that they are being transferred to another state, and now must have a very accurate perspective on price as quickly as possible. They’ve often been to Zillow or one of the other sites out there, and therefore have a basic idea. Some of these sites are decent at assisting in this situation, and are getting better. However, there are always accuracy concerns anytime an automated valuation tool such as this is used. This complexity is a simple fact of life, that even impacts us agents if we chose to employ our own automated tools in specific situations. As a result, a professional such as myself would never rely solely on any automated tool in uncovering where your home actually stands. One common example of where a mistake can occur in an automated tool is when many different ages of similarly priced sold homes are imported into a query for “sold dollars per square foot.” This is an issue in my example, because an older home with no upgrades would pull down the range of value that’s given out at the end of the process. There are many more examples of how the wrong data coming in can directly affect the quality of data coming out, and I’m confident you’ll appreciate the point. You may even be here because you are already aware of the need for a professional’s role in helping out.
How does it work?
There are two levels of how my report works. The first is, of course, a generalized property report that can provide a “big picture” view on how nearby homes compare. Even this initial report is superior to on-line automated estimates, but I don’t stop there. The second report is completed in greater detail, and it weighs your home on a more individualized basis. The way that I like to do this is to provide the first report based on extensive knowledge of all the communities and areas, combined with complete MLS data, and to a lesser extent automated valuation tools. It is important to point out that no closed sale older than 6 months can be used as the data is no longer relevant. This is the report that we will cover in our meeting.
Seeing the home, then adjusting and finalizing all the information
The second level of the report is based on actually seeing your home. This is the part where I am seeking as much value as we can find based on my professional experience. Let’s say, for example, that you installed 3/4″ hardwood floors throughout your entire main level accented with a natural stone entryway. Let’s also say that I happen to know that virtually none of the homes in your community have this feature. This is where years of experience make it possible to appropriately adjust the value of your home, as well as its marketability to get the absolute most leverage out of the work and money you have invested. On the other end of the pricing conversation we might discover that your home does not have some of the things that most sold homes in your neighborhood had. Don’t fret here. It is not usually justifiable to start ripping out vinyl bath floors and putting in tile, for example. Every situation is different and we can discuss the dollars and “sense” of leaving things as they are or calling the contractor. You’ll know exactly the advantages and disadvantages of both, right at the beginning. Clearly, getting an early bubble on all factors pro and con is important, and that is where the Market Analysis really shines. Unlike an “estimate” it is based on actual data and real life adjustments.
If you are interested in learning more about this, just give me a call. Or, fill out the form below, and I’ll get to work on putting the report together for you.