Real Estate Detailed Blog Proposal

Our group will be writing a blog about pricing and evaluation in the Fresno and Clovis real estate market. We will use the sources listed below to write our blog. Our group consists of Cheyenne Ison, Jose Guzman, and Mathew Curtis. A detailed outline to what we are writing about is below.

Evaluating and Pricing Properties in Fresno and Clovis

Thesis- Evaluating and pricing property is the key factor to how fast and efficient a home will be sold. When a person decides to sell their property, they need to come up with a pricing strategy that will get their home off the market quickly and for the equivalence or more of what they are asking for. In order to successfully price a property without under pricing or overpricing their property one might use the expertise of a Real Estate Agent.
An experienced realtor can direct a person in which way the market is flowing but most importantly can have the knowledge and expertise on how the demographics of the neighborhood or area are working. Jennifer Mitchell explains this in her article entitled: Above, Below and Between… “Individual neighborhoods have their own microeconomic factors to consider as well. Changes such as a new manufacturing plant to be built or changes in local zoning regulations can occur at any time. The key is for the agent to stay on top of the changes and for the seller to remain flexible and open to changes in strategy. Ultimately, your pricing method will depend largely upon your personal goals and comfort level” (Mitchell). Most of all realtors use what is called the competitive market analysis, which compares the property to similar property on the market or recently sold.
· Market data and graphs will be implemented here from the Multiple Listing Service and Fresno Association of Realtors.

Competitive Market Analysis

A competitive market analysis is the most used by realtors today, but; today’s economy makes it difficult to find homes that are of equivalence because the market is changing drastically over time. Since this analysis relies entirely on other homes on the market and those that have been sold previously, it makes it difficult to come up with a good price that satisfies the seller. The market in California and mostly in the central valley has made it difficult for sellers, due to the massive amount of foreclosures and short sales that they are competing with. “Future prices will depend of the number of foreclosures and interest rates. If the number of foreclosures falls and interest rates remain stable - we will see a rise in home prices. If we see a rise in interest rates this will lessen demand and prices may remain stable” (Hawkins). No matter the price of the original purchase, a competitive market analysis will not give the seller what they possibly are asking for but it can give them some positive cash outcome. Although this process is similar to an appraisal it has its distinctness, an appraiser uses their experience to estimate the property’s value while a realtor uses the market and comparables to set a selling price.

Pricing the Sellers Property

According to the book California Real Estate Practices, a realtor should focus on the property’s neighborhood, the property itself and the improvements that have been made to the property to allow him/her to select comparables in the same range.(Rockwell, 120) The neighborhood besides the property itself is what draws buyers to the home and gives a good estimate of the listing price. If there is vacant homes or lots in the neighborhood or if the home is next to warehouses or major highways, can affect how the price is set. The California Real Practices book mentions that a realtor should look at several specific factors that can gain interest on the property. Such as: Percentage of homeownership, vacant homes and lots, conformity meaning similarities of the homes and age, Changing land use whether or not the home is in the middle of changing from residential to other uses, how the land is shaped on the property, streets if they curve or are narrow (Rockwell, 121). Although the property can be the nicest in the neighborhood, the factors listed above can affect how the price is set. Most homebuyers today look at this to see if there is a possible future in the neighborhood or if the neighborhood will soon be abandoned. A good example of how the neighborhoods are priced can be seen in Fresno where many homes are being sold but there is a significant amount of empty homes in the same neighborhood that changes the prices of the current property. Another example can be seen on the trulia.com website where it shows that in a community like Bullard, from July through September 2009 there were 209 homes for sale, and 846 foreclosures that show that the quantity of vacant homes in a neighborhood was massive.
· Interview from Rosemarie Barrera, Realtor, will be included here.

Neighborhoods

Neighborhoods play a huge role on pricing, but after the neighborhood is studied the homes needs to be evaluated for a “ballpark” price. Examining the Property A realtor needs to study a home carefully to get a price or to be able to set it with similar homes. A realtor will look at the home in detail such as the age, size, and whether it was well structured when it was built. Most importantly the key factor of pricing is “ Number of bedrooms and bathrooms, the size of the kitchen, the presence of a garage, the degree of updating, the total square footage and the overall condition of the property rank high on most buyers' list of important factors” (Mitchell). Most people that set out to purchase a home a interested in a home that they can live in for years and grow a family in, so most look for a spacious house that fits all their needs. This is why most realtor examine the rooms, bathrooms and dining area to see if it is large enough to set a good price as in its comparables.
· Interview from Deana Wells- Appraiser will be here.

Comparable Properties

After examining the property, the next step for a realtor is to look for other properties that are similar enough, so that a price can be set. “These properties are called Comparables because they have the same or nearly the same characteristics as the seller’s property.” (Rockwell, 128). The advantages of using comparables are that the realtor and the seller can be aware of how the market is doing for homes in that similar category. It can allow them to see how fast or how long it might take the property to get attention. Everything that has to do with the current property may have similarities all around with other properties, which is why many homes in the same neighborhood have usually the same listing price with the exception of short sales and foreclosures. The use of comparables can set financing terms and conditions that can help the seller find the perfect buyer. Evaluating and pricing a property is one of the toughest factors to selling a house. This why many people settle to find a well-known and respected realtor that has experience far beyond others to set a price. Homeowners always want the most for their property and that is why there is little to no homes being sold by the owner on their own.
· Realtor interview from Tony Christian will be implemented here.

Sources

Appraiser Interview: Deana Wells

Above, Below and In-Between: How Real Estate Agents Price Properties. Retrieved September 29, 2009, from Associated Content: http://www.associatedcontent.com/article/813873/above_below_and_inbetwe en_how_real_pg5.html?cat=3

California Building Industry Association-Housing starts, afford-ability index, and general statistic info.

California Real Estate Practices. Bellevue: Rockwell Publishing, 2009.

Fresno Association of Realtors-Mortgage applications increase as mortgage rates drop.

Fresno Association of Realtors- Multiple Listing Service Statistics- Including days on market, pricing, solds, and under contracts.

Fresno Real Estate Overview. (2009, September 29). Retrieved September 29, 2009, from Trulia: http://www.trulia.com/real_estate/Fresno-California/ Mitchell, J. (2008, June 26).

Hawkins, L. (2009). News Articles-Fresno/Clovis Real Estate Market. Retrieved September 29, 2009, from YourFresnoBroker.com: http://www.yourfresnobroker.com/news.html

Realtor Interview-Tony Christian

Realtor Interview- Rosemarie Barrera