Do those words bring back memories from your childhood school days?  Were you one of those students that began searching for lost assignments the last week and began studying for that all important test so you could catch up and get that acceptable grade before your parents saw your report card?  Perhaps you were organized and on-time and the reminder from teachers didn’t faze you much.

SW Florida Real Estate Market Grades

As the parent of two students in the school system I get these notices emailed to me so we can remind our children.  It does bring back memories, although it seems my generation worried about grades and assignments just a little bit more than today’s kids seem to.  I don’t recall having assignments not turned in, but my kids do, and other parents I talk to say the same thing.

Did you know that there are report cards in real estate too?  One such grade you might want to pay attention to if you’re a seller is the Days on Market class.

SW Florida Real Estate Average Days on Market Chart

As you can see from the attached chart, the average days on market for a foreclosure (REO) is only 33 days.  This means they sell almost as fast as they come on the market.  Buyers know it’s best not wait too long to make an offer on these properties or they’ll be gone in a blink.

The good news is traditional sales are down to 40 days on average.  We have a shortage of homes on the market and a home that’s priced at the market will sell almost as fast as a foreclosure will.  Short sales take a little longer, 109 days, as some buyers can’t afford to wait and see if the bank will take their offer.  Some buyers need housing now and can’t wait for a yes/no/maybe answer for several months; all the while new listings hit the market and sell each week.

If you’re a seller and you see the average days on market is 40 days and your home has been on the market 200 days, it might be time to ask yourself some important questions.  Your sale is failing the test.  The market has not accepted what you’re doing.

It could be the marketing, the presentation, or the price.  Of course, all the marketing in the world won’t sell a home that’s dramatically over-priced.  Usually it is the price.  If you’re going to pass the test, it’s wise to study the market and evaluate where your property stands in the market, not in your eyes as the seller but in the market’s eyes.  It never mattered how smart I thought I was, what mattered was what the teacher thought.  And believe me, the teacher’s thoughts mattered to my parents.  There’s only so much fast talking you can do when the grades don’t come in.

You might ask yourself.  Who am I fast talking?  Am I selling myself on the value of my own home, or the buyer?  If you’re selling yourself, you’re essentially buying your own home back at an inflated price.  You wouldn’t do that if you were buying someone else’s home, so why do it to yourself?  If the buyer’s aren’t buying and your home has been on the market a long time, you probably know the answer.

In school grading there is a district wide average and then there is a class average, and in real estate there is a county or city wide average and a smaller neighborhood or type average.  This is important too.  Perhaps $1 Million + homes take longer to sell, which they do.  Golf course properties with high mandatory golf fees do as well.  If your maintenance fee is high, that can add time.  Be sure to compare the grades of like kind properties.  Although, if you live in a home or community that has an average of 1.5 years to sell, you might want to price your home so it is the Next to sell, not # 14 on the list.

We hope this helps explain the Days on Market class grading system.  If you have questions or considering selling your home, feel free to call us.  239-489-4042. We’ll be glad to help you get that perfect report card.

This past week I attended a training session at the Board of Realtors for a newly updated product used by the MLS called Realist.  While I’ve used the product in the past, I must say I was blown away by the new reports and functionality.  The usefulness to Realtors just multiplied exponentially. New Tool Assists Realtors Value Property!

There is a lot to the program and it will take agents some time to learn how to use it effectively, but it will be an investment well worth it.  I’ll attempt to show snippets of a few of the reports, but it won’t do it justice.

New Tool Assists Realtors Value Property
Map of Comparable Sales

Once Realtors get the hang of the program it will save time and produce some amazing research results.  The program not only identifies and provides a multitude of information about a subject property, it also helps identify comparable properties, market trends, and useful neighborhood information.  The trick to providing accurate valuations has been and always will be interpreting the data.

One of the things I was impressed with was the AVM (Automated Valuation Model).  The AVM identifies provides a range of value along with an estimated value.  It comes with a degree of confidence and a Standard deviation, the higher the confidence and the lower the deviation the greater its accuracy.  Let’s say it determines a property has a AVM value of $200,000 with a degree of confidence of 87% and a standard deviation of 8%.  What it’s really saying is they feel the property has a 87% chance of selling 8% +/- of $200,000.

The system does a nice job of identifying comparable properties through both MLS and tax data and mapping them as well as a grid format complete with details.  It makes it easy to select the best comparables.

Another feature I liked was the market conditions in the neighborhood, zip code, and the city.  It showed graphs of median list prices over time as well as median sale prices over time.  At a glance an agent and seller could see market trends which would be helpful in pricing a home.

Financial Health of Neighborhood Graph

There is even a distressed property section which shows foreclosure rates and identifies the percentages of homes in pre-foreclosure, sold at auction, and in REO (Real Estate Owned) status typically by the lender.

I ran a sample report on a property after studying the comparables and it generated a very nice and informative 25 page report.  I talked to some agents this week who didn’t go to the class.  They felt since they worked more with buyers than sellers it wouldn’t benefit them as much, but I would argue it would.

Buyers can benefit from these reports too.  There is a neat report that shows all the neighbors, how long they’ve owned, what they paid, and quite a lot of information on each house.  It provides this all in a map format along with a neighbor report.  What a great way to show stability, or find out who the neighbor is with the barking dog.  If you see they’ve lived there since 1988, chances are they might not be moving anytime soon.

The system provides walking and driving distances to schools, businesses, restaurants, etc.  It will even rate the schools with a 3rd party rating service.  The software incorporates census data too and combines all this in an easy to digest format.  I particularly like the section that shows MLS data and tax data and points out where they differ.  The system makes no attempt to explain which is correct.  It’s possible the owner added on to the house without a permit, or perhaps there is an error on the listing.  Either way you’re miles ahead of potential problems at a glance.

If you’re a Realtor in the Greater Fort Myers MLS, you’ve got to spend some time with this product.  If you’re a customer, you’ll be amazed at the results.  And the best part is, Realtors in the Florida Gulf Coast MLS have access to every county in Florida.

It’s so exciting to live in the age of useful technology.  One day soon we’ll wonder how we ever lived without programs like this.

Good luck, and Happy House Hunting!!!!