I really wanted to do a Friday Chart answering the question, “What percent of asking price do homes selling in Charlottesville sell for?“
This is the type of analysis that would be tremendous to provide if it the results were consistently reliable and accurate.
53 single family homes sold in Albemarle County in August 2010. I ran the automated “competitive market analysis” report in the Charlottesville MLS and the price-to-sell percentage was 94.6%, meaning that houses that sold in August sold for about 94.6% of the asking price.
Those reports are only as good as the data. And the percentage didn’t feel right.
So I started looking, randomly selecting sold properties. I picked six.
– One property that looks like it sold for 100% of the asking price actually sold for – after it was pulled off the market and switched Realtors – 77% of the original asking price, was a foreclosure and last sold for $174,900 in March 2003.
– Another one looked like it sold for 100% of the asking price actually sold for – after it was pulled off the market and switched Realtors – 93% of the actual original asking price. A non-foreclosure that last sold for $300k in May 2007 (and was being marketed then as “priced at 2007 county assessment”).
– One in Crozet looks like (and actually did) sell for 80% of the original asking price. (and the listing agent is marked as handling both sides of the transaction)
– A home in Ivy sold for 94% of the asking price, and the seller paid $5k towards the Purchaser’s closing costs.
– Lastly, one that sold for $945,000 – 96% of the asking price – actually sold for 66% of the original asking price – nearly two years ago.
– One was new construction that looks like it sold for 107% of the asking price – in zero days on the market. True? Accurate? Nope.
The moral to the story? The same as I teach my kids. Ask questions. Be skeptical. Don’t trust face value. Many of the people teaching/speaking have an ulterior motive.
The data and reports that you read that talk about the Charlottesville real estate market, the Virginia real estate market and the nation’s real estate market probably don’t give you the insight or the guidance that you need to make the decision that you need to make. The analyses don’t speak to your situation – your zip code, your part of the area, your neighborhood or your street.
Every real estate market is decidedly local – town by town, neighborhood by neighborhood even street by street â€“ and each property requires a specific market analysis to accurately determine possible fair market value.
If you really want to make an informed, competent decision about your situation, hire competent representation.*
* Of the ~1000 Realtors in the Charlottesville area, 400 have not yet done a transaction this year. In my opinion, if you’re not doing at least three (and likely at least five or ten) transactions a year, you may not be fully aware of the market trends and pitfalls that exist.
** Doing my part to demolish real estate’s fortress of suckitude.
3-5 transactions a year can not possibly make you expert enough to handle the largest transaction of most people’s lives. Plus, the rules change nearly every day. Check out the way banks and underwriters are reviewing appraisals these days. How about the FHA mortage insurance premium change (big) october 4. Also, I think new agents (say under a dozen successful transactions) should have to have their work signed off on by the princiapl broker or sales manager.
Jim, you are right on – it is not enough to look at the LP/SP ratio of the LAST price, you have to go to the FIRST price! Same thing with market time. A home sells in what appears to be 14 days for full price. But if you check the history you see that it has been listed for three prior six month periods by two different agents, and the sale price is actually 80% of the asking price a year and a half ago! A good buyer’s representative will pull this history and share it all with their buyer clients.
Keep up the good analysis!
Keller Williams Realty
Virginia Beach, VA
Pingback: Tweets that mention List Price to Sale Price Ratio in Charlottesville's Real Estate Market | RealCentralVA.com -- Topsy.com
Pingback: Friday Chart – Number of Real Estate Transactions in Crozet â€” RealCrozetVA
Pingback: Home Sales Trends in Virginia – From Virginia Association of Realtors | RealCentralVA.com
Pingback: Charlottesville Real Estate Market Update – October 2010 | RealCentralVA.com
Pingback: Albemarle County Real Estate Update – The first Ten Months of 2011 | | RealCentralVA.comRealCentralVA.com
Pingback: City of Charlottesville Real Estate Market Update – First Ten Months of 2011 | | RealCentralVA.comRealCentralVA.com