YOUR EBOOK TITLE THE NEW CMA: COMPETITIVE NOT COMPARATIVE
STEP 3: COMPETITIVELY POSITION THE HOME & PRICE FOR MARKET VALUE
STEP 3.1: Understand the Market Factors STEP 3.2: Competitively Position the Price LOREM IPSUM
So far we have looked at area trends, compared to recent sales to find a base price, expanded that to a Pricing Range where we have sound historical evidence to show value, and then used that range to establish a Competitive Range where we will have buyers looking at our listing. Using that Competitive Range we go and look for new competition data in what we call the buyer zone. For the example property we expanded to a Southeastern part of Fort Collins that has a certain profile of development, growth and interstate access that a group of buyers specifically want. In Fort Collins the western edge is by the foothills, there are buyers who only want that area. There is an old town that buyers specifically look for. This southeastern area is similar in its regard to having a specific buyer pool, if you will.
Now it’s time to use that data and look at the market momentum and opportunity before we jump into the final step of bringing everything together to position the home for market value.
First let’s define these two additional market factors and show you where you can find the information that will clearly state what these market factors are telling you as a real estate agent that you will need to know in order to position the home properly.
Momentum
Momentum represents the direction of the force or desire in the market for buying and selling. Which side, buyers or sellers, currently overpowers the other? You’ve heard before that it’s a sellers market when housing demand exceeds current supply or it’s a buyers market when it’s the other way around. That’s true in some cases but not all. That is a snapshot of only now, but what you need to do is take in seasonality and other factors to see where the market will be going, not where it is now. That’s what momentum tells us. Using a predictive formula based on the Competitive Range data, we can account for seasonality, expected new market entrants and other market factors to tell us the momentum in the next 90 days. If there is a momentum toward the sellers, it means that you have the power. It means that right now there is a need for more sellers to be in the market to satisfy the projected demand. If the momentum is toward the buyers that means that the market is slowing down as far as new buyers coming in, and you need to be enticing the ones that are there right now in order to make sure you get a closing.
We show the momentum very clearly on our Pond 2.0 graph with a dial at the top.
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