Monthly Value Message – Sept 18

Critical Data and Rates

The Numbers

DOM = Days On Market.

The DOM is disclosed on all Centre County Association of Realtors Property Data Sheets.

When I started my Real Estate career, over 20 years ago, the average DOM for a home sale in Centre County was over 150 days. Unofficially, year to date, the average DOM is approximately 40 Days.

The DOM total is calculated from the day the property appears in the Centre County Association of Realtors MLS and the day the Seller and Buyer execute an Agreement of Sale. Not included in the DOM is the approx 30 – 60 additional days from the time the Sales Agreement is executed till the final closing occurs(Settlement). This is the time the buyer completes any Home Inspections and secures their Mortgage Financing from the lender.

A Few Basic Mindsets on how the DOM may affect the Market Value of a Property…..

• Is it likely a seller will accept an offer 10% below asking price with a DOM of 2 days?
• Is it likely a buyer will pay full price if the properties current DOM is 67?
• How many DOM should a seller have before adjusting their price?
• What is the current average DOM in this area?
• Is the DOM always an indicator of current market value?

Market Value is never derived from one data point or one factor. Look at the data and your Realtor as your eyeglasses, they help you see better, but nothing provides “future vision”.

What Does “Market Value” Mean?

To me, the definition of Market Value is……

It is likely that more than one qualified buyer will pay the current listed price of a product within a reasonable amount time.

I could teach a 40 hour course on this topic and only scratch the surface.

That said, here are a few factors I consider when coaching clients on receiving offers(sellers) or making offers(buyers).

Does the offer result in the attainment of your goals?

Are you negotiating because you think your supposed to or because you are firm in your view of the “value”?

Does the result of the negotiations matter?

Is a 1% or 2% difference in the final value a deal breaker?

Can you easily and probably replace the offer(sellers) or the property(buyers) you are negotiating on?

What is the cost of future time if the negotiation is not successful?

Does today’s final “value” affect your future in a significant way?

I know, this exercise may seem a bit “abstract”. I assure you, it is not.

How many times in your life will you purchase a single product with a value
over $250,000.00?

Yet many consumers negotiate this type of purchase as if their buying something
at a yard sale.

I have witnessed consumers(both buyers and sellers)end negotiations within
$5000 of success on properties priced at $400,000.00
(FYI….at current mortgage rates((approx 4.75% on a 30 year mortgage))
paying back $5000 dollars equates to an approx $26/month higher payment)

I am not saying that $26 more per month on your mortgage is not significant.
I am not saying that $26 more per month over 30 years is not significant
I am not saying that ending negotiations within $5000 of success is ridiculous in all cases.

What I am saying is…..”Why did you decide to buy or sell in this price point to begin with”?

“And why is $26/month the deal breaker…..

• when you have a $200/month Cable TV bill
• when you eat at the Waffle Shop once a week
• when you grab a Gatorade and lottery ticket once a week
• when you drive through for fast food once a week
• when you have Penn State Football season tickets
• when you buy a cool new piece of clothing without thinking about it
• when you treat yourself to a couple of cocktails because you had a hard day

I’m Just Sayin……..

Ok, I better lighten it up, or you’ll get cranky…

This Month’s Prize Draw Winners

This months winners will each receive a $25 gift card to the Original Waffle Shop.

• Larry Batterson
• Elizabeth Pekny
• Kristy Witmer
• Ben King

Next Month’s Prize

2 Winners Will each receive a $50 Gift Card to Facia Luna.

To enter the prize draw, you need to join my newsletter (bottom of the page) and then simply reply to the Monthly Value Message email that is sent.

“I could agree with you, but then we’d both be wrong.”

– Harvey Specter

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