seller specific strategy report

123 Main St

Market ReportFor: John Smith

By: Arron Groomes

12.22.2016

Overview:

Property was listed on the market in late July for $369,000. The price was reduced to $339,000 the next month, then reduced again to $299,000 the month after that. The property was previously used as a rental, but the owner is getting tired of college student tenants who cause damage and wear out materials faster than the average tenant. The proceeds of this sale will go towards investing in a flip which will make back any losses they may have to cut. The property is currently vacant.

Goals:

1. Analyze the market to establish an expected sales price.

2. Create a game plan to get this property sold for its highest value given the seller’s desired timeframe.

What does this report include?

This report will provide information on the relevant and Hyper-Local market in your area, comparable properties, estimated sales price, and a sales strategy. “Relevant” meaning at least 3 bedrooms, between $200,000 and $400,000 list price, 3 or more bedrooms, move in condition, and near E Carson St.

Active

18%

Sold

53%

Expired

19%

Withdrawn

10%Off Market

29%

Market Over Past Year

Active Sold Expired Withdrawn

This is a general representation of

the competitive marketplace:

Properties between $200-400k, 3+

bedrooms, and close to E Carson St.

• 53% of the listings in this market sold within the last year.

• 18% are still trying to sell, while the remaining 29% are no longer on the market at

this point. Some of the properties are off market right now due to waiting until the

spring market, renting the properties out instead of selling, and change of mind.

Market Report – South Side (Relevant)


3 3

2

1

13

6

5

3

4

7

2 2

0

2

4

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12

14

200-250 250-300 300-350 350-400

# o

f L

isti

ngs

Price Range ($ in Thousands)

Satus vs Price Range

Active Sold Off Market Linear (Sold)

• The higher you go above

$250k, the smaller your buyer

market gets (as shown by the

dotted trend line)

• 48% of the sold homes were

priced between $200-250k

• There were more listings

pulled off the market than

sold in the past year for

properties priced between

$250-300k


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1

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January Februrary March April May June July August September October November December

# o

f O

fers

Acc

ep

ted

Month Offer Was Accepted

Offers Accepted• The hottest months

for getting an offer

were April, May,

September, and

October.

• There were no offers

in January,

February, or

November.

• The selling market

seems to be from

April to October.

0 0

360

96.5

22.5

94.5

175.6

67.5

10

124.6

0

97

Avg Days Until Contract

Avg Days Until Contract


The average days until contract from April to

October (the selling market) is 84 days. This

means that you would have to list your home at

least 84 days before April to get maximum

exposure to your property. 84 days before April is

Saturday, January 7th.

One marketing tactic is to pull the home off the

market in January and February since no offers

were accepted in those months last year. This

could be effective, but I believe it would reduce the

exposure to anyone looking for a home. People are

relocating to Pittsburgh for work throughout the

year which is represented by the 2 offers that were

accepted last year in December.


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20

40

60

80

100

120

140

160

180

200

200-250 250-300 300-350 350-400

Average Days Until Contract by Price Range

Price Range ($ in Thousands)

Any home over $300k in

Southside is likely to take

longer to sell.

The turnover rate for homes

between $200-300k is faster

than $300-400k. Homes

between $300-400k still sell

but that must be the accurate

pricing otherwise it will greatly

reduce the likelihood of selling.

Market Report – South Side (Hyper-Local)*Hyper-Local meaning a ¼ radius around the property address

Active

17%

Sold

61%Expired

22%Other

22%

Market Over Past Year

Active Sold Expired

The Hyper-Local market makeup is

very similar to the wide market

makeup of the Southside.

In the spring 2017 market, we can

expect that 61% of the Hyper-local

listings will sell.

The market is warm but not hot.

39% of listings are not selling. It is

important to strategically price and

market the property to outshine the

competition in the H-L market.

Market Report – South Side (Hyper-Local)1 1 1

0

6

2 2

1

3

0 0

1

200-250 250-300 300-350 350-400

# O

F P

RO

PE

RT

IES

PRICE RANGE

STATUS VS PRICE RANGEActive Sold Off Market Linear (Sold)

55% of homes sold for between $200-250k

Comparable Properties*Properties used to compare against 24th in order to assess an accurate sales price

Relevant Market & Hyper-Local Market

2511 Jane• Sold for $268,500 in 21 days

• On-street parking

• 3 Beds/2.5 Baths

Compared to 24th, Jane has:

- Worse curb appeal

+ Better Kitchen

+ Open Concept

- Worse Fireplace

+ Nice patio slab in back

+ Staged

2102 Sidney• Sold for $314,900 in 11 days


• 4 Beds/2 Baths

Compared to 24th, Sidney has:

= Similar curb appeal

+ Better Kitchen

+ Better Condition Brick Wall

+ Better Outside Area

153 S 19th• Sold for $303,000 in 97 days


• 3 Bed/3 Bath

Compared to 24th, 19th has:

+ Better curb appeal

+ Better Kitchen

+ Open Concept

+ Furnished

+ Sauna

+ Better outside area

= Nice Bathrooms and Finishes

2801 Jane• Sold for $287,500 in 55 days

• On-street parking (Parking option with fence removal)

• 4 Bed/3.5 Bath

Compared to 24th Jane has:

+ Parking option

- Outdated in every room

+ Rooftop Deck


• 2 Car Attached Garage

• 4 Beds/2.5 Baths

Compared to 24th 20th has:

- Worse curb appeal

+ Back Deck

+ Garage

= Average Kitchen

- Worse Bathrooms

= Nice floors and finishes



• 3 Bed/2 Bath

Compared to 24th, 19th has:

= Similar curb appeal

+ Better outside area

+ Better Kitchen

= Nice Bathrooms

+/- More modern living room

1914 Sidney• Sold for $308,400 in 46 days

• 2 Car Detached Garage

• 2.5 Beds/2 Baths

Compared to 24th, Sidney has:

+ Better curb appeal

+ Garage and Yard

= Nice but small kitchen

= Rough brickwork

- Worse floors

- Smaller house

Walk through of Property

Pros:

• Nice floors and paint job

• 1st floor washer and dryer

• Ductwork looks new

• Window trimmings in 1st floor BR

• Smell of BBQ from Double Wide

• Nice big showers

• Small upstairs porch

• Upstairs bathroom/closet space

• Cool black stand in upper master

• Has a lot of potential

Walk through of Property

Cons:

• Bad impression from outside

• Can you hang a TV over fireplace?

• Insulation on front door. Noisy

• No staging

• Kitchen faucet not attached

• View from kitchen window is garbage and rust

• Basement is rough

• What’s the best use for 1st floor BR?

• Not all light switches seemed to work

• Black stand in master really loose

• Burnt out light bulbs

• Beeping throughout the house drove me insane after 20 minutes

• 1st floor BR slopes down

• Neighbors door looks right into 1st floor bedroom

• Door cluster by 1st floor Bath

• Captured 1st floor bath

• Pipe leak in 1st floor bathroom

• Top of stairs not flush

• Captured room on 2nd floor in back

• Deck door frozen shut? Couldn’t open

• Clean up outside

• Handle for downstairs toilet isn’t attached

• Caulking in some areas isn’t well done

Estimated List & Sales Price

• Avg Sales Price of Homes within ¼ mile that are move in ready= $269,988

• Based on the prior Comparable Properties, I believe the sale price will be between $270-280k ($275k expected value)

• Based on the properties that are currently on the market in South Side, I believe you should be listed at $285k. With the average home in South Side selling for 95.7% of the list price, I believe 24th will sell for $272,500.

• Weighted Average Sales Price – the price adjusted for the importance of each analysis

= (269,988 x 15%) + (275,000 x 60%) + (272,500 x 25%) = $273,623 Sales Price

• Average Sales Price in Hyper-Local market is 95.754% of the list price.= $273,623 sales price / 95.745% = $285,783 ~ $285k List Price

Sales Strategy

• See where the market is in March and price accordingly ~ somewhere between $275-290k. Expect to sell for $270-280k, depending on how well you execute the sales strategy to generate more buyer leads

• Aggressive marketing: Internet, Phone, Email, Businesses– Internet: Facebook, Google, and Youtube ads

– Phone: Calling everyone who clicks on the MLS page and chasing leads

– Email: Send emails to all agents and brokerages surrounding South Side

– Business: Ask to put for sale flyers in SS businesses (Double Wide)

• Mild staging: Artwork, lighting fixtures, rugs, towels, few chairs, maybe a bed…Focus on Living Room ~ 1st and last impression

• New Pictures after staging to get more showings

• GET IT IN SHOWING QUALITY

Sales Strategy - Continued

• GET IT IN SHOWING QUALITY:

– Outside: Add stair mat in outside front (similar to 90 24th st), put railing out front on stairs (maybe), remove trash can, bottom of front door not flush, paint chipping, for sale sign is sideways, mail in mailbox, branches growing on right side, window film bubbling on front door, old light fixture, remove junk behind the house, remove/replace green sheet on fence, clean up the visible gutters, front door frame needs finished.

– Inside: Door insulation (lots of noise from the street), artwork on the brick, fix kitchen faucet, add window trimmings to kitchen window to hide view, add window trimmings on all windows, fix pluming issue in 1st floor bathroom, fix handle on 1st floor toilet, try to fix the top stairs not being flush, crooked finishes (vents, drawers, change burnt out lights, use rug where floor is sloping, add artwork; lighting; rugs; window treatments; table; chairs; desk. Make the living room the best staged ~ 1st and last room they see.

Sales Strategy - Continued

• Layout

– The 1st floor room would be a nice office space so that people could walk through to use the bathroom and not intrude on someone’s privacy.

– As you come up the stairs, there is a room on your right which would be a great bedroom with a balcony and a walk in closet and/or office space that flows into the bathroom.

– The 2nd bedroom is on the left side of the stairs and the master is on the very top floor.

– The 2nd bedroom does not have direct access to a personal bathroom, but could use the downstairs bathroom if needed.

– The captured 2nd floor bathroom is the biggest functional issue and it’s best use is a bathroom for the whole 2nd floor.

– You will NEED to help buyers visualize this layout otherwise they will be attracted to an easier property layout in another house. Use a few pieces of furniture to give them the idea of the best layout.

Summary

• Keep on Market

• Fix issues listed in Walk Through and Showing Quality

• Update pictures once issues fixed and mild staging complete

• Reassess market in beginning of March and drop the price to between $275-290k based on competition in South Side.

• Utilize aggressive marketing strategies

• If you really need to move it, offer 3.5% commission

• You should get an offer for $275k+ by June

Question: What about price dropping?

• The idea is to price drop now with the intention of selling quickly as opposed to renovating the kitchen, face-lifting the front, and touching up a few details inside to sell for a higher value.

Goals:

1. Assess the market to see if we could expect to sell in the next 3 months at a lower price.

2. Create a cost-benefit analysis to determine if it would be more profitable to sell now at a lower price or update and sell for a higher price.

Assess the Market

1 Bedroom, 0

2 Bedroom, 53 Bedroom, 1

4 Bedroom, 2

Current Listings $250-300k

1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom

1 Bedroom, 4

2 Bedroom, 5

3 Bedroom, 5

4 Bedroom, 2

Sold Listings $250-300k

1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom

37% of the market is 3+ bedrooms. Only 1 3 Bed. 43% of market is buying 3+ bedrooms

Current (Price) Comparable PropertiesAddress Exterior Interior Interior

82 S 14th St

3 Beds/2 Baths

$275,000

(Just listed 12/28)

1711 Larkins

4 Beds/2.5 Baths

$269,900

2016 Sidney

4 Beds/2 Baths

$264,999

Based on the current market, you should price 24th between $270-275k as-is

Past (Price) Comparable PropertiesAddress Exterior Interior Interior

131 S 19th

3 Bed/2 Bath

Sold for $270k

In May, 12 DOM

2511 Jane

3 Bed/2.5 Bath

Sold for $268.5k

In Nov, 21 DOM

2328 ½ Sindey

3 Bed/2 Bath

Sold for $250k

In Dec, 172 DOM

Based on past sales, you should expect 24th to sell in the $260-270k range as-is

Overall Market Assessment

• In the current condition, you should price 24th between $270-275k and expect it to sell for $260-270k.

• The sooner you want it to sell, the lower the price should be.

• If you want to sell as fast as reasonably possible, I would recommend listing at $270k (dropping $30k).

• Buyer’s online activity picks up around the beginning of February so the aggressive price point will hopefully cause potential buyers to act fast before someone else buys it.

• If the listing doesn’t sell in the next 3 months, I am sure that it will sell in the next 6 months (spring market) at that price point.

To Renovate or Not to Renovate, that is the question.

• The reason for renovations would be to increase total profit. We need to assess whether it would truly increase profit and if it will help the property sell faster.

• At the $300k price point, the home should at least have the kitchen renovated at a cost of around $20-30k (varies). Expected sale price would be $285-290k after renovations.

• As is, the home could sell for $260k and you would net around the same amount as if you had done renovations.

• There are more buyers who can get preapproved for the lower list price, so it should allow you to sell the property faster.

• Summary: Lower price = Faster sale. Renovations = higher price but net a similar amount vs as-is. If you really want to sell fast, I would drop the price. It also minimizes your cash outlay which reduces the riskiness of return on investment.

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