What defines a “Local Market Expert?”
A local market expert has extensive knowledge of the properties in their market and is able to explain how current market dynamics are impacting prices. Every community and market is unique and it takes a local expert to help you navigate the complicated process of buying or selling real estate. A local market expert will understand the lifestyle of the community and what it’s like to live there.
How can a local market expert benefit your real estate transaction?
Most agents use comparable sales, cost approach, county tax information and local market knowledge to help sellers establish the correct selling price for their property. Montana is a non-disclosure state meaning that the purchase price of real estate is not released to the public. Many sellers rely on the Zillow “Zestimate” when determining the list price of their property, but because sold prices are not public in Montana, many times this information is inaccurate.
A local agent will have intimate knowledge about the condition of comparable properties, the location, and how these will affect the value. They know the expectations of buyers looking to live in the area, and most importantly they have access to the most recent sale prices.
While comparable sales play an important role in a seller’s pricing strategy, they also play a major role in a buyer’s negotiating strategy. When working with a local expert, buyers have the same access to comparable sales information as the sellers. Many local buyers’ agents will take it a step further and analyze the current pricing dynamics; looking for specific reasons prices are pushing up higher or dropping. Every market is unique and only a “local expert” who lives and works in the area can decipher these signs.
OUR CURRENT MARKET
A local market expert can analyze the MLS data of recent sales transactions and gather information on the current market trends. For instance, in the Seeley Lake residential market, there have been 36 sales in 2018. Of those, 22 or 61% of the homes sold for under $300,000. There are currently another 6 home sales pending; all 6 pending sales are homes priced under $300,000. Of the remaining 53 active residential listings in the Seeley Lake area, only 12 properties are listed under $300,000 where there is the strongest buyer demand.
What does this tell us about the current residential market in Seeley Lake?
With the majority of the homes selling under $300,000, only 23% of the active inventory is priced in the range that is attracting the majority of buyers. Seeley Lake is experiencing a shortage, or lack of inventory in the price range that exhibits the strongest sales numbers.
When this happens, sellers are tempted to price their homes too high. They are hoping that if there is a lack of inventory, buyers will be willing to pay more for their homes.
With higher-end sales lagging, we are seeing motivated sellers reducing their prices trying to attract the attention of buyers. Remember, the buyer sets the price; your home is only worth what a buyer is willing to pay in the current market. If your home has been sitting on the market for most of the summer, you may want to consider a price reduction to attract more attention.
Whether you are buying or selling, always hire an experienced local market expert; someone who lives in the immediate area, knows how to interpret the market signs, and understands the value of proper pricing. A local market expert will provide you the best opportunity for a successful real estate transaction!