I had a client named Matt contacted me and wanted a free Comparative Market Analysis (CMA) performed on his two bedroom condo. Matt wants to list his property for $359,000 which is slightly higher than his original purchase

price a few years earlier. The CMA process takes into consideration current

active listings, pending listings, off market, expired and canceled listings

and sold listings. The comparative portion takes into consideration similar

square footage, similar age of the property, equal amenities, like upgrades

and features, and equivalent location.

The price per square foot is a universal formula that gives a foundation of

what a property can be priced at. If the average price per square foot in a

particular development is going for $129 per square foot on average then

this gives a starting point for the CMA. A newer property with the same

square footage, amenities and upgrades will probably have a higher price per

square foot because the structure is new, the HVAC system is brand new and the evolution of construction must be considered. A home built in 2007 has higher grade windows and is more energy efficient than a property that was built in 1989 with the original windows.

When looking at comparable properties, ideally selecting properties in the

same neighborhood, community or building is optimal. The nice part about a

property that is a condominium complex is that you can usually look sales,

expired listings and current listings and the same floor plan with similar

upgrades and amenities can be found usually pretty easily.

The hardest part about pricing a property for sale today is ensuring it is

not only priced correctly for the sale but that the appraisal for that

particular property will be at or above the sale price. Matt lives in a new

construction unit on the beach. He paid approximately $288 per square foot

three years ago. The unfortunate part is that the CMA shows that the

property should go on the market today at about $259 per square foot. When Matt purchased this property he paid $351,360 but today has to sell it for $323,000 in order to be competitive and have it appraise for the sale

price. In this case, the price is $27,000 less than his purchase price and

he has over $100,000 in the property from his down payment. Another

consideration is that in a similar community that is only four blocks away

still has vacant units for $249 per square foot direct from the builder.

Matt has some tough decisions to make about the loss that he is going to

take on this property. He can put it on the market for $323,000 and see

what kind of interest he gets. He can put together a Lease Option and sell

it at $359,000 but when the lease option comes due the property still has

to appraise for the sale price of $359,000. Matt can also rent the property

out on either an annual basis or season basis which will give him income and

he can hold onto it until he can get what he paid for it and then sell it.

When you are listing your home, you need to be realistic when pricing it.

The price of real estate is mandated by supply and demand. With a flood of

short sale and foreclosure properties on the market this will affect the

value of your property. Check out the market yourself with your Realtor and

see what is on the market and what the properties are priced at. I explained

to Matt that finding a buyer that is willing to pay a particular price for

his property is only 30 percent of the battle. I think that the price he wants is realistic and fair for this great condo. However, if a buyer gets into a

contact with him and is unable to obtain financing because the property will

not appraise for the contract price the contract may not close. The last

piece of advice that I will give is hire an appraiser to perform an

appraisal on your property to ensure that the property is worth that you are

asking for it. The price is nominal and can give you a better perspective on

what you should list your property at.

As always, if you have any questions that you want answered contact me at

JJakus@LeisureAmerican.com and I will answer your question in an upcoming

article.

Jason M. Jakus is a licensed realtor for Leisure American Realty, a full service Real Estate and Property Management company serving the beaches and surrounding areas of Lee County. Their office is located at 2450 Estero Blvd., Fort Myers Beach FL 33931. For more information on this or any other real estate or property management subject contact Jason at 239.463.3178 or email RealtyInfo@LeisureAmerican.com.