Compare Similar Properties
A real estate marketing subdivision report is typically used to price a property when placing it on the market; it is also used to generate appraisal reports. A market analysis compares a property to similar properties in the general area. There are five steps to creating a subdivision marketing report.
Instructions
Comparative Market Analysis
1. Define the property to be evaluated. Take into account things such as lot improvements, square footage, number of bedrooms and bathrooms and any upgrades done to the property. The most common upgrades include increases in square footage and interior improvements such as kitchen and bathroom upgrades.
2. Review the prices of comparable properties currently for sale in the same subdivision. Add value to the property for upgrades that comparable homes in the area do not have, and subtract value for upgrades that similar homes have that the subject property does not have.
3. Forecast the demand for the property by reviewing properties in the subdivision that have recently been sold. This can be done by taking into account how many days these properties were on the market before they sold, and the current amount of inventory on the market. Averaging these times and the available homes on the market is called an absorption rate formula; it is used for forecasting subdivision sales activity.
4. Take into account the principal of supply and demand. Forecasting demand is not enough to completely evaluate the market value of a property, although it is a good start. Regardless of the past sales data, general market conditions in a city or general area of a city are the best indicator of supply and demand.
The supply and demand principal defines whether a market is a buyer's market or a seller's market. In a buyer's market the inventory is high, whereas in a seller's market, inventory is low.
5. Identify a common sales price. Use the data from comparable listings in the area; select properties by square footage and upgrades or lack thereof. Add the sales prices together and divide by the number of homes recently sold. This will provide you with the average price per square foot. Multiply the average price per square foot to determine the value of the property. This data comprises a subdivision marketing report, or comparative market analysis.
Tags: into account, square footage, supply demand, value property, average price, average price square