SU # 16__Listing - Pricing, Financing & Seller Equity Flashcards
What is the single most important factor to decide when listing a home for sale and why?
The listing price, because if a home is priced right, it will sell relatively quickly.
What two common methods can help determine a reasonable asking price for a property?
Appraisal
CMA
What factors contribute to the use value of a property?
Income – Property can produce income through leases.
Appreciation – Property generally increases in value over time.
Use – The specific use of a property (residential, agricultural, commercial, or recreational) determines its value and its benefits.
Tax benefits – Property ownership could yield benefits in capital gains, tax losses, tax deferrals and depreciation for an owner
Explain the difference between market value and selling price.
Market value is an opinion of the value of a property based on analyzing data collected about the property. The selling price of a property is the actual sales price and can in some circumstances be greater or lesser than market value.
Why is a market analysis important?
It enables the client to make a more informed decision about what to offer or what to accept for the property.
What is typically the foremost question on the mind of a potential seller at the listing presentation and how should a licensee answer the question?
“How much profit will I get from the sale?” is typically the question most sellers have from the outset. The licensee can answer this question by estimating the seller’s net using the proposed listing price as the basis for the calculation.
What are the two primary purposes/benefits to the seller of a contract for deed?
First, it facilitates a sale that might otherwise be impossible. Second, it may give the seller certain tax benefits.
What is a lease purchase?
In a lease purchase arrangement, a tenant enters into two agreements simultaneously – an agreement to purchase and a lease. The tenant agrees to purchase the property, but operates under the lease until the terms of the purchase agreement are fully satisfied.
Oftentimes people confuse market value with
Selling price
Listing price
Cost
Assessed value
Cost
What is an important legal characteristic of an option to buy agreement?
The potential buyer is obligated to buy the property once the option agreement is completed.
The seller must perform if the buyer exercises the option, but the buyer is under no obligation to do so.
The contract can be executed at no cost to the buyer.
It is a bilateral agreement.
The seller must perform if the buyer exercises the option, but the buyer is under no obligation to do so.
What type of financing exists when a seller defers receipt of some or all of the purchase price of the property over a specified period of time?
Sale leaseback
Installment land contract
Option to buy
Purchase money loan
Installment land contract
A competitive market analysis is an attempt to
Find things in the home a seller needs to repair.
Establish a home’s fair market value.
Discover why some homes haven’t sold.
Convince a seller to list with you.
Establish a home’s fair market value.
Which of these would be a form an agent could use to show a seller what he or she will net on the sale of the property?
Statement of Closing Costs
Competitive market Analysis
Sale Price Disclosure
Estimate of Seller Proceeds
Estimate of Seller Proceeds
What is the most common reason a property fails to sell?
Overpricing
Lack of advertising
In need of repair
Not enough prospective buyers
Overpricing
The highest price a buyer is willing to pay and the lowest price the seller will accept for a property is known as what?
Selling price
Cost
Market value
Exchange value
Market value
