Eagle Mountain Housing Prices

Buying a home can at times be like playing Roullet in a Las Vegas casino. Do I sell, do I buy, and what price do I do it at. These are questions that a lot of residents of Eagle Mountain and the surrounding area are asking themselves. What things influence the price you can expect to pay and the price you can expect to receive.

To help me understand how the market works, I asked Craig Whiting for some real estate advice. Craig is an Eagle Mountain resident and owner of Rock Real Estate Group. I asked him a couple of questions about how market values are calculated.

Determining a listing price for sellers:

Determining the right sales price requires both science and art. For the “science” aspect, I research and identify the most comparable recent sales in the subject property’s immediate proximity, ideally choosing homes with similar style, year built and size, and then I adjust for objective differences of measurable factors such as total square footage, finished square footage, garage size, lot size, year built, the number of bedrooms, the number and type of bathrooms, etc. For the “art” aspect of it, I then carefully observe nuanced qualitative differences such as the quality and amount of upgrades, lot location, frontage direction, lot slope, views, noise, accessibility, neighbors’ curb appeal, presence of powerlines, busyness of the road, and many other factors. Understanding how these qualitative factors influence value takes years of experience and hundreds of closed transactions to gain significant expertise, as well as maintaining a continual pulse on the market to understand how “under contract” comps and “active” comps may affect a seller’s pricing decision. Such analytical talent gains even greater importance when providing pricing advice to a seller of a unique property with few or no truly comparable sales. Also, analyzing other product types (e.g., multi-unit properties, land, and commercial properties) have other processes I follow to come up with the best idea of value. An analysis from an expert agent or broker will provide greater insight, detail, and reliability than will even an appraisal from an appraiser – not due to the lack of expertise of appraisers, but rather the extra level of nuance an expert agent will apply in deriving the value advice for the seller.

Determining an offer price for buyers:

in a traditional market with balanced supply and demand, I advise buyers using the same valuation methodology as when advising sellers. I also try to find out if the seller has received other offers. I then combine these two factors (the market analysis and the presence of other offers) with how “in love” my buyer is with the home, then determine a pricing strategy from there. That said, we’re currently greatly undersupplied on homes, so I don’t rely competing solely on price to win the bid in a multiple offer situation. Price becomes just one determining factor among many when trying to compete against other offers. As an example, I received 16 offers on one of my listings just a few days ago, and the seller did not take the highest price. I help my buyers craft an offer strategy based on a multi-faceted approach that helps their offer surface to the top even when it’s not the highest price. Yes, I thoroughly calculate market movements into the pricing advice I give buyers, and I still estimate an appraised value so the buyer can understand how their offer price could affect their financing options. At end of the day, the buyer’s offer price will derive from several factors: their financial capability, how greatly they desire the home, how many other offers are on the table, what the estimated market value is, and what other nuanced (and proprietary!) offer strategies we use that could help decrease the price while still winning the bid.

Tax value calculations:

Utah is one of only twelve non-disclosure states. What this means is sales prices are NOT disclosed to the government. As such, although Utah County tries to determine fair market value based on recent sales, the truth is that the county doesn’t have the most accurate information available when making this valuation. Fortunately, this directly benefits consumers. Property tax values tend to come in lower (and sometimes MUCH lower) than true market value. On occasion, though, due to the lack of data, the county may unintentionally tax a property too high, in which case a homeowner can go through a dispute process to then lower the tax value. I’ve successfully disputed my tax value in the past, and I’ve helped my real estate clients do the same. I’ve found the dispute process to be both easy and fair. Of note, the county also provides tax breaks to primary residences, only taxing those properties at 55% of tax value.

Because Craig mentioned comparable prices, or what is known in the industry as comps. “A real estate comp is a home similar to the one you are trying to buy or sell and can be used to help determine the price or value of the property. Real estate comps (or comparables) can be pulled from data on the MLS, which is a database of properties that have been sold or are currently for sale in a given area.” MLS is only accessible by licensed real estate agents. So if a non-agent wants to see the values of a property and how much it was sold/purchased for, you can use a site like zillow.com to look up the value. You can also look at the documents that are associated with the property by doing a search for it on the Utah County website: http://www.utahcounty.gov/LandRecords/Index.asp. It should also be noted that if a Real Estate agent sells to friend or family, it is noted in MLS so that others pulling comps know that the price was a friend/family price.