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Ask your real estate agent to strip your market reports of the lease information

December 7th, 2008 · 2 Comments · chesterfield township, macomb county MI, macomb county mi real estate market, tips for home sellers

$144,407 -or- $162,292 ??

$144,407 -or- $162,292 ??

The Scenario: You live in one of the communities in Macomb County MI.  You are considering putting your home up for sale and are planning on interviewing several real estate agents.

The agents come to your home to view it and talk with you about your needs, and towards the end of the interview they pull out their paperwork and/or laptop to show you exactly what has been happening in your local area.  (Please be sure the information is localized – your subdivision and neighboring ones, your school district, etc.)

You also have a chance to ask questions of them: Where do you get your information?  How accurate is the data?   One more important question is often overlooked: Does your data include homes being offered for lease?

Here is why that question is so important: One of the reports that real estate professionals use is the latest Multilist data showing how many homes have sold, average days on the market, and average sales price. A problem with the accuracy of the average sales price of homes in your localized area is that the leased homes (homes that were rented) is included in the total data.

An example: 18 homes sold in Chesterfield Township during the month of November, 2008 according to the data provided by Mirealsource™. The average sales price is being reported this morning to be $144,407.

However, when I pull up the detailed information 2 of the 18 homes being reported as sold, were actually homes that were leased for $1200 and $1450 respectively.   This clearly will throw the reported average sales price out of whack.   Stripping those rental prices out of the report shows a more accurate reporting:

16 homes sold in Chesterfield Township MI during the month of November 2008 with an average sales price being $162,292. (Sellers concessions to the buyer in form of closing costs paid, or credits given for repairs are included in this sold data.  Stripping this information is another post entirely!)

When I am looking at raw hard data for my clients I take into account what is being reported:  “Sold” and “Lease” data.  Please be sure your real estate professional is doing the same thing for you.    Ask him/her to give you the facts based upon what is truly “sold” (unless of course you are renting out your home and need that specific data!)

~Kris Wales~

A Macomb County MI real estate agent – A partner for your real estate needs

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2 responses so far ↓

  • 1 Brian P // Dec 16, 2008 at 10:05 pm

    Good info. I discovered the same thing a few months ago after pulling the monthly sold data out of MiRealsource. The only reason I caught it was because I couldn’t believe the average was so low (I knew it wasn’t THAT bad), so I dug a little deeper and sure enough there were lease closings included with solds.
    We should start spreading the word…hopefully enough of us call MiRealsource and they will segregate the leases from the actual solds.
    Congrats on the move and welcome to the KW family.

  • 2 Kris Wales // Dec 17, 2008 at 6:03 am

    Brian, I made a phone call about 2 months back to Mirealsource about this, and was told that my discovery would be noted and addressed by someone else.

    I never heard back from them. Perhaps it’s time that all of us do this.

    Thanks so much for stopping to read and comment, and also for the congrats on my move. It is much appreciated.

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