Key Points:

1. These are the narrative portions of actual reviews. The

piles of supporting data have not been displayed.

2. Clients receive everything along with a comprehensive brief

on the suggested course of action.

3. While the data format/content may vary from review to

review, a supported course of action will always be suggested
and all data provided and explained.
Hi Guys –

I wanted to write this and get it over tonight as I started in on it and just kept
going. While the offer is low out of the gate, a look at the data shows two main
things – the market is sliding further as inventory continues to sit and based on
the data, the offer isn’t as out of line as first impressions indicate.

Know that this offer was a surprise. This buyer has been kicking tires for a few
weeks and I was under the impression that he had left – the other agent said he
is a heavy stats guy and has had them pull all kinds of data as well as doing it
himself. I was going to get with you tomorrow/Friday to see about reducing the
price.

============================

Data Averages:

Development
Active: $755,900 Sold: $641,000 (since 01/01/06)

Harrison HS 600K-800K All

Active: $683,100 (82 homes) Sold: $638,000 (20 homes)
Sale to list ratio 96%

Harrison HS 600K-800K 1+ acre

Active: $704,600 (25 homes) Sold: $665300 (3 homes)
Sale to list ratio 94%

West Cobb 600K-800K All

Active: $690,900 (141 homes) Sold: $645,800 (44 homes)
Sale to list ratio 94%

West Cobb 600K-800K, 1+ acre, Blt 1999 and earlier

Active: $729,200 (13 homes) Sold: $618,000 (4 homes)
Sale to list ratio 91%

West Cobb 600K-800K, Slab/Crawl/Part Bsmnt

Active: $670,100 (18 homes) Sold: $606,500 (8 homes)
Sale to list ratio 93%

** The ratios do not reflect expired homes that were relisted. If included, the
ratios will be reduced.

** The average sale prices do not reflect seller paid closing costs, the average
closing costs for homes in this price range is between 6K – 8K.

** With one exception the data groups include new homes and those with
basements (fin & unfin).

** The data does not consider updating needed/completed.

** This data considers the two West Cobb MLS areas – mainly west of 575 and
north of 120

** Of the 64 homes between 700K-800K homes, yours is the 12th highest.

================================

The offer price of 667,000 is 85.5% of the list price. Based on the data, it is
reasonable to say that an offer of 93% would be considered good. It is also
reasonable to say that the market is indicating that the current list price is
optimistic. My suggestion was/will be to reduce the price to at least $749,900
before even seeing this offer. I would strongly consider using that number when
considering this offer. The numbers:

779,990 @ 93% = $725,307

749,900 @ 93% = $697,407

Using the 749,900 as a base leaves $82,900 between list and offer. Using the
actual list price leaves $112,900 between list and offer. I want the former
number for your use; the latter for his.

It’s critical to note that this is a cash deal, no mortgage nonsense. No closing
costs are asked for and the closing will be 10/29. The stipulations aren’t unusual
or of concern.

It’s obvious that there will be a counter and they expect that given the
aggressive offer. I suggest essentially splitting the difference; counter +60,000
or 728,000 with a faster closing date. It is likely that they will counter back,
perhaps at around 700 where they will hold. At that, the sale to list ratio (off
749,900) will be 93.3%. I will of course look to counter again and try and get as
much as possible without jeopardizing a deal.

Obviously I will work the agent as best I can to get as much on the counters as
possible, but the market is obviously not in your favor. While this is an
aggressive offer, I understand the logic behind it. This market is completely
saturated and it will remain in this state through this time next year. This is a
cash buyer so they are completely bypassing potential mortgage issues – an
asset they are using. A quick close is possible and I will push for the end of this
month – early Oct if needed.

I’ll be in my office tomorrow and I will give you a call – get your questions lined
up for me –

Hank
-------------END OF REVIEW---------------
As the only data that matters is that of the closed sales, this is the focus of the review. I
also kept the review to a more specific level so that the best look at recent trends can be
developed. In this case the data will be specific to 4BR homes, 2.5B, slab or crawlspace
in Pope; I eliminated the homes with more than 2 full baths. To get a larger data pool I
also expanded for a look to include Pope/Lassiter/Walton. One of the main things I look
to develop is the list to sale price range; how much of list price are buyers paying. Once
that range is developed, it’s applied to the subject.

The data:

• In Pope, the average sale price is $260,433. The sale to list price ratio is 95.53%
• In the consolidated look at Pope-Lassiter-Walton the sale to list ratio is 95.4%
• FMLS stats show that the three areas that comprise “East Cobb” have a combined
sale to list price ratio of 94.71%. This is for all properties, all price ranges – I look
at this as the “strategic” view as opposed to the more specific or “tactical” view.
• Note that these ratios do not consider closing costs – they are determined only by
price at contract and final contract price.
• Given the list price of 314,900 and applying the ratios, the math looks like:
o 314,900 x .9553 = 300,824
o 314,900 x .954 = 300,415
o 314,900 x .9471 = 298,242
• Statistically, the offer of 300,000 is dead on

The next factor that has to be considered is closing costs. Running through the closed
sales since the beginning of the year shows that the average seller paid closing costs
were 5,300.

The variable that’s not available for review includes seller concessions like warranties,
termite bonds, personal property and other things done to facilitate a deal. As those
items are not considered by underwriters/appraisers they are not included during the
analysis of data.

Again, the math is simple – call the avg from above 300,000 and deduct 5,300 in closing
costs; the result is a net of 294,700.

The offer on the table has the following high points:

• Offer of 300,000 with 9,000 closing – net 291,000

• Closing date of 8/24
• 3000 in earnest money
• 14 day due diligence period – simply put they have an “option” on the home
during that period to do whatever research they deem important. If they kill the
deal, they must do so during that period, after that they are locked into the deal.
Appraisal period is 24 days. These time frames begin when a contract is agreed
upon.
• Stated financing is conservative – 20% down with a 30 yr fixed rate mortgage
 • They are asking for the fridge, a home warranty capped at 439, light fixtures to
replace the ceiling fans in the BRs and a termite repair and retreat bond valid for a
year from closing.
• They do not have a house to sell.

Opinion:

• Statistically, this is just about right on the data with the exception of closing costs.
The other concessions (outside of the light fixtures) are common and things that I
would ask for. As far as offers go, I don’t see anything that precludes getting
something done. They are starting about par so the objective will be to get as
much from this point as possible. This is far from a low ball or aggressive initial
offer.
• There’s a 4,000+- spread between this offer and the statistical average. Other
variables that have to be considered include the bedroom count of the house –
several have commented that it’s a 3BR with a bonus, which can be strongly
argued. Many of the comps are full 4BRs with a garage bonus. The issue of the
creek, public’s reaction to water and diminished utility of the yard have been
mentioned. On the flip, it has been updated with the kitchen and recent
paint/carpet work.
• You should not expect to net 315,000; I see a net of 300,000+- as being well
supported on the house given the feedback and data. That puts you above the
average sold price as indicated for the year so far.

Suggested course of action:

• As none of the concessions outside of the light fixture request are atypical, I’d
leave them and focus on price/closing costs.
• I would move the closing costs to 6,000K and the purchase price to 311,000 –
that’s a net of 305,000 which I think is a strong price for the home. It’s a stong
counter but one that indicates a willingness to get a deal done.
• I would expect that they would counter back probably in the range of a 300,000
net at which point you would have achieved what I would say is a very good price
for the home. This seems to be a well qualified buyer, no contingencies that will
close in six weeks.
• Focus on the net as it’s the most efficient way to cut through the numbers being
moved around. Some buyers need more closing costs than others so working off
net is the best way to accommodate that.

------------------END OF REVIEW----------------------------
Statistical data:

Highland Colony Overall (closed since 06/01/07)

96.8% to 97.6% sale to list price ratio

Same MS/HS since 01/01/08 (with as comparable homes as possible)

89.2% to 94.7% sale to list price ratio

TrendGraphix Data for 30075, 200K-275K, since 10/07 to 12/07

91% to 98% sale to list price ratio
15 month sales drop of 44.4% / 12 month sales drop of 58.3%
15 month pending drop of 50% / 12 month pending drop of 72.7%

If we apply that to the list price, we get indicated ranges (rounded) of:

1. Development - 242K – 244K

2. Schools - 223K – 237K
3. TrendGraphix - 228K – 245K

Consider as well that average seller paid closing costs run between 3100 and
6900; call it an avg of 5K at this price range. That leaves an adjusted range
off the list price of 218K to 240K

Your home isn’t going to fall into the bottom of the range, but it’s also not
going to be at the top. The issues we heard last time and have a bit already
include the lot, the front stucco, the idea that water will collect in the
driveway area and the likely need for mechanical/deck/retaining walls/roof
updating. This agent hit each one of those as she explained their logic for
the offer. She did say that the updating completed inside was much nicer
than many homes they visited.

This offer is 230 with 0 closing costs – for an indicated price of 230K or
92%. While lower than the community range, it is in the middle of the
school range and close to the middle of the trend graphix range over the last
several months. The starting point for this doesn’t appear bad based upon
the data.

Strength of the offer: The major positives here:

1. Preapproved buyer with no home to sell (this will be verified as part of

the counter although she verbally told me this)
 2. Closing 2/23 – this would seem to coincide with your other closing –
we can massage that as needed to avoid you having to store anything
and make the move as easy as possible.
3. No closing costs asked for
4. She is asking for nothing in the way of work to be done
5. No crazy stipulations or back door clauses, just a standard due
diligence period.

You know what the market is and the TrendGraphix data is a bit brutal
graphically representing it. While my first reaction was to go back hard, after
review of everything I’m going to suggest it might be better to consider a
“normal” counter. I had a good conversation with the agent, she is aware
that this home is well priced, she also made me aware that she did her
homework and knows the history as well as the issues/concerns that are
present. Of course I had to counter by asking her to show me homes like
yours that are priced and situated like it is…we each made our points and
agreed that all expect a counter.

So – here’s what I’m suggesting – and naturally we’ll discuss this as this is
my opinion only:

1. Purchase price to be 243K. That is a bit over the 10K split but it gives
us a bit more for the counter back. I think it shows that you are
interested in making this work while recognizing the current and
expected market, current inventory and issues they consider important
at the house.
2. We’ll make it clear that the house is largely “as is”. I will explain to the
agent that you’re not putting any money into the deal based on
inspection nonsense. If safety/code issues are noted then we’ll talk but
it has to be something significant.
3. Adjust the closing date as/if needed to fit your requirements
4. We’ll request evidence that she has the funds available to close.

There’s not much else to counter and this is a very clean offer. If we counter
at 243K, I would expect we’d settle around 236K net when all is said and
done. If you look above, that puts you well in the current ranges – with a no
contingency deal closing in a few weeks.