Top Mistakes Homeowners Make In Determining the Value of Their Home
No one wants their home to be on the market for months while generating no interest from buyers. If you have a home that just won’t sell, do you know the reason? One of the most prevalent reasons for a home not selling is that it has been overpriced according to its value and the surrounding market. How do most homeowners arrive at their listing sale price? Unfortunately, so many sellers use less than reliable methods of deciding the list price and as a result, they end up wasting time without selling their home at all.
Here are the six things that inexperienced sellers use to gauge their selling price, plus a list that explains what you can do to make sure your home is priced perfectly to sell.
What Not To Consider When Determining the Value of Your Home
THE AMOUNT PAID TO PURCHASE THE HOME
Just because you might have paid a certain amount for the home does not have anything to do with the current market value of the home. Many homeowners falsely believe they will be able to recover the same amount (or more) as they paid initially, regardless of how the market and economy is performing today.
THE MINIMUM PRICE SELLERS NEED
In a market clearly controlled by buyers when sellers do list their home it is often because they cannot avoid it. Either relocating for a job, no longer able to afford the house or they need the money and plan to use the equity of the home. Often sellers feel that they can set their price according to their need rather than what the current real estate market dictates.
WHAT HOMEOWNERS WANT
Everyone wants to get the maximum amount possible when they sell their home. Many times homeowners self-evaluate the home’s value based on what they see as years of upgrades, maintenance and care.
HEARSAY FROM NEIGHBORS
When others in the same neighborhood talk about the value of their homes, they too are often misguided in how they came to the value. Still it is common for homeowners to want to believe that if the neighbors’ home is valued at a certain level, theirs should be too.
THE COST OF REBUILDING IN TODAY’S MARKET
Inflation is a factor affecting how a home is maintained over the years after purchased. This does not, however, carry over to the home’s value. Often sellers try to incorporate the inflated cost of rebuilding in today’s market – a formula that simply doesn’t work.
THE HOME’S VALUE ACCORDING TO ANOTHER AGENT
There is no shortage of agents and when they are competing with each other one thing that can and does occur is false claims of yielding a much higher sale price on a home. Though it may seem attractive at first, the result is often an unsold home that rarely receives any offers.
How To Price Your Property Perfectly to Sell
EXAMINE COMPARABLE SALES
The best way to determine the price of a home is to evaluate comparable properties in the same area. Not only does this include location, lot size, property type and square footage, but a Comparative Market Analysis also looks at amenities in the home, types of flooring or other structural aspects as well as the amount of remodeling or renovation that may have been done on the home.
HAVE A PROFESSIONAL APPRAISAL DONE ON THE PROPERTY
Prior to approving a mortgage many lenders require an appraisal performed on the home. A great selling strategy is to order an appraisal independent of the buyer’s requirement for a lender. Not only does this provide valuable insight as to what the maximum valuation of the home will be per the lender but it also allows the sellers to corroborate the price with potential buyers.
EVALUATE OFFERS RECEIVED ON THE PROPERTY
If the home is already on the market, one way to consider whether you have overpriced the home is to take a closer look at any offers that have been made on the property. Do they align with the current fair market value? Are other similar homes in the neighborhood also selling within the same price range? It is important to answer these questions to find out whether buyers perceive your list price as realistic or over the top.
HIRE AN AGENT WITH A PROVEN TRACK RECORD
Qualified, experienced agents are paramount to helping you determine the right price to set when selling your home. If you choose a Realtor that is well versed in the area and specializes in the vicinity where you are located they will be able to assess your price range based on other like kind property sales through CMAs. Through direct experience, their knowledge and insight almost always results in accuracy and in turn, quick results.