Trying to Determine Property Value When Selling a Home
If you’re thinking of selling your home, one of the first things you’ll want to do is determine its current market value. This can be a tricky thing for homeowners to estimate, as emotional attachment and sentimental value often affect your idea of a “fair price” for the property.
One option is to reach out to a licensed real estate professional who is familiar with your city and neighborhood. He or she can pull information from comparable properties (similar homes located in the same area) and they can research public data through trusted resources. Using the data, they can put together a comparable market analysis which can help you gauge where you might want to set your list price. The agent will likely take into account items such as square footage, age of construction, amenities, bedrooms/baths, as wells as, past, active, and expired listings.
If you want to get the most accurate value, you’ll want to contact a licensed, experienced real estate appraiser in your area. Real estate appraisers do this exact thing for a living and are not concerned about becoming your listing agent. The downside is that appraisals do not come cheap (often $300+ depending upon your market and size of your home). It is important to note that the appraisal will be solely used by you and cannot be transferred to any potential buyers as the lender will want to order their own appraisal.
If you want to just get a rough idea without having to contact a real estate agent or real estate appraiser, you can try to calculate your home’s market value by taking the following key factors into account:
- Overall location (a major influencing factor for buyers): Is it close to shopping, schools, medical facilities, interstates?
- Neighborhood: What’s the overall state of your neighborhood? Is it well-maintained and upper-class? Is it full of distressed properties or in a high crime area?
- Size: How many square feet? How big are the rooms?
- What other nearby houses are selling for: While you may not be able to easily access as much data as a real estate professional can, you can still do a quick web search to see what homes are being listed at and what they’re selling for in your area. Be sure to only look at similar homes. If you live in a two bedroom starter home, the four bedroom house that sold down the street probably won’t reflect a price you can get. You can also check Zillow.com although the results can be a mixed bag.
Other determining factors for market value include:
- Amenities and extras
- Proximity to attractions/points of interest
Remember, getting a fair market price for your home will depend on several factors. You may need to consider working with an experienced real estate professional and/or real estate appraiser to get the best deal for your home. If your set on going the for-sale-by-owner (FSBO) route, you should really think about paying for an appraisal to properly determine a reasonable asking price.
3 Tips for Pricing an Initial Offer When You’re Looking to Buy
Determining how much to offer for a home can be a daunting task. There are numerous factors to consider because when it’s all said and done, no one wants to feel like they paid too much. Although your real estate professional may be able to give you some guidance, it is ultimately up to you to do all the necessary research before you submit your initial offer. Here are 3 quick tips to consider:
1. Assess the market – Is it a buyer’s market or a seller’s market? Do you have competing buyers who are also very interested in the home? In a less competitive market, sellers tend to be more receptive to lower offers because of the lack of buyers. On the other hand, those house hunting in a seller’s market should bear in mind that keeping your offer close to the listing price should work in your favor, especially in a situation where multiple offers are coming in.
You should also have a look at comparable sales. There are numerous ways to obtain this data such as Zillow.com, RealEstate.com, or simply ask your real estate agent for a list of comparable properties that have sold recently in the area.
2. Days on Market (DOM) and history – Find out the DOM, or number of days the home has been on the market. Check to see if it has been on and off the market and relisted. Also find out how much it sold for the last time it was for sale. Was it purchased for much less than it was worth during a depressed period? If so, chances are it hasn’t appreciated much and that should be reflected in the price. An offer closer to the asking price would likely be in order in a seller’s market, in an appreciating market, and if significant improvements have been made.
3. How motivated is the seller? A very reasonable question to ask when considering a home purchase is, “Why are the owners selling?” If they want to downsize or move to a neighborhood with more amenities or just want a change, then they may not be too likely to entertain a low offer. Sellers who are anxious to sell because they need to relocate for family or work reasons will be more motivated to sell. If you are looking at a home that is already empty, the seller could also be paying two mortgages, which is another indicator that they may be willing to go below the asking price.
As you get closer to the check/checkmate or offer/counter offer stages of a home purchase, do your best to remain detached and unemotional. Be realistic about your budget, and avoid paying too much, no matter how much you love it. Just as there’s more than one fish in the sea, there are many wonderful houses out there, and you will find the home that’s meant for you!
Please not that we are not real estate professionals and we recommend that you consult with a licensed real estate agent for advice on buying a home in your community.