Selling your house - Setting a home value
A home that is priced right will sell in any type of real estate market
"Priced to sell" is a commonly used phrase in the real estate industry. So just what does it mean? When people have made the decision to sell their home, they usually need to get it done as quickly as possible. This is so that they can use their proceeds as a down payment on a new home, or perhaps they have bought a new home on contingency and need to sell the old home in a hurry.
The single most important step in the process of selling your home is pricing it correctly. If you overvalue your home, it won't sell. If the house is undervalued, you leave money on the table. A house that is priced correctly should sell quickly in any type of real estate market.
There are two primary methods of determining the sale price for your home both of which involve the use of professional services.
A market analysis compares your house to other recently sold homes in your area. The recently sold homes will be similar to yours in terms of square footage, number of bedrooms, bathrooms, lot size, and amenities. The analysis will include the listing price, the sale price, and number of days that the house was on the market.
Market analyses are provided by realtors at no charge. Realtors are happy to provide this service as they hope that you will list the home for sale through them.
You can also obtain market analysis reports through online services. For a modest fee, these companies will provide you with a detailed report about your property and a value range based on comparables in your area.
A professional appraisal will cost anywhere from $300-$450 depending on the appraiser. If you feel comfortable with your realtor's market analysis, then this may not be necessary. If, however, you are planning to sell your home by owner (without the services of a realtor), an appraisal is a must.
Make sure you hire a state certified appraiser to provide this service. Appraisal fraud has become a big issue in the real estate industry. Fortunately, there are easy steps that you can take to avoid this trap. Check out Fraud Guides for more information.
An appraiser will do a very thorough analysis of your home and will document everything on an appraisal report. This report will include a market analysis similar to what a realtor will provide. The report will include a final appraised value for your property.
Market value and appraised value are not the same thing. Market value is the highest price that a property will bring in a competitive market. It is usually higher than the appraised value. There are various feelings about how to value homes in light of appraised vs. market values. We will use the following:
- In a seller's market - Add 10-15 percent to the appraised value.
- In a buyer' market - Add 5 percent or less to the appraised value.