A blog cannot deal with all aspects of a subject and is not intended to replace professional advice. It's purpose is to highlight information and identify areas of possible interest. Anyone wishing to discuss this blog or to make any comments or suggestions about this blog is invited to do so by either posting comments or emailing me directly.
March 10, 2013
How Much is Your Home Really Worth?
Location can play a significant part in determining whether a house sells quickly or remains on the market for months. In economic times such as these, your home's location is no longer quite as important as price. Quite simply, consumers are much more concerned with their ability to afford a home.
Unfortunately, the houses that tend to get noticed are the ones that have only just been placed on the market. It's not unusual for agents to "pull out all the stops" when it comes to marketing these homes, including the use of email advertising, short-term print advertising, additional signage and repeated open houses. Many MLS® System boards reserve the special status of "Newly Listed" for new listings of under 14 days so they have even more significance. Sooner or later, however, the freshness of the new listings wear off along with all the attention. As these homes spend more time on the market potential Buyers may feel justified in making what could be considered "low-ball" offers. Waiting for what looks like an eternity can be a very daunting experience for Sellers. Plans to move into a new home may have to be postponed. Many Sellers may even accept a weak offer simply because the situation has dragged out for too long and they either become tired of the process or become desperate.
Conventional wisdom indicates that pricing a home to sell is the best way of making sure that you never fall into those same circumstances. Unfortunately, many Sellers do the exact opposite. Rather, they price their homes based on emotions and desires rather than current market info. Look around your neighbourhood for recently sold homes. Check to see which ones are comparable to yours in terms of size, amenities, age, etc. This will give you an idea of what your own home might be worth. If there is a preponderance of homes on the market in your area then you may have to have a competitive price to attract attention.
Anyone planning to sell his or her home should consider getting an appraisal done by a licensed appraiser - afterall, a lender will most likely complete one for the buyer and base their loan approval on it. While real estate agents can perform a Comparative Market Analysis, this is clearly not the same thing as an appraisal. Most agents haven't taken significant appraisal courses (other than the brief overview in the introductory licensing program) and aren't trained nearly as extensively as licensed real estate appraisers. Real estate agents also consider market trends and often make subjective forecasts (sometimes these are overly optimistic). Furthermore, many real estate agents provide them "free of charge" in anticipation of getting your home to market for sale. Some may even "buy your listing" which is an industry term for providing you with an unrealistically high price to get your home under contract to sell (telling you "what you want to hear" versus "what you need to hear") - then, over the course of the next several weeks beat you until you lower your price. In contrast, an appraiser is knowledgeable in all aspects of property valuation techniques and standards. Their appraisal is only a snapshot in time - based on historical events (past sales). Their compensation is not dependant upon your sale and they have no reason to tell you an over (or under) inflated value. While the appraisal may not conform to your expectations about what your home is worth, it will nevertheless provide you with an objective and educated opinion.
In the end, only the "free market" can decide a house's value: i.e. What a Buyer is willing to pay and what the Seller is willing to accept. Your home is special to you because you have so many memories there. But to a Buyer, it's just another home on the list. Pricing your home to sell is a good way of making your home stand out from the competition.
I provide quite a detailed Comparative Market Analysis as the very first step in marketing homes for sale. Once you know what your home's "market value range" is and if we establish an Agency Relationship - I can then provide you with a potential selling price range based on the marketing plan you choose, the market activity and your motivation for selling versus only today's market value. If you need any help determining the price of your home, just let me know!
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