Price it low and let it go, or price it high and hope they
buy?
Understanding your homes true value
Unlike
the stock market, commodities trading, or simply the price of milk, there isn’t
any “set” value for Real Estate.
We have different and separate values to review, but no true calculation
of fair market value when discussing Real Estate. Sure, we have averages and comparables to review – but besides
that, if seeking true market value we are simply left to our own devices. This can be a hindrance or can be
beneficial depending on how you strategize your homes sale. If evaluated correctly your home will
sell in a speedy timeframe and for
top dollar. Done wrong and you’ll
be leaving thousands in your buyers pockets. Take these considerations into account when estimating fair
market value for your home.
Understand your Comparables
The
number one factor we have when calculating Real Estate value are our
comparables, or ‘comps’.
Comparable home sales in your community will give a good understanding as
to fair market value for a particular home. Understanding what
buyers are paying for however is a crucial step when strategizing. Simply viewing a sales price, beds and square
footage is not enough, many factors need to be reviewed and understood. Upgrades, Lots, Views, Pools, etc. are
all factors that will have a significant role in a homes value. Price per square foot is a start, but
it’s certainly not the end game when deciding list or prospective sales
price. Owners and agents must take
into consideration factors that will increase or decrease value based on
comparables. Be proud of what your
home offers, and don’t be afraid to ask a premium for your upgrades or lot
features. When the original
builder sold the home, premiums were added for these items, why shouldn’t they
be now?
Know what you’re up against
An
often-overlooked piece of the pie when pricing is to understand what you will
be up against when listed. What
other homes are currently in inventory when you are going to market? A simple tip to help understand your
competition is to see it! Football
coaches spend hours studying the opposing team before game day to understand
their opponents weaknesses and strengths, why not do the same? Once an estimated price range is
reached, spend some time reviewing what buyers will be seeing before or after
touring your home. What benefits
do you have over others and vice-versa.
Obtaining top dollar takes knowing the competition and reacting to it effectively.
What does Uncle Sam say your home is worth?
We
all get tax bills and as you know these bills are calculated on value of
property. What many homeowners don’t
realize is that the county sets values according to market conditions as
well. While the value cannot be consistently
up to date as it is completed on an annual basis, it gives a good starting
point to understanding what your home is worth. The county appraiser will show two separate values – Just Market
Value and Assessed SOH value. A quick study of information provided by
the county will tell you that ‘Assessed Value’ should sit at about 80% - 90% of
your homes current fair market value.
Use their calculations to your advantage; at the very least it will let
you know what range to not price below.
With
due diligence and proper guidance acquiring your homes value is not as hard as
some may think. Use these tips and
tools to understand where you actually sit in today’s market. Your home may be worth more then you or
others think!
