(Published on - 9/30/2016 12:04:36 AM)
What is my home value? That is a question I get asked all the time, at the gym, at our kid’s sporting events, at our church and out at parties and gatherings. Well that is a very loaded question; there are a lot of factors that go into determining the value of one’s home.Home pricing is more of a science than an art, but many homeowners price with their heartstrings instead of cold, hard data. Here’s why crunching the numbers is always the better route to an accurate home price as well as what can happen when home sellers overlook those all important data points.Homeowners often think that it’s OK to overprice at first, because — who knows? — Maybe you’ll just get what you’re asking for. Although you can certainly lower an inflated price later, you’ll sacrifice a lot in the process. The most obvious damage is a house that remains on the market for months can prevent you from moving into your dream home. Already purchased that next home? You might saddle yourself
with two mortgages, and worse, continually lowering the price could turn off potential buyers who might start wondering just what is wrong with your home.
You’ll get 70% of your traffic on sites that your realtor puts your home on in the first 2 weeks, so lowering the price after a few weeks will help it will not be the same as if you would have listed it correct to begin with.It’s easy for homeowners to stumble into two common traps:
1. Confusing actual value with sentimental value how much they assume their home’s worth because they lived there and loved the time they spent there.
2. Assuming renovations should result in a dollar-for- dollar increase in the selling price or more.Many homeowners think, my home is worth a bazillion dollar. If they put in a few thousand dollars’worth of new flooring, for example, they might overestimate the upgrade’s impact on the home’s value into the tens of thousands.
That’s not to say that renovations aren’t worth it. You want to enjoy your home while you’re in it, right? Smart renovations make your home more comfortable and functional but should typically reflect the neighborhood. A realtor can help you understand what certain upgrades can recoup when you sell and which appeal to buyers.
Another culprit for many a mispriced home is online tools, like Zillow’s “Zestimate,” that prescribe an estimated market value based on local data. The problem with Zillow and other online sites is they use “data only”, they don’t have a human factor, or what I like to call “Boots on the Ground”, involved which is critical when determining a home’s true value, a computer cannot differentiate between a turnkey property and one that needs tens of thousands of dollars’ worth of work, nor can it put a value on landscaping, hardscape, location, view, neighborhood, etc…
What is my home worth? The best pricing strategy, consult a realtor who will use something called comps (also known as “comparable sales”) to determine the appropriate listing price. They’re not just looking at your neighbors; they’re seeking out near-identical homes with similar floor plans, square footage, and amenities that sold in the last few months.
Once they’ve assembled a list of similar homes (and the real prices buyers paid), they can make an accurate estimate of what you can expect to receive for your home. If a three-bedroom track home with granite countertops and a pool down the block sold for $355,000, expecting more from your own three-bedroom track home with granite countertops and no pool is a pipe dream. After crunching the data,they’ll work with you to determine a fair price that’ll entice buyers. The number might be less than you hope and expect, but listing your home correctly not idealistically is a sure way to avoid the aches and pains of a long, drawn-out listing that just won’t sell.
Once your home is on the market, you’ll start accumulating another set of data that will serve as the ultimate price test: how buyers react. There is an easy way to tell if you’ve priced too high: “If we have no showings, it’s way too high. Lots of showings and no offer means you’ve marketed well but it’s overpriced once people get inside.” When it comes to finding a buyer, pricing your home according to data and the right data, at that is crucial to making the sale.
What is my home value?
If you would like a professionals opinion on what is the “true value” of your home pleas contact me at
951-315- 5605, Todd@ToddBruceGroup.com or go to my website at ToddBruceGroup.com