If you plan to sell your home in the near future, calculating the property’s market value first can help you get the most for your sale. (Important to note: even though the economy was placed on a temporary pause due to the pandemic, it seems that prices will remain stable throughout the rest of 2020.) When determining the value of your home, be sure to consider the most important factors: its location, size, comps, finishes, renovations, condition and school zone. These seven features significantly impact the value of your property. Homeowners who are preparing to put their place on the market should also pay special attention to these key factors when pricing their homes.
1. Remain Objective About Your Home Value Estimate
Sellers think that their home is worth more than it is, because of their personal attachment. It is hard to break down years or decades of memories in a home to a number. It’s also hard to accept that your home is worth less than what you paid for it, or that you can’t just add on the full dollar amount of the renovations you’ve made. Remember that your home’s value is determined by a variety of factors – market conditions, the sale price of comparable homes in your area, and the style, size, and age. In the end, your home’s value is determined by what buyers are willing to pay.
2. Review recently sold or listed homes in your area
Ask any Realtor what the most important factor is when it comes to a home’s value, and they’ll likely tell you: “location, location, location.” Your property’s proximity to everything from local amenities to local highways will all dramatically affect the value of your home. A great first step in determining your home’s value is to look at recently listed or sold homes in your area. This will give you an idea of what the going price is for similar homes nearby. It is important to look for homes that are similar in square footage and have comparable amenities to the home you are preparing to sell. Depending on the features your home currently has, looking at homes that are significantly larger or have different amenities may not reflect the value of your home.
Once you’ve narrowed down homes in your area to those with similar characteristics, the most important things to look at are sold price, listed price, and days on the market. This will give you an idea of the pricing strategies in your area. You should also look at the condition of these homes to see how your home compares. For example, maybe these homes have upgrades that your home doesn’t. Depending on what features you find in these homes, you may want to consider making updates before listing your home to sell.
3. Use an Online Comparative Valuation Tool. Maybe websites, such as Zillow or CoStar, can help you build a rough estimate of your property’s market value. Most are free and easy to use. They can quickly give you an estimate of your home’s value, often without having to provide a lot of info about your home. Provide honest information to achieve accurate results. Remember to include any upgrades or remodeling work done in your home since you purchased it, as this can raise the value of your home, sometimes significantly.
4. Seek out an Expert Local Real Estate Agent
If you’re on this website you’re in luck. At Delphi, we have the top local real estate agents working for you, and we will help you get competing proposals. These proposals often take the form of a comparable marketing analysis (CMA). Our top agents will conduct some basic comparable analysis and account for factors such as recent renovations, schools and walkability, new city ordinances, safety, etc. We can also provide valuable curb appeal tips to increase your home’s selling point prior to sale. Our agents also have access to MLS data which provides them with greater insight into your local area. These are all things you will want to properly determine your homes value. Call us at (925) 705-1300 to start your home-selling journey.
5. Find Out the Condition of Your Home
Location and square feet aren’t everything when it comes to the value of your home. Its overall condition is just as important. For instance, a creaky, dilapidated home won’t be worth as much as neighboring properties – even if the home is large and located in a highly desired neighborhood. When calculating the value of your home, be sure to consider the overall condition of the home. Also important to note: just because a home is old, doesn’t mean it’s worth less. Believe it or not, an aging home that has been well taken care of is frequently worth just as much (if not more) than a newer build.
6. Have a Professional Appraisal of Your Property Completed
An appraisal is an unbiased professional opinion of the value of a home and is used whenever a mortgage is involved in the buying, refinancing, or selling of that property. An appraisal can back up the research you’ve already done with online valuation tools or a realtor’s CMA. The appraiser examines the interior and exterior of your home, taking photos and noting its overall condition. A well-qualified appraiser creates a report based on a visual inspection, using recent sales of similar properties, current market trends, and aspects of the home (e.g., amenities, floor plan, square footage) to determine the property’s appraisal value.
Unfortunately, if your neighboring areas have experienced new sales, that can lower your home’s appraisal value. If you feel that your home’s value has been dragged down by the sale price of nearby properties, you may be able to convince the appraiser that your home is worth more if it’s in better condition than those properties. The low appraisal and the motivation to turn it around, may create some ideas for repairs or improvements you can make ahead of the sale to increase your home’s value.
You’ve considered your agent and partner’s advice, and the three of you have agreed on the right price for your home. Even after the listing date, price should be an ongoing discussion between you, your partner and your agent. Markets are fluid, so it’s possible that you’ll have to make tweaks. It is important to to stay in continuous dialogue, especially with your agent. Together, keep your eyes on the price. The reason isn’t just to foster the kind of open communication that’s important to any relationship. It’s that if you’re not on the same page about price or the other things that are important to you about sale, each subsequent step of the selling process will be impacted by that tension.
Remember, the goal is to sell your home at the right time and the right price according to your needs.
For comments or inquires contact:
Alex Khodadad, Broker, CPA
1930 Contra Costa Blvd.
Pleasant Hill, CA 94523
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