What is my house worth?
Knowing the value of your home and deciding on the most advantageous list price can be a confusing task.
There are many sources of value estimates and information – assessed value, past appraised value, Zillow Zestimate, Realtors, all-knowing friends, etc. Here are a few important points to consider while answering the question “What is my house worth?” and deciding on a list price:
Assessed values are set to provide a tax basis for the municipality. They often lag behind the actual market value and do not properly reflect the market value that a buyer may be willing to pay. Your assessed value should be used as nothing more than a footnote in the overall analysis of the value of your property.
An appraisal follows a set of rules implemented by the lending industry to prove the value of your property on paper. Often times, a buyer may be willing to pay more or less than the appraised value. Further, if an appraisal is more than 6 months old, it holds little indication of current market value.
Your Zillow Zestimate might be right on or it might be 20% over or under market value. To the best of our knowledge, Zillow averages the dollars per square foot of recent sales in your neighborhood and then multiplies that number by the total square feet of your home. If your home has nicer finishes, a bigger lot, mostly above grade square footage, etc – none of these things are taken into consideration.
Everyone has a friend that knows everything, right? Take your friends advice on things like the best restaurant in town or where to buy your socks. Leave your major financial decisions, like the value of your home to a professional.
An experienced Realtor, who invests the time to do their homework, and produce an unbiased report, is the best judge of how much value your home should bring in the current market. A few things to consider:
- There are agents who will tell you what you want to hear to get your business – the higher the better, right? Overpricing your home might get your hopes up and get an agent your listing, but it’s not in your best interest. Overpriced homes take longer to sell and end up selling further below the list price than a well-priced home. Make sure to hire a competent realtor that you trust to provide honest advice and work together to set the list price.
- No matter how well your realtor knows the market, make them put it on paper. There are 10-20 common variables that impact a buyer’s opinion of value. Considering 10-20 variables across 3-4 different comparable sales, and summarizing the findings is a mathematical equation that most realtors (or anyone for that matter) cannot calculate in their head. A well-done price analysis will show you exactly why your home is worth more or less than the recent comparable sales.
- Take into consideration the current state of the market. A well-done analysis, on paper, shows you the value compared to past/recent sales. But guess what, if a few of your neighbors decide to sell at the same time, their prices may provide a competitive market and limit your final sale price. On the other hand, if there is no competition and the market is hot, there may be an opportunity to sell for more than what the past/recent sales suggest. If so, go get it!
Included with our $2,500 listing program, at MHB, we use a minimum of 14 variables in our price analysis and we find 3-4 comparable sales. Once we’ve laid this all out on paper, we’ll show you the comparable homes along with the values we’ve assigned to each of the individual differences. We understand the value of certain things can be subjective and we’re happy to take our clients opinions into consideration and make adjustments to the analysis on the fly.
Reviewing all of the details with our clients becomes an educational process. It gets us to the same point of understanding and helps us make an informed decision together. Many times our clients have different levels of motivation to sell, which we are happy to factor in as well. In the end, it’s your home. You should make the final decision on the list price after taking all things into consideration.
– Dan Tenney / Founder / MHB Real Estate
Your home sold. A bigger check at closing.
MHB provides an outstanding, top rate real estate service, at a one rate fee of $2,500 - $500 upfront and $2,000 at closing. We still offer to pay buyer's agents a commission, but that fee is only paid if there is a buyer's agent involved.
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