How Much Is Your Home Worth?
There are several factors associated with calculating the value of a home, which can make estimating a little confusing. Since pricing a house is one of the most important parts of selling, it is important to take a multifaceted approach in order to quickly get a great offer. Ultimately, a home is worth whatever another individual is willing to pay. Like depression glass or plastic star wars action figures, value is in the eye of the beholder. However, if you are trying to sell a house, timing is another issue, and so your price must be competitive and profitable.
There are several things to consider in coming up with the right selling figure. Probably the most obvious and relevant factor is the home prices in the surrounding neighborhood. You can look some of these sale prices up in public records or simply ask some of your neighbors what they bought for. The more data you can collect about house prices near by, the better your pricing foundation will be. Then consider what comparable homes sold for 6 months ago, or even one year ago, and how long did they stay on the market before selling. Comparable homes should be in a similar area, have similar square footage, and consist of similar building materials. Brick homes, log homes, and adobe homes obviously have different values depending on cost of materials and buyer preference. Home improvements are another major addition to the physical value of a home. Reflect on comparable home sales and attempt to calculate the price differences following similar improvements.
The real estate market plays a large role in the selling price of a home. Is it a buyers market, meaning there are tons of homes for sale and lower prices, or are there more buyers than places to purchase? Consider how many home are for sale in your particular neighborhood. Also, are there open plots of land nearby, where other homes might be built? The specific market scenario of a neighborhood may fluctuate based on these factors. How many foreclosures have occurred nearby, and are their any city or corporate construction projects planned for the near future? The value of a property will change quickly if it goes from having little access to immediate highway access or if a new factory is built next door. You can chart your neighborhoods appreciation rate by taking a sampling of sales records at various times and averaging the prices.
Begin calculating a sale price by using an average comparable home price and then add or subtract according to other factors like remodeling, city plans, appreciation, etc. The objective is to develop a selling price that is both competitive and profitable. If you can sell your home several months earlier by selling if for $5K less, it is usually worth it. Remember that you are still paying interest on your mortgage in the mean time. For professional help, look online or consult a real estate selling agent.
About the Author: A true innovator, Von Sutten founded Ready Real Estate in order to put more money back into the pocket of the Dallas single family home buyer. Ready Real Estate has since grown to become a top Dallas real estate company and is the only one that pays its buyers a 1% Cash Back Rebate and offers Full Service Listings for only 4.5%.
