WHAT IS YOUR HOME WORTH?
Straight and simple. Your home is worth what a purchaser is willing to pay for it. In real estate terms the value of your home is called its market value. The definition for market value is: “the highest estimated price that a buyer would pay and a seller would accept for an item in an open and competitive market.”
Certainly all of us believe we have the best home on the market. But if other homes similar to yours are selling and your home is not, then a CMA or Comparative Market Analysis may be what you need to determine its true value. The value of your home should be determined by using comparison sales and not emotion.
If your home isn’t selling then you have to price it right. This is where a real estate professional with local market expertise can help. Using comparative sales, your REALTOR© will compare your home with homes that have recently sold, homes with similar plans, amenities and features, homes similar in age and condition and location. Realtors analyze and adjust and then calculate values.
A savvy REALTOR© will know values in the local market, know what buyers are looking for and how your house stacks up to the competition. They can also help with suggestions on upgrades and repairs that will help your house rise above the competition to help it sell.
A general rule in a good selling market is that if you have no showings in the first two weeks that your home is on the market, then something needs to be adjusted. Either the house isn’t being marketed properly or the price is too high. Lots of showings means it is marketed well but if you get no offers that is another indication that the house may be overpriced for the market.
One of the pitfalls if your house is overpriced is that it can sit there for months and get over exposed. Almost the first thing a prospective buyer asks is how long the house has been on the market. No matter the reason, a buyer will automatically think they can get it cheaper and will offer much less than the asking price.
By overpricing your home, you can lose money and time. If the house is priced high and the house stays on the market for let’s say 6 months, you have effectively lost 6 months of house payments, accrued land taxes and insurance payments. You are also losing months of time you could be enjoying living somewhere else.
The house doesn’t have to be a palace with everything completely repaired to be but on the market but the house needs to be marketable and in good enough condition to be financed. Most lenders want a house to be safe, sound and sanitary. Cash buyers are few and far between. So most buyers will need to get a loan. In addition to getting a contract on your home from a willing and able buyer, the home will have to appraise for at least the purchase price.
Don’t rely on online estimating sites. Those values are not always accurate. They are based on tax information, past sales of the home and neighborhood or similar house sales and web site and internet algorithms. No one from these online sites really know the local market, let alone the unique characteristics of your home and property.
Similarly, don’t rely on County Tax Assessments for your current home’s value. The value they assign to the home may be from a year ago or from a mass assessment of similar homes in your neighborhood. And what you paid for your home may have no relationship to what it is worth now because markets change week to week, depending on what sales have recently closed. And recently means within the past 6-9 months.
When you price your home, be prepared to negotiate. Both buyers and sellers have closing costs. Typically the seller pays what it takes to transfer the clear title to the buyer and the buyer pays for his loan closing costs and insurance. Be prepared to allow for some seller assistance with the buyer’s closing fees, sometimes called seller concessions. Everyone wants to get a good deal and if your home is priced right, both the seller and the buyer should walk away from the closing feeling good.
A REALTOR© can explain what you, the seller, would be expected to pay for in a typical sale and they can advise you what a buyer in the current local market will expect to pay.
At Azalea Real Estate in Grand Bay we can help you determine the value of your home with a free market analysis. We will answer your questions and if listed with our company we can help guide you through the sale of your home. Why not take advantage of our years of experience? Visit www.mygrandbayhome to search for homes or contact Aleta Boudreaux, REALTOR© at 251-656-4576