Entry #29, March 2, 2010
Before you run and put the “For Sale” sign out, determine what is going to be the asking price for your home. Wait! The rules and the market have changed. Just because you spent 4 weekends working on refinishing the back porch, doesn’t mean you can ask for $50,000 more dollars. Let us show you 3 ways to help you determine the asking price for your home.
1.) Research: Understand the market. 5 years ago, the
blood, sweat, tears, and especially money put into a house usually meant profits and appreciation of most houses being sold. Currently, the rules have changed. Depending on your location, desirability of the neighborhood, and recent sales, you or a Realtor you hire will need to do the research.
2.)Appraisal: Hire a professional, certified, residential appraiser to come inside your home and appraise the value, as it stands today. Bankrate.com has some guidelines on hiring a good one. Remember, an appraisal is only good for 3 – 6 months from the time the appraisal was administered. This number can fluctuate depending on how volatile the housing market is. The appraisal will give you an estimate of what range your home could sell for, IF a buyer is willing to pay, AND a lender’s appraiser doesn’t come in with considerably less numbers.
3.) Comparable sales and listings: Comparable sales are homes that have sold within a given time period, and are comparable in size, age, location, style of home, etc… If all of the factors aren’t exact, as many as possible should be used to price your home against. Once again, 5 years ago your neighbor Mr. Smith had upgraded his home at the same time you did. So naturally when it came time to sell your houses, you all were on equal playing fields. Today, Mr. Smith’s home could have sold as a short sale or foreclosure home, which will bring down your ability to ask for a higher price that you had anticipated. Also research other houses that are listed on the market currently. Getting close to your asking price is one thing, but getting people in the door is much bigger. If your home is priced way above your neighbor’s listed home, you will never see any foot traffic. Try Domania.com for finding comparable sales in your area.