Real Estate Tips
Determining a Home's Value
Value is in the Eye of the Beholder
Determining the list price is the most important component when putting a home on the market. Setting the price too high can discourage prospective buyers and could prolong time on the market, making your home seem less desirable. Pricing the home too low will result in losing money on your investment. Many factors contribute to a home’s value, including location and market value. A Realtor can help you arrive at a fair market price.
There are several ways to help accurately determine a home’s value.
Comparative Market Analysis. A Realtor can provide a Comparative Market Analysis (CMA). This report helps establish the relative value of your home by comparing homes in your area that are currently on the market and recently sold properties with similar characteristics. Comparables include neighborhood, number of bedrooms and baths, lot size and certain amenities (e.g. pool, garage space).
Appraisal. For a fee usually between $200 and $400, a professional appraiser looks at several factors to determine a home’s value. Appraisers research the current market value of similar homes in your area, fluctuations in the real estate market and previous sales and tax records of the home, as well as compare census data regarding local home sales.
Buyers hold the cards. Ultimately, buyers create the value of a home. The value can vary, depending on supply and demand in the market. Both a CMA and an appraiser help sellers to find out market ranges for a home’s listing price, but no two homes are exactly alike and therefore no two will sell for the exact same price.