There are those who say that the true value of your home is what someone is prepared to pay for it. While this is true in an ideal world, the housing market is more complex than that. Of course, you want to achieve top dollar for that home. It’s probably the largest investment you have ever made, so how do you know what the true value is and who do you trust to tell you? The problem that arises from depending too heavily on someone’s opinion is that they may just want to achieve a quick sale, and undercut the true value of the bricks and mortar you invested in.
~Comparison.
Be aware of what the housing market is doing in your locality. It’s important to compare like for like. Often people make the mistake of confusing the prices of different kinds of homes. It’s fairly straightforward to do a survey of homes which have sold in your area, rather than homes which are for sale. The price being demanded for homes within your area may not be a realistic picture of what the going rate is. People are optimistic and try for a higher price than they will actually achieve.
If you can look at homes which show up in estate agent windows as sold, you can compare the following aspects to see how your home compares to others:
Area
Is the area suited to the kind of market you are selling to? The area dictates a lot when it comes to price. An executive home on a family housing estate for example will not sell at the same price as an executive home within easy commuting distance to businesses. Look at what you have for sale and the suitability of the area in which it is placed. This helps you to compare similar property which has been sold recently, and establish an idea of what value to place on your home.
State of the home.
Try to take a look at pictures on websites or in estate agent offices of interiors of homes which have sold. Chances are that websites are a better bet, since they may not yet have taken the photographs off the website. How does your home compare? Is it in great condition? How much modification would a potential purchaser have to do to get the home into shape? If the house is run down, it will achieve a lower price than one which is tidy and ready to sell.
Accommodation and square footage.
The square footage does come into play, as many offer a much larger living area than others. Look at house prices for similar sized homes. Look at whether the homes which sold had garages, pool, garden area etc., and compare what you have to offer.
Get ready to market the house.
Before asking professionals to give you a valuation, get your home ready for inspection. The initial inspection of the home often dictates the kind of price which will be achieved. Make sure that all repairs are done, that the house looks neat and tidy, and that space is maximized. The best way to do this is to neutralize the color of paintwork, pack away all the things which make the home look smaller and be ready to present it in a marketable manner.
Compare prices of agencies.
Invite several estate agencies to come and value the home. These are people who sell houses every day, but a surprising trend will occur. The prices they put on your home will differ, and it’s not always wise to go with the agent who gives the highest price. They may find that the house stays on the market longer and will inevitably ask you to reduce the price after a period of time. Read over the prices you are given and compare what the agents say, so that you can establish what a reasonable valuation is.
Points to remember.
People borrowing money to buy your home will have to get a valuation to determine that there is sufficient equity in your home for them to borrow money. These valuations are not the current market value, so beware. These are valuations which are performed by financial institutions to establish whether the home would realize the amount loaned if the buyer did not pay their mortgage. This is where two price ranges occur. The foreclosure value of your home is always going to be less than the current market value.
Still have doubts about the real value?
In this case, it’s worthwhile asking for a Comparative Market Analysis. This can be obtained from estate agents, and you don’t have to settle for one analysis. The figures used in a comparative market analysis or CMA are based on the following criteria:
Sales achieved in the last year.
Active and expired property listings.
Current amount of houses for sale.
When you think of it, it’s pretty obvious that things are for ever changing. The CMA tells you information on value based on current trends. For example, when the housing market is stagnant and houses are not moving, the value of the home would be less. In a market where there isn’t much available for sale, but there are many people seeking homes, this would help the price to rise. This report helps to establish the going rate for the home, though doesn’t have to be adhered to. It is merely an informed guide.
The investment in a home is a huge one for individuals. More expensive than any other kind of day to day investment, to achieve the best possible price, all of the above should be investigated before selling the home. Set the price too high, and the property remains on the books as unsold. Set it too low, and the home sells very quickly but may not realize the full potential. The price put on the home should be set a little high to allow for negotiation, since most savvy purchasers will want to feel they have struck a bargain. Once a price has been agreed upon as the value of your home, purchasers then have a feel for the viability of buying your house as a potential investment for their future.