One of the common mistakes people make when selling a home is valuing it too high. It’s hard to be objective when you’re thinking about a place you’ve probably loved and enjoyed for years. There are memories in those walls, and you’re not just going to give that away.
But if you set the resale value too high, you may have trouble selling it. And the longer your house stays on the market the more likely that potential buyers will wonder, “So what’s wrong with it?”
Here are some ways you can determine and understand the actual value of your house so that you can set a realistic asking price – with a little wiggle room for negotiation of course.
1. Consider The Location
You’ve heard the classic line “location, location, location.” Well, it’s been repeated to the point of clich for a reason, and that’s because home buyers value the community they’re buying into as much as they value the house itself.
When it comes to choosing a home and a neighborhood, there are some common factors that come into play. For example, people will look at accessibility to resources like shopping, public transit, parks and more. Families with school-age children will look at the quality of the school system and the makeup of the surrounding neighborhood – for example, are other kids playing outdoors or does it seem like a community where everyone keeps to themselves?
Other considerations like whether your house has a view or is backed up against a highway will also have an effect on a buyer’s perception of location. Near a Starbucks? That’s bonus points for you. Got a neighbor who is a rabid Jets fan and has a 12-foot tall football erected on his front lawn? Not so great for you. The more community factors in your favor, the higher your home’s value against comparable homes in less desirable locations.
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2. Count The Square Footage
While this isn’t a hard and fast rule, larger homes tend to be valued higher than their smaller counterparts. Do keep in mind that location plays a big role here. For example, a tiny apartment in a city may be a much higher cost per square foot compared to a luxury home in the suburbs.
There is no shortage of online calculators to help you determine the value of your home based on square footage. Just be mindful of the other factors that come into play, like location, upgrades, and whether it’s move-in ready. Also be aware of how the square footage is calculated and whether it includes detached buildings, garages or other non-living spaces.
Once you understand how the square footage will affect the value of your home, you can price it more effectively.
3. Go To Other Open Houses
A great way to get a handle on what your house is worth is by understanding what other people’s houses are worth. Attend several open houses in your neighborhood so you can get a feel for how your home compares.
Take into consideration the square footage, any upgrades like a new kitchen or master bathroom, and whether there are any additional perks (or detractors) like the view and the exact location.
Keep in mind that the listing price isn’t always the best reflection of the home’s value. Remember how hard it is to be objective about your own house? Well, your neighbors may have the same problem, so talk to the attending real estate agents and do a little reconnaissance to get as much information as you can. Seeing what other homes are selling for can arm you with information when it comes to pricing your own home.
4. Get An Appraisal
It’s not free, but it can be well worth the money to get a good approximation of what your home is really worth. An appraiser will use information obtained by doing a physical home inspection plus actual market data to provide you with a realistic value.
The report you receive will tell you exactly what criteria went into determining the appraisal along with a full description of your home that you can use when it comes to listing time.
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5. Call A Real Estate Agent
Even if you’re not quite ready to put your home on the market, it’s a valuable exercise so you can set realistic expectations as you plan the next phase of your life. Most agents will do a free comparative market analysis in anticipation of gaining your business when you are ready to sell.
The analysis will show the prices of comparable houses sold, as well as those still on the market. An agent will be able to give you a pretty good approximation of what your home will sell for based on the location, condition, and size of your home. And a good agent will bring experience with the local real estate market to bear.
Remember, it’s not so much what you think your home is worth as much as what someone is willing to pay for it based on a number of factors, some of which are outside of your control. From its size to its view to the neighbors and surrounding landscape – not to mention the housing market in general – a lot can affect your listing price and ultimately your sale price.
It’s a good idea to come to a conclusion about value based on several factors and several sources. The more information you have, the better prepared you’ll be to list your home at a price that will get results – that means the shortest path to the optimal financial outcome for you.
If you’re ready to sell your home and you want professional guidance to take you every step of the way through the process, get in touch with us for a free consultation. We can help you navigate the legal complexities and will look out for your best interests so you can enjoy a hassle-free experience.