The Price is Right

One of the most difficult things to do as a homeowner is to determine the value of a home. As a homeowner, we have a vested interest in the house thus have an emotional interest in the value. We may have watched our children grow up in the house and have put a lot of love, sweat and tears in the house thus we're attached to it. All this emotional connection, unfortunately, tends to hinder our ability to look at our house realistically and with fresh eyes. The things that we've overlooked in our homes over the years and feel are no big deal will not be overlooked by a buyer and will be a big deal to them. In addition having up-to-date information about the market is essential to getting a house priced right to sell and though it's getting easier to find, it's still something that takes practice. Also, the value of a house is often different from what a buyer is willing to pay for a house. One would think they are the same, but if they were there would be no negotiations necessary when buying a home. All we would have to do is have the home appraised and say this is the price.

These are some of the reasons that a real estate professional is a good choice when determining your home value whether you sell it by owner or with their assistance. A real estate agent should have access to all the homes in an area that have recently sold and all the data that surrounds that. Many homeowners think that just because a house "down the street" sold for a certain amount that their home should sell for "at least that amount" but probably more. But without knowing all the details in the sale of that home can really distort the true value of that sale. Some simple things like how long it was on the market, what kind of financing, what was the seller's motivation, and the buyer's history can all play a vital role in determining the selling price of that home. Many homeowners rely on how many square feet their home has in comparison to others but square footage is only one small part of determining the value of a home so you can't only rely on that.

So, why is this so important? A home that is priced wrong will cost a homeowner big money. It's obvious that if it's priced to low that the homeowner will lose money, but if the house is priced to high even more money can be lost in the long run. If a house is priced too high it will tend to stay on the market longer. The longer it's on the market the more expenses that a homeowner pays. (utilities, taxes, payments, maintenance etc.) Also, the longer it's on the market the more people begin to wonder what's wrong with the house that no one has bought it yet. Thus it gets stigmatized as "something wrong" and it tends to stay on the market longer. In my previous post I mentioned that statistics tell us that the person who most likely will buy your home is a person who sees it in the first couple of weeks after listed. If it's priced too high, they walk and find something else. What does all this do to a homeowner? It forces them to hold the home longer, makes them drop the price later and typically makes them drop the price lower than they would have had they just priced it right in the first place.

So, if you're considering selling your home, take the time and ask a professional for their opinion of the value of your home and what they think it can sell for. If it sounds suspicious get another opinion. If however, everyone is telling you your home is worth less than you think it is, take note it may be.