Mystery Solved! Where the Listing Price comes From...
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One of the most challenging aspects of selling your home is determining the appropriate list price. Have you seen the series of photos circulating across the internet illustrating the three different perspectives of home valuation? One photo shows an opulent mansion (that's how the Tax Assessor sees your home), another photo shows a modest, yet well kept home (that's how the appraiser sees it), and the last photo shows a run-down shanty (that's how buyers see your home). Although humorous and cynical, it does point out the difficulty of accurately assessing a given property's value.
How do I come up with a realistic market valuation of your home? The first step is to do some research. That research will include a market analysis where I complete a survey of properties that recently sold that closely approximate the size, style, condition, and location of your home. I will also compare properties that are currently for sale and those that did not sell (they expired or were withdrawn). I will take into consideration appreciation rates as well as any significant improvements you have made that would warrant a change in market value.
One of the greatest misunderstandings in real estate is the "Re-Fi" appraisal. A re-finance appraisal is an appraisal of credit worthiness as much as market value. When you looked to a lender to provide you refinancing, the lender looks first at your credit scores and payment history and then at your home. Many times the appraisal was a "drive-by" to simply verify for the lender that the house was located where you said it was and was generally in the came condition as when you purchased it. For marketing purposes, these appraisals often just don't stand up to current comparative data.
The idea behind getting an accurate assessment of your property's value is to get a cross section of datafrom several different viewpoints (eg. appreciation rates, historical sold data, current market conditions, etc.) and then look for intersection where the viewpoints overlap. This creates a price range in which a property is likely to sell. Again, there are many variables to consider when determining the final list price. Some of these variables are quite specific but difficult to pin down. For instance, what school or school district serves your neighborhood? Do you have an active Homeowners Association? And how much does it cost? Is there a swimming pool nearby? Are you close (but not too close) to transportation portals. Does your home back to open space or a busy street? Are you in an area that is developing and improving or an area that may be a bit worn down and on the decline? These are the intangibles that no "Zestimate" from Zillow.com or HouseValues.com can take into account when doing a quickie online survey of "What's My Home Worth?" These can be great points of reference to look for additional intersections of data - but are often inaccurate valuations in either direction.
In "All Real Estate is Local" the chief economist for the National Association of Realtors describes how each region, municipality, neighborhood, street - even cul-de-sac - has its own set of characteristics that contribute to its property value. If a home is over-priced it will languish in "never-showing-land". Buyers are becoming more and more savvy and can spot a "test price" from 8 states away!
Most real estate agents will offer a complimentary market analysis to home sellers. Give me a call if you would like to know the real value of your home in today's crazy market!
~ Janna
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 Ultimately, a home is worth what someone will pay for it.
Everything else is an estimation of value. A house is NOT worth: what you paid for it, or what you owe on it, or what you need to get for it, or what you have invested in it. It is worth exactly what someone will pay for it! Everything else is an estimation of value.
To determine a property's value, most people turn to either an appraisal or a comparative market analysis, commonly called a CMA. An appraisal is a certified appraiser's estimate of value of a home at a given point in time. Appraisers consider square footage, construction quality, design, floor plan, neighborhood and availability of transportation, shopping and schools. Appraisers also take lot size, topography, view and landscaping into account. Most appraisals cost about $300 to $400.
A comparative market analysis is a real estate agent's informal estimate of a home's market value, based on the sales of comparable homes in a neighborhood. A goodreal estate agent will look at same considerations that the appraiser uses. I also take into account the current competition for homes when I prepare a CMA to establish a listing price in a buyer's market. Most agents will prepare a CMA for free.
A few years ago I hired a appraiser to help me with a CMA I was preparing on a very expensive and unique property. I wanted to be understand how appraisers selected properties to use as comparables when there were no apples to apples homes to use. How did they make adjustments when forced to compare apples to oranges to determine value. It was money well spent. I discovered that using my own instincts, the value range I had initially given the home was right on the mark. Because I knew the niche well - I had recently shown or previewed most of the competing homes - my instincts were correct.
Remember that ultimately a home is worth what someone will pay for it. If you would like my expert assistance in preparing a CMA for your home, please call me. It's critical in this market that your home is priced correctly. Getting a GOOD estimation of value will empower you with the information you need to choose how to move forward with the sale of your home in these uncertain times..
~ Janna |
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FREE Comparative Market Analysis for North Idaho Sellers
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The correct selling price of a home is the highest price that the market will bear. To assist you in determining the correct asking price I provide you with a comprehensive market analysis of comparable properties sold and offered for sale in your neighborhood.
To provide a more detailed Comparative Market Analysis, I would be more than happy to also assess your property in person. |
Simply enter your criteria below, and I will provide you with a speedy response. The more information given, the more accurate the evaluation. All information you provide is secure and will be kept strictly confidential. There is no obligation. Please indicate when you are thinking of selling and if you are moving within North Idaho or relocating outside the area.
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