Housing Market

Sorry to say this but what you think your house is worth has very little to do with what it is actually worth. You might forgive homeowners for believing that their house is worth way more than it is after all the mortgage payments they have made and all the money they have thrown into the house. The movie Money Pit is a bit of an exaggeration but homes cost money to maintain and the older they get the more attention they need. It is often the case that just as the house is starting to need more work is around the time you decide to sell it.

What you paid for the home also has no bearing on what the home is currently worth. Many people who bought homes just before the real estate crash in 2007 are still underwater in their homes despite rising home prices and a strong regional market. This shows just how high the home prices got in certain parts of the country and while some areas of the country have rebounded even exceeding that time not all have. What happens in New York and California is not what happens in real estate in other parts of the U.S.

The housing market where you are located is what determines what you can sell your house for. What similar homes  have sold for recently is how you get a realistic picture of what your house will likely sell for. Now there are a lot of factors that have to be taken into consideration to come up with a sale price and you need to compare apples to apples to get the right estimate. If your home is in a subdivision then it’s likely the homes around yours are similar in size, age and type of construction. Then you have to look at the condition of those homes compared to yours.

Pricing Your Home With A CMA and Appraisals

A local real estate agent will create a comparative market analysis for you a CMA which will show you the most recent (3 months) sales of homes similar to yours. They will adjust the price higher based on features your home may have the others do not and lower if the comp homes have more features. The interesting thing about using CMA’s and appraisals when pricing your home is the fact that we are using historical data to determine a future sale price, so it’s important to have a sense of where the market is trending. To do this you look at days on market of the homes for sale, have homes started to sit on the market instead of selling quickly. Are other sellers reducing their prices which could mean the market is slowing or that the homes were overpriced to begin with and how is the area you live in doing in general. Are families moving to the area, are business relocating or opening nearby. What sort of amenities and activities are available to potential home buyers.

 

It’s not enough to just look at the sale price of recently sold homes but rather as in your home, the condition of the home, if any upgrades were done and if the sellers paid closing costs or other financial concessions for the buyers. Some homeowners choose to pay for an appraiser to come out and do an appraisal on their home. This gives you a more precise idea of what your home can sell for. It is the appraiser for the buyer’s mortgage company that will determine what amount they are willing to loan on the property. If there are no comparable properties nearby or if the home is unique it may be wise to have an appraisal done.

 

Condition Of The Home

The condition of your home plays a huge role in what your house will sell for. If your home needs updating unless you’re in a very hot real estate market it’s going to take longer to sell. In fact it may not sell at all if there are plenty of new and newer homes available even if it’s priced lower and in a good location. Buyers don’t want the expense and trouble of doing upgrades to a home they just bought, most are looking for move in ready homes.The main areas to consider are paint and carpet both of which get a lot of use and abuse over time and when replaced have an immediate effect on the salability of the house. Lighting and plumbing fixtures get a lot of scrutiny also and if your house was built in the Eighties you know what I’m talking about. There are some things pricing can’t overcome and these four are often the problem. The major items in a home such as the heating and air conditioning, water heater, roof need to be in a good state of repair. If the roof is at the end of it’s life you may have to replace it, if the AC unit is a dinosaur buyers aren’t going to be willing to risk having it quit for good just after they buy the house and all the warranties in the world won’t change their minds.

Motivation

How motivated are you to sell your home? It’s a lot of work getting a house ready to sell especially if you’ve lived there for years and have accumulated some stuff. When you don’t have a new house or neighborhood where you’d like to move to it can be hard to get motivated to sell the one you’ve got. Selling one home and buying another for the majority of people is a bit of a juggling act and can put a lot of stress on sellers that in itself might dissuade some folks. Then there is the expense of doing upgrades and repairs. Money can be a motivating factor or rather the equity you have in your home especially if it’s sizable. Have your real estate agent prepare a net sheet for you using three potential sale prices and subtract out all your expenses and closing costs, fees, etc then you are left with an estimate of what you will walk away with after pricing your home correctly. Motivation to move often does not have anything to do with getting a new home but rather for other reasons such as relocating to be next to family or getting away from a cold winter climate to somewhere warmer.

Motivation

How motivated are you to sell your home? It’s a lot of work getting a house ready to sell especially if you’ve lived there for years and have accumulated some stuff. When you don’t have a new house or neighborhood where you’d like to move to it can be hard to get motivated to sell the one you’ve got. Selling one home and buying another for the majority of people is a bit of a juggling act and can put a lot of stress on sellers that in itself might dissuade some folks. Then there is the expense of doing upgrades and repairs. Money can be a motivating factor or rather the equity you have in your home especially if it’s sizable. Have your real estate agent prepare a net sheet for you using three potential sale prices and subtract out all your expenses and closing costs, fees, etc then you are left with an estimate of what you will walk away with after pricing your home correctly. Motivation to move often does not have anything to do with getting a new home but rather for other reasons such as relocating to be next to family or getting away from a cold winter climate to somewhere warmer.

Motivation

How motivated are you to sell your home? It’s a lot of work getting a house ready to sell especially if you’ve lived there for years and have accumulated some stuff. When you don’t have a new house or neighborhood where you’d like to move to it can be hard to get motivated to sell the one you’ve got. Selling one home and buying another for the majority of people is a bit of a juggling act and can put a lot of stress on sellers that in itself might dissuade some folks. Then there is the expense of doing upgrades and repairs. Money can be a motivating factor or rather the equity you have in your home especially if it’s sizable. Have your real estate agent prepare a net sheet for you using three potential sale prices and subtract out all your expenses and closing costs, fees, etc then you are left with an estimate of what you will walk away with after pricing your home correctly. Motivation to move often does not have anything to do with getting a new home but rather for other reasons such as relocating to be next to family or getting away from a cold winter climate to somewhere warmer.

 

Competition

How many homes are for sale in your neighborhood is something that factors into how you go about pricing your home. The next question to ask is how long have they been on the market to determine whether you are in a seller’s market or a buyers market. If there are a lot of homes for sale how are they priced and what sort of condition are they in? In some neighborhoods especially larger developments there may be new construction homes for sale which adds a little twist to pricing your home. Even if your home is older the new construction homes while they may be more expensive are still competition.