How to Accurately Price or Value a Home
Pricing your home or valuing a home purchase is the most important decision you will make. Priced too high, your home will sit on the market. Priced too low, you lose money. So, what determines the correct asking price? We will explore several excellent ways to obtain good information about the current value of your home relative to the marketplace.
Competitive Market Analysis: Probably the best way to obtain an accurate price for a home is to have a real estate professional complete a competitive market analysis, (CMA). For home sellers this involves having a real estate agent come to your home to examine its condition, décor, location, etc. This service can be obtained with no obligation and with minimal cost to you. The downside is that you are no longer anonymous. You will likely be called and marketed to by salespeople wanting to list your home.
If you are a home buyer, ask your agent for a comparable market analysis (comp’s) for any home you are considering. A comparable analysis provides all the details about homes that have been sold in the last six months. Use the comp sales data to see how the home you are considering compares in terms of price, ammenities, location, number of days on the market, etc. to the homes purchased by others.
The Internet and Media: Whether an agent is involved or not, we advise you do a little legwork. Find homes currently for sale in your neighborhood and surrounding area’s. Find homes by visiting http://www.infotube.net and http://www.realtor.com/; realty company websites; calling the home seller; collecting brochures from InfoTubes or InfoBoxes; attending Open Houses; looking at newspaper classifieds or Homes for Sale magazines.
While there are websites that claim to offer “Free Home Valuations”, we find that most of these services are simply lead generation tools for Mortgage Companies and Real Estate Agents. Be aware when using these services, that the information you provide will likely be sold to advertisers and used for sales calls.
Check back with us tommorow as we address valuing or pricing a home based upon its price per square foot. Buying or selling, you owe it to yourself to know how to value real estate objectively.