When it comes time to sell your home, you’d obviously like to get as much as you can for it. For some people, the question “What is my home worth,” seems like an unsolvable mystery. Often times, we tend to assume our home is worth much more or less than it actually is. It often comes as a surprise to homeowners that land appreciates over time, while the physical structure occupying the land can depreciate over time.
Comparable Value
When determining your home’s worth, real estate agents first consider “comps,” otherwise known as comparable properties, which are other homes in your neighborhood that have recently sold. Your agent will likely use comps to prepare a CMA (Comparative Market Analysis) for you.
The steps to prepare your personalized CMA include:
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Locate listings of homes that have sold in your immediate or nearby neighborhoods in the past six months.
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Select three properties which are a close match to your home in terms of year built, square footage, size of lot, type of roof, style, and amenities. According to Home Guides, there shouldn’t be more than a 200-foot difference between your home and the comparable properties.
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Consider whether your property is larger, newer, or has additional features from the compared properties. If so, your agent may choose to add to the price of your home. If not, they may opt to take some money off of the selling price.
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Average the selling price of the three comparable homes, adjust accordingly, and set the price for your home intelligently.
The Option of Hiring a Home Appraiser
Sometimes it may be difficult for you and your agent to come up with an accurate selling price for your house. It’s possible that there haven’t been enough comparable properties sold around you in recent months. There may also be too much information to sift through, making this part of the process very time-consuming. A professional appraiser can work with challenging situations to come up with an accurate home worth.
Setting the Selling Price
After reviewing your home’s unique features and three comparable properties, it’s time for your agent to set a selling price. It’s a good idea to set the price a little higher than you expect to get, but not so high that it discourages buyers from bidding. This leaves room for negotiation on both sides. It’s common for real estate agents to suggest that clients should offer 5% less than what they plan to ask for their home. Of course, you would be free to respond to your agent with a counter offer.
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