What is your home worth?
All homes have a price, and sometimes more than one. There's the
price owners would like to get, the value buyers would like to offer and a point
of agreement which can result in a sale.
In considering home values, several factors are important:
The value of your home relates to local sale prices. The same home, located
elsewhere, would likely have a different value.
Sale prices are a product of supply and demand. If you live in a community
with an expanding job base, a growing population and a limited housing
supply, it's likely that prices will rise. Alternatively, it's important to
be realistic. If the local community is losing jobs and people are moving
out, then you'll likely have a buyer's market.
Owner needs can impact sale values. If owner Smith "must" sell quickly, he
will have less leverage in the marketplace. Buyers may think that Smith is
willing to trade a quick closing for a lower price -- and they may be right.
If Smith has no incentive to sell quickly, he may have more marketplace
Sale prices are not based on what owners "need." When an owner says, "I must
sell for $300,000 because I need $100,000 in cash to buy my next home,"
buyers will quickly ask if $300,000 is a reasonable price for the property.
If similar homes in the same community are selling for $250,000, the seller
will not be successful.
Sale prices are NOT the whole deal. Which would you rather have: A sale
price of $200,000, or a sale price of $205,000 but where you agree to make a
"seller contribution" of $5,000 to offset the buyer's closing costs, pay a
$2,000 allowance for roof repairs, fund two mortgage points, re-paint the
entire house and leave the washer and dryer?
How much is too much?
Because all transactions are unique there is flexibility in the marketplace. The
amount of flexibility depends on local conditions.
For example, suppose you're selling a townhouse. Suppose also
that there have been five recent sales of the model you own and that sale values
have ranged between $200,000 and $210,000. You now have an idea of how your home
might be priced. In a strong market perhaps you can ask for $210,000 or a little
more. If the market has slowed, $210,000 may be a reasonable asking price, but
perhaps more than the final sale price.
Here's another scenario. Imagine that you live in a community of
Victorian-style homes, most of which were built in the 1920s. All the homes are
different in terms of size, condition, modernization, style and features. In
such a neighborhood, an average sale price is just a statistic without much
practical meaning. On a single block one home may sell for $400,000 while
another is priced at more than $1 million. The average price may be outrageously
high for one home and staggeringly low for another.
Who can help?
Experienced REALTORS are
active in the local marketplace and can provide assistance with pricing,
marketing, negotiation and closing.
Because experienced REALTORS have handled many transactions,
they're familiar with the terms and conditions that went into individual sales,
not just published sale prices which may not reflect various premiums, discounts
Provided by the National Association of
REALTORS and Realtor.com