Price your house to sell!

The most important thing in selling your home, is price!

Today most buyers start their search for a home on Zillow, to find a home in their area, price range, size and with the amenities they would like to have.

Zillow also lists the home’s value according to their Zestimate.

So the first place to start to get an idea of what your home is worth is Zillow’s Zestimate.  However, this is not always accurate and in most cases the Zestimate is higher than the actual market value.

The best way to establish value would be an appraisal.  However, an appraisal will cost anywhere from $500-$750.

The appraiser determines value by using the comparative market analysis (CMA) method.  This method compares homes that have sold within the last 6 months, homes that are currently active for sale on the market, homes that are pending sale in escrow, within a 1 mile radius of your home, that are similar in size, age, &  design.

However, if you do not want to spend the money for an appraisal, find an experienced realtor in your area and they can provide a CMA for free.

The sold comparables on the CMA carry the most weight when determining value.

However, if the market is a “seller’s market” meaning the value of homes are increasing due low inventory & buyers demand. The current value will be higher than some of the older sold comps that sold 6 months ago.  In that case you pay attention to what is currently for sale on the market & what is currently pending for sale in escrow.  Those prices are more accurate than the sold comps & reflect more of the current market conditions.

On the other hand if it is a “buyer’s market” meaning the value of homes are decreasing due plenty of inventory & lack of buyer demand because prices are high.  The current value will be lower, than some of the older sold comps, that sold 6 months ago when the market was more active.

 

The best way to find the value of your home is to look at the average price per square foot on the CMA of the sold comps, active comps & comps pending sale in escrow and price your house accordingly.  You do not want your house to be the highest price for sale house of all the competition. But if you can say, based upon the CMA, my house is priced at the average cost per square foot. 

You will know very soon if your house is over-priced, if agents are not showing your house to prospective buyers within the first 10 days on the market.  You will need to make a price adjustment according to current market conditions.

Two things to keep in mind:

  1. The best indicator of value, “is what a willing buyer & willing seller agree upon, that are not under duress”.
  2. No matter what price you sell your house for, the house will have to appraise at that price or better. Buyers do not want to buy houses that do not appraise at the price they are paying for the house & lenders do not want to make loans on homes that do not appraise at the agreed upon purchase price.