With all the press that Zillow and Trulia have gotten this week I think it is important to visit how to value a home for homeowner’s interested in selling.
Zillow has many tools on its website. However, Zillow is unable to distinguish upgrades or improvements and is not always accurate on their value.
Realtors, on the other hand, will do a complete analysis of the area, have a good knowledge of condition of homes that have recently sold and are able to accurately give you a value with a bit of homework on their part.
Appraisals are primarily used to protect the lender’s interest in the property and are required for a buyer who is purchasing a home with a loan. Just like lenders are hesitant to issue a mortgage to credit-risky borrowers, they don’t like to underwrite properties for more than they’re worth. Appraisals also are used when other factors have made it difficult to assess your property’s value, such as a lack of real estate activity in your area.
Realtors stress the importance of understanding that an appraisal is just the opinion of a trained professional: Five different appraisers could attach five different price tags to your home. Appraisals are based on past sales data, the location of the home, the size of the lot and the condition of the home. If the buyer’s mortgage is insured through the FHA, the appraiser must disclose potential problems relating to the physical condition of the home; there are no similar stipulations for non-FHA mortgages.
To determine an accurate measure of what your home is worth, realtors can supply a comparative market analysis, which provides information on recent selling prices of similar properties in the same market. With a CMA, you can monitor the closing price of specific house types in certain areas (for example, a condominium in a metropolitan area). Again, consult your realtor if you’re interested in learning more about a CMA.
In establishing the listing price for your home, you need to strike a delicate balance between a figure that will scare off potential buyers and a low price that doesn’t represent your home’s worth. Buyers will compare your home’s price with other properties on the market. Therefore, you should use a CMA to assess what consumers are paying for similar homes. Your realtor can assist you in obtaining and analyzing that information.
The National Association of Realtors suggests some additional steps to help you set your list price. After analyzing sales data, conduct some market research on your own. Attend an open house or two and make an impartial assessment of how those homes compare to yours in terms of size, location, amenities and condition.
Your realtor can be a vital resource in analyzing all the pertinent information with you to develop a list price. Trust your realtor’s judgment, as he or she offers experience in this arena. However, the final decision on the listing price for your home is your choice to make.
Eileen Schamber is the president of the Lodi Association of Realtors and can be reached at firstname.lastname@example.org.