"What is my home worth?"
It's a question I've probably been asked at least a thousand times during my real estate career.
What most homeowners are unaware of, is that the question they
are asking is much more complicated than they think. Developing the appropriate listing price for a property is a very involved process.
Who am I competing against?
One of the fundamental things all Realtors will do is look at comparable homes in your area that are currently For Sale. These properties are your direct competition in the market. Your Realtor will also look at houses that have currently Sold. This information provides validation that buyers are willing to pay a certain price for homes similar to yours. However, the pricing of the property is related to more than just looking at the comparable listings. We have to consider what's currently happening in "The Market".
Home sellers often have tunnel vision and are only considering their own property and their personal situation. They have to recognize that their transaction is one small part of a very large market. And that the market directly impacts and affects them…wether they know it or not.
Trying to predict the future
As the famous saying goes, "Timing in the market is everything." However, most of us can't determine when we move from one house to another based on the best real estate market conditions. So we have to make pricing and marketing adjustments to respond to the market conditions we are buying or selling in.
In an up trending market or "sellers" market, you are very likely to utilize the market conditions to your advantage and may likely achieve a sale price above the appraised value, or above the vendors expected selling price. Houses usually sell very quickly and multiple offers are common.
However, if you are also purchasing a home your gains from the hot market will likely be offset as you will also be subject to higher home prices, more competition for listings.
Market Conditions play a huge factor
In a down trending or "Sellers" market, Properties often sell for below appraised value and vendors are sometimes disappointed by getting less money for the house that they originally expected to receive. Or, worse case they simply fail to sell and the listing expires.
In these market conditions, listings take longer to sell and multiple offers are rare. The importance of proper pricing as well as professional marketing can't be stressed enough in this type of market.
On an up note, any perceived losses that may occur on the sale of your property will probably be offset by a reduced purchase price if you are going to buy another property. Just as you had to adjust your sale to the downward trending market, so have all vendors. So what you give up on the sale of your current home, you should be able offset with the discount on the purchase of another property.
So, as you can see, the real question isn't "What is my house worth?"
The real question is:
"How do I price my home to successfully sell it under these market conditions?"
For a far more detailed answer to this very important question, or to discuss any other real estate or mortgage related issue feel free to contact us at NormanLane (click the "Talk to Us" tab!) It would be our pleasure to provide a customized report for your home buying and selling needs.