One of the most difficult parts when you begin the process of selling your home is determining what price is fair for both you and the buyer. If you price too low, you may sell your home quickly but sell yourself short on potential earned money. If you price too high, you may find your home sitting on the market much longer than you anticipated. It really is a tricky number with many circumstances to consider.
Understanding market value is key to determining the price for your home. Market value, put simply, is what a buyer will pay for the home and what you, the seller, will sell the home for. This perfect number is ultimately determined by shifts and changes in supply and demand of the industry. Market value is the number that both parties are willing to agree on. It may be lower than the seller wants it to be, but it is ultimately the highest amount a buyer is willing to pay. It is the happy medium that everyone can agree on.
I bet you are wondering how this magic number is found? Market value takes into consideration what other homes have sold in your area. These prices are ballpark but there are a few resources outlined in my book, “Before You Sell Your Home” for where you can go to look at recent neighborhood sales. Another aspect is determining what else is for sale currently in your neighborhood. This can be done with a little research - even just driving around and looking for ‘For Sale’ signs!
A good key indicator of finding market value is taking into consideration how long those homes have been for sale. A house that has sat on the market for awhile, all other things considered, means the seller could have priced it too high. You want to consider homes that match the same layout as yours in size and quality. This includes how many floors, bathrooms, square footage, etc.
Many assume that what they originally paid for the home has some kind of bearing on the market value and price that they set for their home but that is not the case. It also doesn’t matter how much money you currently have invested in the home. The real estate market, like any industry, is constantly changing. Pricing from years before is irrelevant when considering a homes current worth.
There are many additional tips for pricing your home as well as an outline of special circumstances in my book, “Before You Sell Your Home”. For example, I discuss how to complete a short sale if you owe more than the value of the home. Though this isn’t an ideal situation, there is a solution and I walk you through it every step of the way.
Do you have additional questions on market value? Comment below and let’s talk real estate!