Let’s talk value. Before you put your home up for sale, you have to set a price. And, before you can do that, you need to find out what the house is worth. Contrary to popular belief, that’s not what you paid for it. It’s also not how many upgrades you paid for. Determining worth is simply finding out what someone might possibly pay for it.
The real estate market is in constant flux. Particular areas fluctuate, as well as national regions. From national to local real estate markets, you need to know what’s going on everywhere to understand how it affects your property value. After all, several conditions can affect the sale of your home.
Understand Market Conditions
Let’s talk about the different market conditions that can affect your home’s value.
A Buyers Market: The supply of homes on the market exceeds demand. Prices are stable. They might even be dropping
A Sellers Market: The number of potential buyers exceeds the number of homes on the market. Homes are selling quickly and prices usually increase.
A Balanced Market: The number of homes on the market is roughly equal to the demand.
Major Factors Affecting Market Value
Numerous factors can affect market value. For example, this includes mortgage rates, price, and the condition of the property. It also includes the location of the property, current supply and demand, and seasonal markets.
Once you know how much your home is worth, you can set a price. Generally, this is done in conversation with a Realtor. Discussing it with a Realtor will allow them to offer their best advice on the price.
The joint goal is to present a price that attracts willing buyers, without underselling the property. Likewise, you want to set a price that encourages a timely sale.
With that, the price should never exceed market value by more than 5%. If the price is set too high, it may deter prospective buyers.
Similarly, if the price is set too low, buyers may be skeptical. Often times this creates offers at much lower than asking price.
Comparative Market Analysis
A comparative market analysis considers similar homes for sale now, those recently sold, and those that went unsold. So, basically, this is a list of all similar homes that are currently and have previously been on the market. After all, buyers will be comparing your home with these ones.
Let’s take a look at each category:
Similar Homes for Sale Now – This shows what homes you’ll be actively competing against. Buyers compare your home to these homes, often directly visiting both.
Similar Home Recently Sold – These tell what buyers are willing to pay for this kind of home, in this area, at this time. When considering the price, this is a vital category.
Expired Listings and Similar Homes Unsold for 90 Days or More – These homes tell us where listings went wrong. After all, you likely don’t want your house sitting on the market. To avoid overpricing, we often use this list.
Understand House Price & Market Values?
Need a little bit more information? Check out this blog article!
Ready to chat with a Realtor? Contact Sherri Toerper today!