Determining the value of your house involves many factors and a collaborative effort between you and your real estate agent. Before making any major or minor enhancements, you and your agent should assess the condition of your property and any improvements or upgrades you’ve made. Renovations, updates, and well-maintained properties can add value, while deferred maintenance or outdated features may decrease the value.
Here is how to find out what your house may actually be worth.
Comparative Pricing: Value is a relative term. One owner’s quaint little cottage may be another’s airless old money pit. Obviously, then, you need some basis of objectivity – and you can find it by rating your house against other houses that are for sale in your neighborhood.
Your real estate agent will conduct a Comparative Market Analysis (CMA), by researching and comparing similar properties in your area that have recently sold or are currently on the market. This analysis will consider factors such as property size, location, age, condition, and features.
Neighborhood: Location, location, location. Agents will tell you the worst house in the best neighborhood is worth more than the best house in the worst neighborhood. Considerations to include in your deliberations are neighborhood schools, community services, public transportation, and the general upkeep of other nearby homes.
Curb Appeal: At the heart of it all is the emotional appeal, or “curb appeal.” After a long day at the office, the welcoming sight of home as you pull into the driveway can rejuvenate the soul.
Floor Plan: The layout of a house really directs how people will live in it. For example, a family that enjoys entertaining often may prefer an open plan, like the kind found in many contemporary houses. But for those people who prefer their privacy and desire more room for quiet, a traditional design of smaller, closed-off rooms will catch their eye. Ideally, a house can provide a balance of public and private areas.
Appealing Details: Factor in unique features: Consider any unique or desirable features your property has, such as a large lot, a great view, or additional amenities. These factors can add value to your property and make it more attractive to potential buyers.
Custom-made items such as built-ins, draperies, or special appliances that you are willing to leave behind can add value to the house. Likewise, fine architectural elements such as handcrafted wood molding, aristocratically tall ceilings, and dramatic windows (preferably revealing a breathtaking view) definitely rank high on the tally sheet. So be sure to show them to their best advantage.
Major improvements may yield attractive returns at resale time. An updated kitchen or a second bath are major buyer attractions. On the other hand, pools and spas may be perceived by prospective buyers as more trouble than they are worth.
Taxes: City and county tax structures can have a significant effect on the value of a house. A municipality with lower property taxes can generally command a higher price tag, for example.
Consider market trends: Your agent will evaluate local market conditions and trends, including supply and demand, inventory levels, and the overall health of the real estate market. This information will help to gauge whether it’s a seller’s market, a buyer’s market, or a balanced market, which can influence the pricing strategy.
Determine pricing strategy: Based on the CMA, market trends, and the factors mentioned above, you and your agent will determine a pricing strategy. This could involve setting a competitive asking price, pricing slightly higher to allow for negotiation, or pricing slightly lower to generate multiple offers and drive up the price.
Review and adjust: Once your property is on the market, your agent will monitor interest, feedback, and offers from potential buyers. If necessary, you and your agent may need to adjust the price or marketing strategy based on market activity and feedback.
Above all, pricing is more of an art than a science. Ask yourself how motivated you are to sell, whether you can wait, or even if the selling price will leave you short with the bank at settlement. Talk to your real estate agent. You may not like what you hear, or you may be ecstatic, but at least you will be armed with a realistic, and ultimately, rewarding perspective that will help to sell your house efficiently and at a fair market price.
