How Much is my House Worth
There are 5 primary factors that affect the Value of your today’s market— location, price, competition, timing and condition. So to know How much is my house worth you need to analyze these factors.
Location, location, location. This is the most important factor in determining the value of your home. Most buyers purchase based on where they most desire to live. There is nothing you can do to ‘fix’ your location
Pricing your home properly from the start is important in determining how long it will take to sell your home. Over pricing will cause your house to sit on the market. I will discuss pricing in another article.
What are other homes in the area selling for? Prospective buyers are comparing your home to other properties. The value of your home is based on what similar homes have sold for nearby and what homes on the market today are asking in the area.
Property values are affected by the current real estate market. This can vary from month to month. In Mesa July and August slow down.
The condition of the property affects the price and speed of sale. Buyers make their decisions based on emotion, the first impressing is very important… You must maximize the physical appearance of your home in order to maximize the buyers perception of value.
Time to Set the Price
So to evaluate how much your house is worth….
Abandon your personal point of view (I know this is tough). How much will a ready, willing and able buyer be willing to pay for your home? Buyers don’t care how much you paid for the home, or how much the house next door sold for last year or how many memorable moments you and your family shared in the home, or how much cash you need for the down payment on your next home or how much time and money you’ve invested in your home’s hardwood floors, fresh paint, lush landscaping or other improvements. The current market establishes the value of a home.
A “comparative market analysis” (CMA), shows the prices of comparable recently sold homes, on-the-market homes and homes that were on the market, but weren’t sold. The homes used in the CMA should be as comparable as possible.
What makes a good comparable home?
The closer the better. Ideally the houses used will be in your neighborhood. Appraisers will use houses a bit further out (if necessary) if there are not 3 comparable homes that sold in the neighborhood they will use a 1 mile radius, if there still are not 3 homes they will go to a 1.5 mile radius. Do not plan to look at homes further away simply to increase the asking price. If they can find the homes in the neighborhood they will not look further out.
One story homes compare to one story homes. Two story homes to two story homes. Tract home to tract home. Custom home to custom home. Don’t pick a home in the upscale neighborhood accross the way and think that will affect your value.
You want to compare home with other homes 10% plus or minus in size. So a 2000 sf home would be compared to homes between 1800 to 2200 sf. A 3000 sf home is a different animal.
Date of Sale
The appraiser will look at homes that closed within 90 days. So will a good Realtor. A comparable sale from 2 years ago means nothing.
Is the condition similar? Is everything clean and in good shape? Are the finishes about the same– granite counter tops or Formica, tile floor or carpet? What is the condition of the carpet and paint? Is there a pool? Is there landscaping or dirt? The MLS gives you photos that can show what the competition looks like. Be realistic.