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Have You Considered Selling Your Home? How To Determine Estimated Value Of Your Property.
Have You Considered Selling Your Home? Have You Studied The Market?
Studying the market means to start watching for homes that have sold in your neighborhood. Not only what they sold for but how long were they on the market before they sold, were there any price reductions, if so, how many. Please understand there is a difference between a listing price, also known as an asking price, and the sold price.
Market value is not determined by the asking or the listing price, market value is determined by sold price. In a future video I will show you how to use those listing prices to competitively price your home to sell. All right, back to market value. This is where property info and pictures come in handy. You'll use the property info and pictures of the sold homes to find properties that are comparable to yours.
How to Find Comparable Property
The comparable property info you are looking for are square footage, year built, and lot size. There is other property info you can use to compare other homes to yours, I or your realtor will advise you through that using a Comparative Market Analysis when it's time to sell your home. When you find these sold homes with comparable square footage and similar year built, give or take five years on your built, you're going to look at the pictures of these properties. Homes that look less updated than yours will have sold for less, homes that have more updates than yours will have sold for more. You truly have to be honest with yourself when you're looking through these pictures you're always going to have a bias opinion about your property and believe that your home is the best in the neighborhood therefore think you can price your home higher than everyone else's.
Your Bias Opinion Can Hurt The Sale of Your Home
That bias opinion will leave your home sitting on the market with no buyers, and no offers. Now, if your home truly is the best on the block and has the most upgrades, pricing it higher is justifiable, but please know it's unrealistic to believe that you'll recoup the cost of all your upgrades during the sale of your home. Now comes the fun part. How do you use all this information to determine value?
Let's Determine Value
All you need is about 3 to 5 comparable homes. That's enough to come up with an estimated value of your property. If the sold price of the homes that you're using to compare have one that is priced extremely higher or extremely lower than the rest, please remove those from the list. This is not the norm. An extremely lower priced property could have been distressed it could have been a foreclosure. An extremely higher priced property could have upgrades that you didn't see in the picture or where not included in the property details.
Time For A Little Math
So, let's do the math. Take one of your comparable properties and you're going to divide the sold price by square footage. For example, a home sold for $200,000. You are going to divide $200,000 by 2,000 square feet. That means that this home sold for $100 per square foot. Do this for each of your comparable properties. For example, in my example 1st home sold for $90 per square foot, 2nd home sold for $98 per square foot, 3rd third home sold for $101 per square foot, 4th for $112 a square foot, and 5th for $118 a square foot. You're going to add these figures and divide them by the number of comparable properties. If you have 3 comparable properties, you're going to add the 3 prices per square foot and divide by 3. I for example have 5 comparable properties, the sum of those equals $519 I'm going to divide that by 5 because I have 5 properties. Therefore, estimated value of my property is $104 per square foot. Now, you can use the $104 and multiply it by the square footage of your property. Let’s say the square footage of your home is 2,000 square feet, you will get an estimated value of $208,000.
The Market Fluctuates
Please know that properties sell every day and this number will always fluctuate. Not by much but it does fluctuate, weekly, monthly, quarterly. How do you use the estimated value of your property to competitively price your home when it's time to sell? Watch for the next video titled, Time to sell my home, how do I price it?
My goal are to walk you through the home buying or home selling process Step by Step. Ensuring that you have a clear understanding of the process by answering all of you questions and addressing all ....
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