Knowing what to price your home is one of the most important aspects of selling. Choosing just the right listing price can mean the difference between a quick sale and a home that languishes on the market for weeks or even months. But how do you know what your home is worth? Here are some suggestions about how to find that magic number.
There are many online calculators available that will use existing public data on your home to generate a price. They run that data through different computer models to determine a value. These calculators can be a good place to start to get a ballpark estimate of what your home may be worth. But be aware that they can be off, and they may even differ wildly from one another.
Once you’ve gotten an idea of the estimated value of your home, it’s time to dig a little deeper. Start by looking at the comps — properties in your neighborhood that are for sale or have sold in the last year. Find homes that are reasonably comparable to yours. Compare using number of bedrooms and bathrooms, square footage and lot size. Also take into consideration any unique characteristics, such as an outstanding view or amenities like a guesthouse or pool. You can expect your home to be worth approximately what the comparable properties in your neighborhood are also worth.
Another way to narrow in on the market value of your home is to hire a professional appraiser. They will evaluate your home based on its size, condition, recent improvements, and unique extras. Appraisers can be hired locally and generally cost up to around $500.
You can also get an idea of your home’s value by looking at your most recent property tax bill. The bill will show what the tax assessed value of your home is. Depending on where you live, that value can represent the fair market value of your home or a percentage of that value. Find out if your area uses an assessment rate, and use that to calculate the fair market value of your home. This method can be a little tricky, but looking at the assessed value will give you an understanding of what your local government thinks your home is worth.
At the end of the day, your best course of action for pricing your home is to work with a trusted real estate agent. Agents have access to private industry databases that give a much more detailed picture of your home. They will use that detail and their knowledge of the local market to conduct a comparative market analysis. Working with a human who can better understand the subtleties of a property will give you a much more accurate price than any computer algorithm alone can.
Ultimately, determining the value of your home is equal parts art and science. By thoroughly examining the local market and working with an agent you trust, you should be able to arrive at that magic number that both you and the buyer will be happy with.