Email Starting with what you paid and adding on for all of the improvements, like the new roof, the updated kitchen, plus then adding for commissions to the agents, along with an amount for some return on your investment and lastly including some room to negotiate is not likely to generate a realistic price. Even if you then try to validate your number by looking at what else is currently for sale and hope your place holds it’s own, the odds unfortunately are against you in being able to based on the true value of your home.
And a home that’s initially overpriced statistically tends to ultimately sell for less while also taking a longer than average number of days to sell.
Mitch is proud of his accomplishments and track record but only you can decide what makes a REALTOR #1 or learn What’s Unique about Mitch as A Listing Agent
What's The Value Of Your House, Townhouse or Condominium?
Mitch provides an analytical and justifiable approach that reflects that the price of your home is based on 3 elements much like a 3 legged stool.
1/3 Is About The Property Itself: The Location, Condition, Updates, Bed & Bath Count, Size, Age & All Features
1/3 Is About Similar Places For Sale A Buyer Could Also Buy, At The Same Time, In The Same & Similar Areas
1/3 Is About What Similar Properties, In The Same Or Similar Areas, Have Sold for In The Last 6-12 Months
A ten-dollar bill is worth $10 regardless of if it’s crisp and brand new, or if it’s twenty years old, dirty and torn. Neither its condition, the condition of other dollars bills, nor its location will change its value! If the value of real estate was also this precise and exact, just like the value of a dollar bill, then there would frankly be no need for real estate agents! However, accurately evaluating the value of a house, townhouse, or condominium is a complex calculation that leverages years of experience and expertise like Mitch has, as one of the Top REALTOR's in the Greater Indy area!
Get One To Two Comparative Market Analyses "CMAs"
A CMA should also increase or decrease the value based on the current market conditions including, interest rates, and the supply and demand at that moment in time. Most real estate agents will perform a CMA before listing a home for sale and great Buyer’s Agents will also complete a CMA when working for a buyer who is considering submitting an offer on a property.
If you are not working with a prior agent, that has a proven track record that you have experienced first-hand, then you should start with at least two real estate agents who visit your home and give you their opinion of its likely selling price.
Don't accept or rely upon an Agent's "gut feeling" about the proper list or likely sales price. Ask for a ‘comparative market analysis’ (CMA), which shows the prices of comparable recently sold homes, as well as active comparable listings that potential buyers will also be considering when they look at your place along with comparable homes that were on the market, but did not sell because we can learn both what the market will not support pricing wise and some, if not many of these properties may also become active competitors when your place is for sale.
The on-the-market homes are the “competition” for your home. Ask the agents why each home was included in the CMA and whether any other comparable homes were eliminated from the CMA. Just realize that price recommendations are not an exact science. If this process was that black and white then Real Estate Agent's would not exist!
If the suggested list and/or sales price in the first two CMA's vary widely than you should have a 3rd CMA completed by another agent. But keep in mind that some agents will tell you to underprice your home in hope of sparking a bidding war. Others will suggest a flatteringly high price to ‘buy’ your listing only to demand a price reduction a few weeks later. The best agent can easily justify the sales price to you using timely and relevant market data. If any agent can’t defend their price, high or low, to you then please don’t expect those same agents to be able to justify your list or sales price to a buyer’s agent or buyer who wants to buy your home for less!
Have Mitch Complete a Market Analysis of your home or condo.
Do your own market research
Go to open houses in your neighborhood and try to make an impartial assessment of how those homes compare to yours in terms of location, size, amenities and condition.
Assuming all the asking prices were the same, would you buy your home or someone else’s? Great agents will not only suggest that you do this but will offer to take you to see all of the competition, including when new places continue to come on the market after yours is listed. Being familiar with the competition will also help you digest the feedback from showings from buyers who are comparing your place to the others they are also viewing.
Have Mitch Complete a Market Analysis of your home or condo.
Looking At And Using A Price Per Square Foot Valuation
The average price per square foot for homes in your development or neighborhood should not be the basis for a list or sales price! This calculation instead should ONLY help validate the CMA’s completed by agents in Step 2 above. Dollar's per square feet don't reflect the bedroom/bath counts. Likewise this calculation does not consider the number of garage spaces, if the basement is finished, updates and improvements, nor lot size or location and numerous other factors.
A price per square foot should ONLY be used as a one of many adjustments that are part of a CMA, to adjust for any difference in the size between your property and the relevant comparable sale.
Keep in mind that like the a CMA even the price per square foot is not an exact science and various methodologies can be used to calculate square footage. For example locally when we calculate price per square feet, we do not include basement square feet unless it’s a fully finished walkout basement. Similarly I don’t factor in a finished 3rd story or finished attics using the same value per square foot as I use on the first and second floors.
Have Mitch Complete a Market Analysis of your home or condo.
Consider Market Conditions
Are home prices in your area trending upwards or downwards? Are homes selling quickly or languishing? Will your home be on the market in the spring home-buying season or the dead of winter? Are interest rates attractive? Is the economy hot or cold? Is the local job market strong or are employees fearful of staff reductions?
Will you be selling in a buyer’s market or a seller’s market? You can determine the market type based on many of these bench mark along with also asking agents to share with you the "Market Absorption Rate." This indicator uses the number similar homes that are available when you list, contrasted with recent demand for homes of the same type and price. This indicator lets you determine how many months of supply exist for homes like yours. The greater the number of months of supply the more it's a Buyer's market for buyer’s looking to purchase a place like yours and the greater the months of supply means it will likely take a longer amount of time to sell your place.
Have Mitch Complete a Market Analysis of your home or condo.
Consider Incentives
Incentives help make your place stand out from the competition. For example if you can be out quickly, then make that known! Although you have to be careful that what you are offering as a benefit is not turned in to a perceived ‘need to sell’ by buyers and their agents.
While any buyer can ask for seller’s assistance many buyers don’t know that. So, if you have a home that appeals to first time home buyers then sharing in the listing that your list price includes $2,000-$3,000 of seller’s assistance towards a buyer's closing costs may increase the attention you get from these buyers.
However, buyer incentives won’t change what a home is worth or what it appraises for. So, if a home is only worth $250,000 then increasing the sales price by adding another $3,000 of incentives, meaning that the property must appraise for $253,000 could mean the difference in sale happening or not.
Keep in mind that when you market your home you are marketing to buyers and ALSO to the buyer’s agents. Making sure that the buyer’s agent commission is equal to other similar listings could mean the difference between you place being the bride vs. the bridesmaid. Think about if everything else is equal between two properties, and the buyer asks their agent about which home they think is a better buy/investment/value, and your commission is less than what the other seller is paying, then don't give that Agent a reason to encourage the other property.
In fact one strategy in a Buyer's market, or when trying to sell a listing that's not popular for many reasons, is to gain more Agent attention by paying a higher commission to the buyer’s agent or by offering a ‘commission bonus’ when the property is under contract and/or closed by a certain date.
The bottom line is the more creative and flexible you can be in meeting the buyer’s needs, the more success you’ll have in pricing your home to sell in the time frame that you desire..
Have Mitch Complete a Market Analysis of your home or condo.
Comparative Market Analysis (CMA)
This is an indication of the property’s value based on a detailed and adjusted analysis of the 4-6 most relevant and similar properties that have recently sold in your development and/or nearby.
A CMA should also increase or decrease the value based on the current market conditions including, interest rates, and the supply and demand at that moment in time. Most real estate agents will perform a CMA before listing a home for sale and great Buyer’s Agents will also complete a CMA when working for a buyer who is considering submitting an offer on a property.
An Appraisal
State-licensed appraisers will walk through a property and write an official appraisal report. While appraisals offer a little protection for buyers regarding the value of a property, the customer for the appraiser is the mortgage lender not the buyers. Banks typically require appraisals when refinancing your home, or getting a mortgage for a new home, to minimize the lender’s risk by making sure the bank is loaning no more than what the property could be resold for if the buyer was unable to repay their mortgage loan.
Instant Online Value Estimators
These are easy, convenient, and, best of all, free. There are many real estate and lending websites offering estimators out there. You can use this if you want a general estimate of your home may be worth. While these can help you decide if it’s worth considering selling or refinancing, these sites tend to dramatically undervalue or overvalue property values. So, using these when selling or purchasing a new place could create unrealistically high or unreasonably low expectations that could cost you thousands of dollars as both a seller or a buyer!
Price Per Square Foot Calculations
Price per square foot calculations are often used by sellers, buyers and unfortunately even by some real estate agents to determine the value of a property in comparison to other recent sales. This approach divides the sale or list price by the above ground square feet to arrive at a price per square foot.
If you are comparing to identical floor plans, with identical finishes and features, built at the same time, by the same builder on lots next to each other and both places have continued to have identical updates, then this approach might yield a meaningful value. However, this is rarely the case since price per square foot calculations do not reflect the many differences in properties like, bed and bathroom configurations, land value and location, garage spaces, finishes, updates and improvements, the year the place was built or any of the hundreds of differences between homes.