So, you’ve found your dream home and you have decided to put your current house on the market and make the leap. But first, you need to sell your present property and use part of the proceeds for the new home’s down payment – and in order to do so, you’ll need to determine the value of your current home.
In many cases, if you’ve hired a real estate agent to transact the sale of your home, there is a specific strategy for coming up with your home’s value. The most accurate way to do this is by using actual comparable sales, or “comps.”
These are the recent sales figures of similar houses that are in the same or a similar neighborhood nearby. This method of determining the value of your home is actually referred to as the market comparison strategy. This is also the technique that is used by licensed, professional real estate appraisers when they appraise a single family home.
Here’s how the method works:
If three identical homes in the same neighborhood have all sold within the past six months – with the sales prices of $150,000, $154,000, and $149,000, then a fourth similar house will likely also sell within this very same price range. Therefore, the market value of this fourth home would fall somewhere between $149,000 and $154,000.
It is important to note, however, that the determination of market value isn’t an exact science. This is because each and every home can be different. For example, your home may have added on an additional 500 feet of living space, and / or it may require some major repairs that the other three homes didn’t.
The good news is that there is a way to compensate for this. In most areas, a “property profile” is available, either from a title company or through the MLS (Multiple Listing Service). This profile includes details about a specific property that can be used in obtaining a more accurate value. For example, the profile will provide details such as the home’s square footage, and the number of rooms. Once your real estate agent has this information, additional calculations can be performed that can get the value of your home down to a more accurate figure.
Having your home priced properly right from the start will help you to attract more potential buyers – and in turn, a faster sale. For additional information on how to price your home for sale more accurately, or if you would like an estimate of what your current home is worth, give us a call.
