Determining Your Home's Value
A Comparative Market Analysis (CMA) is vital in determining the value of residential property. The primary aspects in identifying the value are the location and characteristics of the property. To determine value accurately, we need to look at similar properties in your area. This analysis examines the sales price from recently sold comparable properties and the quantity and quality of comparable properties currently on the market. The desired outcome is to arrive at a price that will procure a willing and able buyer in a reasonable amount of time.
We have years of expertise in valuing property. We will provide a comparable market analysis of your home to determine the best list price in order to SELL FAST FOR TOP DOLLAR!
We can determine an asking price that will accomplish your goals, once the value of your home has been decided. If your motivation to sell is high, your asking price should be close to the value. Potential buyers may avoid making offers if the price exceeds the value by more than five percent.
Pricing is the most important decision in the home selling process. Desirable properties that are priced correctly from the start will receive multiple offers and go into escrow more quickly.
Why is pricing your home correctly from the start so important?
- Realistic pricing will obtain the highest price in a reasonable amount of time.
- By pricing your property at market value, you expose it to a much greater percentage of prospective buyers.
- If your home is listed at a price that is above market value, you will miss out on prospective buyers who could be prime candidates to purchase your home.
- If you list at a price that is below market value, you will ultimately sell for a price that is not the optimum value for your home.
- Timing is a critical factor to remember when pricing your home. A property attracts the most attention, excitement, and interest from the real estate community and potential buyers when it is first listed on the market.
- Improper pricing at the initial listing misses out on this peak interest period and may result in your property languishing on the market. This may lead to a below market value sale price or no sale at all.
- The highest proceeds are achieved when a house is priced right to begin with, therefore spending less time on the market.
When you receive a purchase offer from a would-be buyer, remember that unless you accept it exactly as it stands, unconditionally, the buyer is free to walk away. Any change you make in a counteroffer puts you at risk of losing that chance to sell.
Local custom usually determines who pays for the costs of the transaction. However, the following items are negotiable:
- Termite inspection
- Survey
- Buyer's closing costs
- Points paid to the buyer's lender
- Buyer's broker fees
- Repairs required by the lender
- Home protection policy
You may feel some of these costs are none of your business, but many buyers - particularly first-timer buyers - are short of cash. Helping them may be the best way to get your home sold.
Calculating Your Net Proceeds
When an offer comes in, you can accept it exactly as it stands, refuse it, or make a counteroffer to the buyers with the changes you want. In evaluating a purchase offer, you should estimate the amount of cash you will walk away with when the transaction is complete. For example, when you're presented with two offers at the same time, you may discover you're better off accepting the one with the lower sale price if the other asks you to pay points to the buyer's lending institution.
Once you have a specific proposal before you, calculating net proceeds becomes simple. From the proposed purchase price you can subtract the following costs:
- Payoff amount on present mortgage
- Any other liens (equity loan, judgments)
- Broker's commission
- Legal costs of selling (attorney, escrow agent)
- Transfer taxes
- Unpaid property taxes and water and other utility bills
- If required by the contract: cost of survey, termite inspection, buyer's closing costs, repairs, etc.
Your present mortgage lender may maintain an escrow account into which you deposit money to be used for property tax bills and homeowner's insurance. In that case, remember that you will receive a refund of money left in that account, which will add to your proceeds.
