Whether preparing to sell or simply keeping up with the value of your largest asset, everyone wants to know what their house is worth from time to time. Most everyone has found their way to Zillow and knows the latest Zestimate of their home. Unfortunately, those automated values aren’t accurate for the vast majority of the properties out there. If you are just keeping up with trends, then their trendline is fantastic, but if you want, or need, a reliable value you will want to pursue other avenues.
After Zillow, one of the most common means of valuing property is using what their neighbor represents as their experience. Neighbors are quick to tell you how many showings they had, their price and their offers. The problem is that they often puff things, exaggerate a bit. Not that they mean any harm, but there is a little competitive ego that comes into play at times. When they get an accepted offer and you ask them about it, they will usually say, “We got our price!” Of course, you don’t know if that means they got their asking price or the price they were willing to accept that was $20,000 under their list price.
Everyone wants to sell for the highest price that they can, but the market will only bear so much. Homes are often listed a touch high to test the market or to leave a little “wiggle room” to negotiate with. The reality is that there is a lot of information available to buyers and sellers online. The days of agents having a monopoly on sales information are gone. It is available to the public and most buyers and sellers do their research. You can’t bamboozle the other party any more without them having a specific reason to pay high or low.
It is important to price your home right in order to obtain a buyer and for the buyer to be able to perform. Regardless of what a buyer might be willing to pay, if they are getting a loan, they will be limited in their loan amount to a percentage of the purchase price or appraised value, whichever is less. If your appraised value comes in lower than the purchase price and they don’t have the cash to offset the shortage then you will have to cancel the transaction. Better to be on track to begin with, priced right.
Agents can prepare a comparative market analysis (CMA) for you at no charge. It is a mini-appraisal that reflects what the agent thinks he can sell the property for. The agent finds comparable properties to yours that are for sale, pending, sold in the past six months, or expired, and compares yours to those properties. Adjustments can be made for condition, extra amenities, upgrades, etc. Agents can get quite close to the true market value if they are diligent in their work. You can work with your agent in evaluating the comps as you might have better local knowledge about each of them and their owner’s circumstances that could have affected the transaction.
Price is important, but it can fluctuate in accordance with the other terms. If you accept an offer conditioned on the sale of a home, you can often get a higher price. If you offer cash with a 10-day close, you can often get a lower price. Sometimes price isn’t as important as simply being able to be the one to buy the home. Your agent can help you gain perspective on your wants and needs, the tools you have to work with and how you can make it all work for you to get what you want out of the sale or purchase of a home.
Our advice: Be realistic in your value if you truly want to sell or buy. It doesn’t hurt anything to negotiate, but if a property is priced right, you might find yourself shadowboxing while somebody else buys the home you want. Achieving a fair price for the market you are in is a job well done. Better yet, you can move forward having met your goals and objectives for the transaction and have this important part of your life settled.
Don’t get too focused on the price. Price is important, but there are many components to an offer. Make sure the transaction serves you well and you will have a successful transaction to be happy with.
When it comes to choosing professionals to assist you with your real estate needs… experience is priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. dpwtigers@hotmail.com
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