How to Price Your Home for Sale

Sellers

It’s natural for sellers to want to get every step of the selling process right, but a successful home sale depends on an accurate listing price. Your real estate agent will work closely with you to set the price, but in the meantime, you can use the following information to better understand what goes into this process.

 

What factors influence home prices?

 Understanding what factors influence home prices will give you a deeper knowledge of the market, give clarity to the selling process, and help you work toward the accurate listing price of your home.

Comparable home sales

Comparable home sales—or “comps”—have a major impact on the price of your home. Comps refer to the comparable homes in your area, both pending and sold, within the last six months. Your Windermere agent can provide you with a Comparative Market Analysis (CMA) to better determine the price of your home. CMAs factor in aspects, such as square footage, age, and lot size compared to other homes in your area, to determine how your home should be priced among the competition.

Your home’s location

Naturally, you home’s location plays a significant role in its asking price. Depending on the market conditions in your area, whether you reside in a metropolitan, suburban, or rural location, and the home’s proximity to amenities, schools, and entertainment all contribute to the price.

The home’s condition

If you have recently invested in upgrades or other maintenance projects for your home, they could increase your asking price. However, the price increase potential depends on the kind of renovation, its ROI, and how valuable it is to buyers in your area. If the home is in need of repair, it will likely fetch less interest than better maintained homes at your price point. Any outstanding repairs or projects looming overhead will make the home less attractive to buyers and could lead to a low appraisal.

Seasonality

Any factors that impact market supply and demand are worth taking into consideration when preparing to price your home, and seasonality is one that cannot be overlooked. Typically, market activity slows in the winter and picks up during the spring and summer months. However, market seasonality varies region to region. Talk to your Windermere agent about the seasonality trends in your area and how they factor into your asking price. 

 Market conditions

Naturally, all sellers want to price their home competitively, but what a competitive price looks like depends on the market conditions, such as whether it’s a buyer’s or seller’s market. Some sellers think that pricing their home over market value means they’ll sell for more money, but the opposite is often true. Overpricing your home presents various dangers, such as sitting on the market too long, which can result in selling for well below what it’s worth.

 

What’s your home worth?

 Nothing can replace the professional knowledge and local expertise of a real estate agent, but automated valuation models (AVMs) can be a helpful first step in determining what your home is worth. Like comps, AVMs assess your home by comparing its information with the listings in your area.

If you’re curious about your home’s value, Windermere offers a tool that provides a series of evaluations on your property and the surrounding market. You can find it here.

These are the basic tenets for understanding what goes into the price of a home. When you’re ready, we’re happy to connect you with an agent who can interpret and expand on this information, perform a CMA for your home, and be the expert in your selling journey.

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Questions to Ask During Your Virtual Home Tour

Thanks to COVID-19, the new reality is that many open houses and home tours are being conducted virtually. For prospective home buyers, this new territory brings an added element to prepare for in the home buying process. Some of the questions that should be asked in a virtual home tour parallel those of in-person tours, but others are unique to today’s virtual world.

 

Could you zoom in?

  • Sometimes it can be difficult to get a true glimpse at what you want to see in a room. Asking the agent to zoom in on specific features is commonplace in virtual home tours, and they understand this is part of the viewer experience. Don’t hesitate to ask multiple times. Getting a better look at everything you want to see will help you feel like you’ve gotten the most out of your virtual tour.

 

How many square feet are in this room?

  • Virtual tours can slightly distort space, making it tough to gauge the size. The room-to-room square footage is information the agent is sure to have handy. Since you can’t be there in person, it will help you piece together the virtual visuals with the sense of physical space that we’re all accustomed to feeling in the places we live.

 

What color is that?

  • In the smartphone era, and computer era at large, we have come to understand that digital representations of color are not always true to the eye. Ask the agent to confirm specific colors so you can plan accordingly. Have a color swatch on hand or look the colors up online as you go through the tour.

 

When were the appliances last updated?

  • The importance of this question rings true in past, present, and future. Knowing the state of the home’s appliances, and the likelihood and timing of when they will need replacement, is vital information for both assessing the move-in readiness of the home and understanding what costs might lie ahead.

 

Has the seller provided an inspection?

  • This is another example of a critical question, whether your home tour is virtual or physical. If the seller has already done an inspection, ask the agent to lead you to any areas of concern based on the inspector’s findings. If there is anything that has not yet been addressed by the seller, have your agent ask what their plan is for making the necessary repairs/updates.

 

When is the offer review date?

  • Understanding the seller’s timeline for reviewing and accepting offers will help guide your decision-making process and allow you to strategize based on the timeline.

 

Whether your home tour is physical or virtual, getting the information you need to make an informed decision remains paramount. Although there is no substitute for physically being in the home you are looking to buy, keeping these questions in mind will position you well as you progress through the home buying journey.

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Your Beginner’s Guide to Home Appraisals

 

Appraisals are used as a reliable, independent valuation of a tract of land and the structure on it, whether it’s a house or a skyscraper. Designed to protect buyers, sellers, and lending institutions, appraisals are an important part of the buying/selling process.

Below, you will find information about the appraisal process, what goes into them, their benefits and some tips on how to help make an appraisal go smoothly and efficiently.

 

Appraisal value vs. market value

The appraiser’s value is determined by using a combination of factors such as comparative market analyses and their inspection of the property to determine if the listing price is typical for the area.

Market value, on the other hand, is what a buyer is willing to pay for a home or what homes of comparable value are selling for.

If you are in the process of setting the price of your home, you can gain some peace-of-mind by consulting an independent appraiser. Show them comparative values for your neighborhood, relevant documents, and give them a tour of your home, just as you would show it to a prospective buyer.

 

What information goes into an appraisal?

Professional appraisers consult a range of information sources, including multiple listing services, county tax assessor records, county courthouse records, and appraisal data records, in addition to talking to local real estate professionals.

They also conduct an inspection. Typically, an appraiser’s inspection focuses on:

  • The condition of the property and home, inside and out.
  • The home’s layout and features.
  • Home updates.
  • Overall quality of construction.
  • Estimate of the home’s square footage (the gross living area “GLA”; garages and unfinished basements are estimated separately).
  • Permanent fixtures (for example, in-ground pools, as opposed to above-ground pools).

After the inspection, the appraiser of a typical single-family home will create their report including their professional opinion on what the price of the home should be.

You might hear the lender ask for two reports, the “Sales Comparison Approach” and the “Cost Approach.” These two approaches use different methodologies to find the appropriate value of the home, and help the lender confirm the home’s price.

 

Who pays and how long does it take?

The buyer usually pays for the appraisal unless they have negotiated otherwise. Depending on the lender, the appraisal may be paid in advance or incorporated into the application fee; some are due on delivery and some are billed at closing. Typical costs range from $275-$600, but this can vary from region to region.

An inspection usually takes anywhere from 15 minutes to several hours, depending on the size and complexity of your property. In addition, the appraiser spends time pulling up county records for the values of the houses around you. A full report is sent to your loan officer, real estate agent, and/or lender in about a week.

If you are the seller, you won’t get a copy of an appraisal ordered by a buyer. Under the Equal Credit Opportunity Act, however, the buyer has the right to get a copy of the appraisal if they request it. Typically, the requested appraisal is provided at closing.

 

What if the appraisal is too low?

A low appraisal can present a problem when there’s a large difference between what you’ve agreed to pay and the appraisal price.

Usually, the seller’s agents and the buyer’s agent will respond by looking for recent sold and pending listings of comparable homes. Sometimes this can influence the appraisal. If the final appraisal is well below what you have agreed to pay, you can re-negotiate the contract or cancel it.

 

Where do you find a qualified appraiser?

Your bank or lending institution will find and hire an appraiser; Federal regulatory guidelines do not allow borrowers to order and provide an appraisal to a bank for lending purposes. If you want an appraisal for your own personal reasons and not to secure a mortgage or buy a homeowner’s insurance policy, you can do the hiring yourself. You can contact your lending institution and they can recommend qualified appraisers and you can choose one yourself or you can call your local Windermere Real Estate agent and they can make a recommendation for you. Once you have the name of some appraisers you can verify their status on the Federal Appraisal Subcommittee website.

 

Tips for hassle-free appraisals:

To ensure the appraisal process is smooth and efficient, provide your appraiser with the information and documents he or she needs to get the job done. The documents you will need include:

  • A brief explanation of why you’re getting an appraisal
  • The date you’d like your appraisal to be completed
  • A copy of your deed, survey, purchase agreement, or other papers that pertain to the property
  • A sketch of the property with the property’s dimensions. These are usually available online from the county assessors.
  • If you have a mortgage, provide the information about your lender, the year you got your mortgage, the amount, the type of mortgage (FHA, VA, etc.), your interest rate, and any additional financing you have.
  • A copy of your current real estate tax bill, statement of special assessments, balance owing and on what (for example, sewer, water)
  • Tell your appraiser if your property is listed for sale and if so, your asking price and listing agency.
  • If it’s a multiple offer situation, provide the appraiser with the other offers to prove the demand for the home.
  • Any personal property that is included in the sale, like appliances and other fixtures.
  • If you’re selling an income-producing property, a breakdown of income and expenses for the last year or two and a copy of leases.
  • A copy of the original house plans and specifications.
  • A list of recent improvements and their costs.
  • Any other information you feel may be relevant.

By doing your homework, compiling the information your appraiser needs, and providing it at the beginning of the process, you can minimize unnecessary delays.

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