Answering the Question "How Much is My Home Worth?"
My business partner and I buy and sell dozens of homes every year, in addition to helping other Ohio Realtors grow their business. One issue that arises time and again is the struggle over house value. Many factors come into play when determining a fair market value for a property, including the seller's emotional investment, the properties available in the area to conduct a comparative market analysis or "CMA", sometimes called a highest price analysis and the appraiser's knowledge of the area.
I'd like to start by addressing some common misconceptions, and then provide some good news and tips during the preparation stage to net more from the sale of your home.
House Value: Amenities and Features (Value vs. Desirability)
Two homes, both have the same size yard, same number of bedrooms, bathrooms, two garage spaces each and adjoining first floor master baths, have the same square footage, both homes are within a couple blocks of one another and both homes are going to include all the appliances. In this regard the homes are identical. Now, let's say Seller A revamps the kitchen with recessed lighting, granite counter tops, and cherry hardwood cabinets, while Seller B doesn't update the kitchen and has run of the mill generic everything and pine cabinets. Believe it or not, Seller A's home is not worth more than Seller B's.
Seller A's home, however, has increased desirability, and that does carry a lot more weight on the market place, and the home is more likely to get better offers, but doesn't increase the fair market value. There's always a low, medium and high price range for every listing, and Seller B is more likely to get offers in the low to medium, while due to greater desirability, Seller A's home is likely to command offers in the medium to higher price range.
Low, Medium and Highest Price Range? Understanding the Time Frame to Sell
Ever hear the term "days on market"? When my business partner and I list a home, the very first thing we like understand is the seller's time frame in which they need to sell as that greatly impacts where to start with pricing. After conducting a highest price analysis or CMA, we provide a report based on all the comparable homes in the area with the following criteria:♦ All homes currently for sale, and determine the average asking price.
♦ All homes that have expired (overpriced and didn't sell).
♦ All homes that have sold.
Keep in mind, these homes are comparable, and the above criteria paints a clear picture of what is overpriced, what was lowest, and sold and then a Realtor can clearly demonstrate a low, medium and highest price range. So, where to start with pricing? That's relatively simple. If a seller is in a hurry, perhaps needing to relocate for work or other more urgent circumstance, you would start with low to just under medium range, If needing to sell, but perhaps not as urgent the medium range is suggested and if the seller needs to realize every penny they can, go with the highest price range.
Low range is suggested if you need to sell in four to five months or less, medium for about 5-7 months, and highest if you can sit on the property for a good long while, upwards of a year. Don't forget "desirability" factors do create more attraction, and good Realtors know how to highlight keen features to attract and bring in interested buyers.
Selling a Home; Simple Inexpensive Preparations
There are many simple inexpensive things you can do to make your property more attractive and draw attention from buyers. Though these easy fixes may not increase the house value on the market, they may draw better offers.
- Clean it up: No one wants to see a dirty or filthy home. Foul odors, dirty walls and bathrooms don't make their mark with buyers and less than memorable.
- Unclutter: Get rid of unnecessary items from the house. Stacked boxes, junk, clutter, again, you want buyers to envision themselves in the home and visualizing their belongings in each room.
- Painting is inexpensive when you do it yourself, use neutral colors for the most appeal.
- Don't leave the place completely bare. Place a few colorful objects here and there, a plant or lamp with a warm color shade. A little bit goes a long way to helping prospective buyers feel like it's a possible home.
If you're buying or selling a home in southwest Ohio; Cincinnati, West Chester, Beavercreek, Mason, Monroe, Indian Hill or any of the other great nearby communities, my business partner Marty Snyder and I are glad to assist and happy to provide a free evaluations of your home's value.