Often people ask me, “What’s my home worth?” But it’s almost impossible for me to say exactly what someones home would bring, especially without thinking about it for a while. I am comfortable however providing a probable range of values that their home would sell for. I do this partly by researching the prices of homes that sold recently that are very similar and located in the same neighborhood ideally, or as close by as possible in another similar area. Real estate is just like people in that you are judged by the company you keep. Averaging prices of similar homes that have sold recently nearby gives a foundation of value. This is what appraisers use when determining value for a lender’s appraisal.
But if you really want to determine pricing when putting a home on the market, you also have to figure in current market conditions and how prices have been trending…up or down. And you also have to look at other homes on the market now which would be your competition, and how they are priced. Buyers will be directly comparing your home to them. A house must be priced competitively if you want to sell it. All three of those methods weigh into the process.
But also, there is a gut feeling that I have for what a home is worth after years of looking at homes on the market and showing homes recently. I add that into the mix too…and I come up with a probable range of values. So, to me it’s not really an exact science at all…it’s an intuitive process. You want to price it to realize as much as possible from the sale, but you don’t want to price it so high that it won’t sell. Finally, you make a educated guess as to pricing…and you leave it up to the market to decide. In the end a home is worth what a buyer is willing to offer and a seller is willing to accept.
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