What’s Your Home Really Worth?

If you’re thinking of selling your home, you may be fantasizing about the profit you’ll reap from the sale or maybe you’re wondering if you’ll net just enough to trade-up to that larger house you’ve had your eye on.

When trying to determine how much your home is worth and ultimately how much it will sell for, don’t get tripped up by the many ways sellers often mistakenly use to try to gauge the value of their home. While most of the methods below will yield a value of some kind, the true value of your home is only what a prospective buyer will pay for it.

• Property tax assessment. Each jurisdiction uses a formula to establish home values for a tax assessment, but this price rarely correlates with the market value of your home. Your tax assessment can be higher or lower than the current market value.
• Homeowners insurance value. Insurance estimates are based on the cost of replacing your home without the land, so this value is skewed compared to market value.
• Mortgage balance. Your mortgage balance simply reflects your home loan. The difference between your loan payoff and the market value of your home is your equity.
• Neighbor’s home value. Even if your neighbor’s home is similar to yours, it’s not likely to be identical. A REALTOR® can help you evaluate your home’s worth in the context of other nearby properties.
• What you originally paid for your home. Regardless of how long ago you purchased your property, the value today may be less or more that what you originally purchased it for.
• Your desired value. You can always try to put your home on the market for your desired price, but if you’ve over- or under-priced it, you’re shortchanging yourself. If you sell it too low, you could miss out on potential income and if you priced it too high your house could sit on the market and eventually sell for less than if you priced it correctly in the beginning.

So what is the best way to determine the most realistic value of your home?

Ultimately, the best and most reliable means of determing the value of your home is through the use of your local REALTOR®. Ideally, one who knows not just the market conditions of the city in which your home is located, but who is also extremely familiar with the local neighborhood as well. Since there can be variations in market conditions simply between neighboring communities, having a REALTOR® with a keen eye on what is going on with the community around you can be a great asset to you during the sale of your home. Using our knowledge and experience of local market conditions right here in Henderson along with performing a comparative market analysiswith recent market data, our agents here at Hendersonrealestatepros.com can help you determine a more realistic estimate of your home’s value.

A CMA ( Comparative Market Analysis ) is both an art and a science. While it’s based on data, it also requires local market knowledge and intuition about which homes to compare and how to interpret the prices. We will look for recent sales of homes that are similar to yours, preferably within the past two or three months, up to about six months. In addition, we can look at other homes currently on the market and homes that didn’t sell that were taken off the market to compare values.

The comparison of your home with others should include not only the size and the number of bedrooms and baths, but also the condition of your home, the neighborhood and the proximity to amenities. If you do not understand the comparisons a REALTOR® is making, ask to see some of the homes currently on the market or look online at photos of the properties.

While it may be tempting to list your home with the REALTOR® who tells you it can sell at the highest price, a smarter way to sell your home is to price it as accurately as possible from the beginning. Studies show that an overpriced home that lingers on the market will end up selling for less than the estimated correct price. Also, when you sell your home, an appraisal will be required by the buyers’ lender, so keep in mind that your home has to appraise for the selling price or, depending on how your contract is written, you’ll have to renegotiate the sales price or the buyers will need to come up with extra cash.