Pricing your home is probably the most gut wrenching part of the whole selling process. You want to sell for as much money as possible but if you list your home too high, the phone doesn’t ring. So how do I price my home?
First we will tell you how not to price your home. Your homes value is not what you paid for it. It is not the cost of all the upgrades and amenities. It is not memories and sentimental values. It is most likely not what the appraisal district says it is.
Your home value is based off of current market conditions; economy, employment and recent market sales. The two most common ways to price your home are hiring a licensed appraiser and a Brokers comparative market analysis (CMA).
The licensed appraiser is going to be the most detailed and comprehensive. The appraiser will make a personal visit to your home and take photos along with a sketch of the home. An added benefit to an appraiser is that you will now have an accurate measurement of the size of your home. The appraisal district and or builder’s plans are often inaccurate. Once back at the office, the appraiser will scour the MLS and other records to find the closest comparables. Typically they will look for homes within 250 sf +/-, built within 5 years, similar size lot and amenities. This will vary based on the size the home. The appraiser then makes +/- adjustments for any variables. For example the subject property may be on a Cul De Sac and warrant a +$10,000 adjustment. The appraiser then uses these adjustments to come up with an estimate of market value. The appraiser may also provide a construction/replacement cost value. Although the market value is primarily what lenders use. A typical appraisal may cost between $450 – $600.
The Broker comparable market analysis uses similar techniques that the appraiser uses. The Broker may or may not make a site visit. The CMA works very well in master planned communities or subdivisions with similar properties. If you are in an area with custom homes or few comparables, the CMA may be more of a challenge. One great benefit of a CMA is that MyCastleRealty.com provides this service free of charge.
Our recommendation is to try the CMA first. If your property goes beyond our scope we can always refer you to an appraiser.
Once you have a good estimate of value, the next step is to set the price and create a pricing strategy. But that’s another blog…