The countdown is on. You have made it through the processes involved in phase one. You have taken time to set up a realistic budget, analyzed the cost of selling verse equity and have obtained all the key documentation needed for the sale; now what? After you have done all cosmetic and functional repairs and downplayed the issues that you can’t fix it is time to move on to the next step.
With one month to go before you officially list your house on the market you will find yourself busy in research. With your realtor, the month’s goal will be to obtain a reasonable asking price for your home. There is a lot that needs to be taken into consideration when determining exactly what you need to ask for your home. The first is the local housing market. You must establish the pricing at which similar homes in the area have actually been selling for.
This is where the process becomes a bit tricky. It seems simple, take what you bought your home for add the cost of the improvements you have made and calculate the appreciation value found in similar homes for sale in the area and wham there you have it; the magic number, the asking price. Here is the problem, plain and simple market conditions are often uneven.
In recent years we have seen an amazing amount of change in the housing market. With homes selling for a significant amount less than what they are valued at due to the increasing in foreclosures and short sales. This can drive the market down in your area a solid thirty percent. With this in mind you will want to assess the fair market value for your home. There are several things to take into consideration when determining the fair market value over an asking price.
The first thing you need to do is look at the actual sale price of properties sold in the area. This can be done through local property records that are open to the public. This will be an accurate account for the amount of money that is passing from one party to the next in the sale of comparable homes in the area.
The next step is to get the top of the line estimates of home values of homes that have sold in the area. You can do this by looking on sites such as Zilllow or Trulia. These sites will give the outer most prices at which the houses in the area would go for. This is the top of the line price for homes in your area.
From here it is important to get an actual appraisal for the home. An appraiser will take into consideration things like a new water heater, new roofing and upgrades that have been done within the home. This is nice to do as well because they can also point you into the direction of small upgrades that really pack a lot into the actual price you will be asking for your house. An actual appraisal will also help you in negotiations as you will have proof and validation for the buyer on why the home is being placed at that price point.
All of this research can be put into perspective an asking price on your home. You will have a better understanding of offers that are coming in and be able to counter offer with physical hard evidence. This puts you in a great position as a seller.