If you are planning to place your home on the market, one of the most important factors in making a quick sale is correctly pricing the property. What you think your home is worth and what your real estate professional considers it to be worth may be two very different numbers.
Depend on your agent to be your guide.
Let your agent help you to understand how to price your home without letting sentiment get in the way. Pricing your home too high for its value or your neighborhood can mean it might end up sitting on the market; pricing it too low means that you’re losing potential revenue and leaving money on the table. By pricing your home “just right,” you will not only ensure that it will appraise for approximately the same value (increasing the likelihood that your buyer will secure financing), but you will likely see an offer or two – if you’re lucky, multiple offers.
The best way to determine how you should price your home is by looking at recent comparable sales in your neighborhood or surrounding area. Your real estate agent should be able to pull this information for you, but you can get an idea of recent sales from various Internet sites as well as public records.
Once you have an understanding of the “comps” in your area, your agent can help you decide how your home stacks up. Using his/her expertise can be helpful if you don’t have a lot of specifics about how your home compares against others in terms of features and upgrades, additions, or renovations.
Your agent will be able to tell you about market conditions and may point out any special features or deficits that might affect your listing price. Your agent will also be more objective about whether the unique aspects of your home that you may love (for example, a swimming pool) will hold the same appeal for buyers when you try to sell.
With the Tampa Bay housing inventory levels low, chances of selling your home quickly are good, but this still depends greatly on pricing. With a little research and the expert advice of your agent, you’ll be able to price your home just right to make that sale.
Benefits of Knowing Your Home’s Value
In addition to knowing your home’s value if you are selling, there are other benefits you should consider regardless of selling or staying put. (https://www.homes.com)
Depending on the loan program, lenders would allow you to borrow a maximum of 75% to 96.5% against your property. While you need to qualify on other credit parameters, equity in the house is one of the more important underwriting criteria. Up to a certain point, the more equity you have the better loan terms you would qualify for. Knowing your home value tells you how big a mortgage you can take – whether its refinancing to get a better rate, lower payment or taking a cash-out to satisfy other needs.
Making Home Improvements.
Home improvements are primarily made for two reasons: (1). Making the house more comfortable to live in or (2). Preparing the house for sale to get a better selling price. If your home is already priced at the higher end in a neighborhood, making home improvements may not yield a suitable return on investment. Understanding your home value and that of the neighborhood you live in should be the first step before you decide on making expensive home improvements.
Getting a Line of Credit.
Sometimes refinancing your mortgage to get a cash-out may not be the ideal move if you have an interest rate lower than the market. In that case, if you want to borrow cash against your house, getting a Home Equity Line of Credit (HELOC) as a 2nd mortgage is a much better idea. But, just like a refinance loan, HELOCs also require that you have a certain equity level in your house, typically a minimum of 20%-25%. Once again, knowing your home value will guide you if getting a HELOC is something you could qualify for.
BOTTOM LINE: You may not have any immediate plans to move or do any of the above, but it’s prudent to keep yourself abreast of your home’s value. As the saying goes… life happens and plans can change. So being in the know about your home’s value will keep you ahead of the game regardless of the situation.
Home Rich: Increasing the Value of the Biggest Investment of Your Life, by Gerri Willis
My First Home: A step-by-step guide to achieving the ultimate American Dream, by Shashank Shekhar and Richa Sarin